Crash course · Track one · Ages 13–19

Financial literacy, for teens.

Eight modules on the money decisions that start showing up the moment you get a first paycheck, and the arithmetic underneath each one. Every module ends with a number you can run yourself.

8 modules ≈ 90 minutes 2 calculators Free · no sign-up

Start module 1 Seniors track →

Module 01

Where the money actually goes

You agreed to $16 an hour. You worked 20 hours. The deposit says $268.40. This module is about the missing $51.60, because nobody explains it, and it is completely predictable.

Gross pay vs. net pay

Gross pay is what you earned. Net pay ("take-home") is what survives the deductions. The gap is not your employer keeping money. It is taxes and, at some jobs, benefits.

FICA: Two federal payroll taxes taken out of nearly every paycheck: Social Security at 6.2% and Medicare at 1.45%, or 7.65% combined. Your employer pays a matching 7.65% you never see. There's no way to opt out, and yes, it applies to teenagers.
Withholding: An estimate of your income tax, taken out in advance. You tell your employer how much to hold back on Form W-4 when you're hired. Withhold too much and you get a refund; too little and you owe in April.
W-2 vs. 1099: A W-2 means you're an employee and taxes come out automatically. A 1099 means you're treated as self-employed: nothing is withheld, and you owe the employer's half of FICA too, a total of 15.3%. Tutoring, delivery apps, and most "contractor" gigs are 1099.

Do the math: one shift, line by line

20 hours at $16.00/hour, a typical first job:

Gross pay (20 × $16.00)	$320.00
Social Security (6.2%)	−$19.84
Medicare (1.45%)	−$4.64
Federal income tax withheld (example)	−$19.20
State income tax (varies; NJ example)	−$7.92
Net pay (what lands in the account)	$268.40

The rule of thumb: for a first job, assume you keep roughly 80–85% of gross. Before you say yes to a shift, do the mental version: hours × rate × 0.8 is close to what you'll take home.

Read the stub, every time

Your pay stub, paper or in an app, lists each deduction and a year-to-date column. Check three things: the hours match what you worked, the rate matches what you agreed to, and no deduction appeared that you didn't sign up for. Payroll errors are common and almost always get fixed when you point them out within a pay period or two.

If you only remember one thing

An hourly rate is a headline, not a paycheck. Multiply by 0.8 before you spend it.

Module 02

Banking without paying for it

A bank account should cost you nothing. Many people pay $100+ a year for one anyway, entirely in fees that were avoidable.

The two accounts you need

Checking: money that moves. Debit card, direct deposit, bills. Pays essentially no interest, and that's fine; it's a wallet, not a vault.
Savings: money that sits. Pays interest. Keeping it in a separate account is a psychological trick that works: money you have to transfer is money you don't spend.

If you're under 18, both usually have to be joint accounts with a parent or guardian. At 18 you can open your own; many banks convert the account automatically.

The fee list: memorize it, then avoid it

Overdraft fee: Charged when you spend money you don't have and the bank covers it anyway, often around $35 per transaction. Three small purchases on an empty account can cost over $100. Fix: decline overdraft coverage on debit cards. The purchase gets declined instead. A declined card is embarrassing for nine seconds; the fee lasts longer.
Monthly maintenance fee: A charge for simply having the account, often waived for students, for direct deposit, or for a minimum balance. Fix: ask which waiver you qualify for, or move to a bank or credit union that doesn't charge one.
Out-of-network ATM fee: Charged twice: once by the ATM's owner, once by your own bank. Roughly $3–$6 to touch your own money. Fix: use your bank's ATMs, or get cash back at a store register.

Do the math: the cost of not reading

One overdraft a month, one out-of-network ATM trip a week, one $12 maintenance fee:

($35 × 12) + ($5 × 52) + ($12 × 12) = $420 + $260 + $144 = $824 a year

That's 51 hours of work at $16/hour, gross, or about 64 hours once you account for taxes. Paid to a bank, for nothing.

Debit vs. credit, in one line

A debit card spends money you have. A credit card borrows money you'll owe. They look identical and feel identical, which is exactly the problem; see Module 05.

Set this up today

Turn on low-balance alerts (set the threshold at $50, not $0)
Opt out of debit card overdraft coverage
Ask your bank which monthly fee waiver you qualify for
Turn on two-factor authentication for the banking app

Module 03

A budget you'll actually keep

Most budgets fail because they're built as punishment. A budget is really just a sentence: here is where this money is going before it disappears.

Start with 50 / 30 / 20, then adapt it

Split every dollar of take-home pay three ways:

50% needs: things that cause a real problem if unpaid. As a teen living at home, this bucket may be nearly empty. Good. That's a temporary advantage, and it is the cheapest saving opportunity you will ever have.
30% wants: food out, subscriptions, clothes, games, concerts. Not a moral failing. Just a bucket with a bottom.
20% future: savings and investing. This is the only bucket that pays you back.

Living at home with no rent? Flip it: something like 10% needs, 20% wants, 70% future while it's free to do so. A year of that at a part-time job is a running start most adults never got.

Do the math: $268 a paycheck, twice a month

Bucket	Standard 50/30/20	Living at home
Needs (phone, gas, school)	$268	$54
Wants	$161	$107
Future (save / invest)	$107	$375
Monthly take-home	$536	$536

Pay yourself first

Don't save what's left at the end of the month; there is never anything left at the end of the month. Set an automatic transfer to savings for the day after each paycheck lands. You will adapt your spending to the smaller number within two weeks and never think about it again. This single mechanic outperforms willpower by an enormous margin.

