Choose Your Path after High School

(2 of 5)

Choose Your Path after High School

As a high school senior, you are at a very exciting time in your life. Most of you are about to make a significant transition in your life. This transition will likely involve becoming more independent in how you live, the choices you make, what path you choose to follow after high school, and how you manage your financial life.

What are your choices?

One of the first choices to make, if you haven’t already made it, is to determine what path you will pursue after high school. Most choices fall into the following categories:

• College education (two or four-year program)
• Go directly into the workforce (be sure to work for a business where you have an opportunity to develop your skills and grow your employment options)
• Get an apprenticeship in the skilled trades to become a carpenter, mason, electrician, plumber, or similar profession. Some programs may require some post-secondary education to apply.
• The military

Regardless of the path you choose, it is important to understand what your income potential is over your lifetime. If you choose college as your path, it is also important to understand the expenses you will encounter. College can be a terrific investment in your future as long as you create and follow a plan focused on how you will pay for college. Review the table below to see the income potential and educational expenses based on some of the more common paths students choose after graduating from high school.

What should you consider?

Key areas to research when selecting a college are as follows:

• Total cost estimate of room, board, tuition and books, and fees
• Free financial aid you will receive in the form of grants and/or scholarships. Be sure to complete the Free Application for Federal Student Aid (FAFSA). This is required by schools and the federal government to determine aid you are eligible for. The Website is https://studentaid.gov/.
• Income you plan to earn by working while you go to school to help cover expenses
• Money you or someone else has already saved for your college experience

Once you have this information available, you can determine what you are still responsible for paying on an annual basis while you attend college. Let’s take a look at an example:

Most people turn to student loans and borrow money to finance the shortfall. This is certainly an option for you to consider, and your goal should be to borrow as little as possible. Student loan money should only be used on important needs like school-related expenses, necessary personal expenses, and transportation. They should not be used to purchase wants like a flat-screen TV or gaming consoles for your dorm or to go shopping or dine out frequently.

Once you are out of college you will be required to begin paying down your student loans on a monthly basis, generally over a ten-year period. If you have minimized the amount of debt you have taken out to pay for college, you will end up with a manageable monthly loan payment. If you have large loan balances, you may find yourself in a situation where your monthly payment is very high and eats up a good portion of your monthly income.

Financial skills will always matter

Regardless of what path you choose, it will be important to have good financial skills and behaviors in place. Part of living independently requires building a budget incorporating your income, expenses, and savings. Be sure to have a written plan for what sources of income will be used to cover your monthly expenses. Refer to the budgeting course for a comprehensive discussion about this process and to access useful budgeting tools.