The emergency fund, teen edition

Adults are told to hold three to six months of expenses. For you the first target is simpler: $500 that you do not touch. That number covers a phone screen, a car repair, or a flight home: the exact events that otherwise become a first credit card balance you carry for years.

If you only remember one thing

Automate the saving, then budget whatever's left. Order of operations matters more than discipline.

Module 04

Compound interest: the whole reason to start now

This is the most valuable arithmetic in the course, and the only one where being young is worth more than being rich.

The idea

Simple interest pays you on what you put in. Compound interest pays you on what you put in plus every dollar of interest you've already earned. The growth curve isn't a line; it bends upward, and the bend is where all the money is.

Future value = P × (1 + r/n)^n·t

P = starting amount · r = annual rate as a decimal · n = times compounded per year · t = years

The Rule of 72: Divide 72 by the annual return to get the years it takes money to double. At 8%, money doubles in 72 ÷ 8 = 9 years. At 3% it takes 24 years. At 24% (a typical credit card rate) your debt doubles in 3. The rule runs in both directions.
APY vs. APR: APY includes compounding, APR doesn't. When you're earning, compare APY. When you're borrowing, the APR understates what you'll actually pay if you carry a balance.

Calculator

What starting early is worth

Change any number. The comparison underneath shows what the same plan costs you if you wait five years to begin.

Starting amount

Added each month

Annual return %

Years invested

Ending balance –

You put in–

Growth did the rest–

Growth as a share

Do the math: the five-year tax

$100 a month at 7%, starting at 18 vs. starting at 23. The later start contributes $6,000 less but ends up with far less than $6,000 more missing, because the money that never got invested is also the money that had the longest to grow.

Starts at	Contributed by 65	Balance at 65
Age 18 (47 years)	$56,400	≈ $438,600
Age 23 (42 years)	$50,400	≈ $304,400
Cost of waiting five years	$6,000 less in	≈ $134,300 less out

Figures assume a steady 7% annual return, compounded monthly. Real markets are not steady; the point is the shape of the gap, not the exact dollar.

If you only remember one thing

Time is the input you can't buy back. Starting small at 16 beats starting serious at 30.

Module 05

Credit cards and credit scores

A credit card is both useful and dangerous, and the difference between those two outcomes is one habit.

How a card actually works

You spend during a billing cycle (about a month).
The cycle closes and you get a statement balance.
You have a grace period (usually around three weeks) until the due date.
Pay the statement balance in full by the due date and you pay zero interest. Carry any of it and interest starts, often on new purchases too.

Used this way the card is a free 3-week loan that builds your credit history. Used the other way it's a 20–30% APR loan that follows you.

The minimum payment trap

The "minimum payment due" is the smallest amount that keeps your account in good standing, not the amount that gets you out of debt. It is deliberately set low. Paying only the minimum on a $2,000 balance at 24% APR takes nearly twelve years and costs about $2,887 in interest, more than the original $2,000 you spent. Run it yourself below.

Calculator

The minimum payment, priced out

Assumes the common issuer formula: 1% of the balance plus that month's interest, never less than $25. Compare it to a fixed payment you choose.

Balance owed

APR %

Or pay this much monthly

Paying only the minimum –

Interest paid–

First minimum payment–

What a credit score is made of

A credit score is a lender's estimate of whether you pay people back. The common FICO model weights it roughly like this:

Score composition

Payment history: did you pay on time	35%
Amounts owed: how much of your limit you're using	30%
Length of history: how long you've had credit	15%
New credit: recent applications	10%
Credit mix: variety of account types	10%

Two of those, worth 65% combined, are entirely under your control this month: pay on time, and keep your balance well under your limit (under 30% of it is the usual guidance; under 10% is better).

Building history before you have any

The catch of credit is that you need it to get it. Three legitimate ways in:

Authorized user: a parent adds you to their long-standing card. Their history can report on your file. Costs nothing; ask.
Secured card: you deposit, say, $300 and that becomes your limit. The deposit comes back when you close or upgrade the account.
Student card: modest limit, designed for no credit history.

Then use it for one small recurring charge, set autopay to the full statement balance, and leave it alone.

If you only remember one thing

Autopay the full statement balance. Not the minimum. The full balance. One setting, set once, and the dangerous version of a credit card can't happen to you.

Module 06

Paying for what comes next

College, trade school, certification, or none of the above: each has a price and a payback. This module is about comparing them honestly.

Sticker price is not the price

The number a college advertises is its cost of attendance. What you'll actually pay is the net price: cost of attendance minus grants and scholarships, which you don't repay. Schools are required to publish a net price calculator. A $70,000 school can cost a given family less than a $30,000 one. Never rule a school in or out on the sticker.

FAFSA: The Free Application for Federal Student Aid: the form that unlocks federal grants, work-study, and federal loans, and which most states and schools also use to award their own aid. It is free. Filing it is the single highest-value hour of paperwork in this entire course, and many families skip it assuming they won't qualify.
Grant vs. loan: A grant or scholarship is money you keep. A loan is money you return with interest. Award letters often list both under "financial aid," in the same column. Read carefully.
Subsidized vs. unsubsidized: On a subsidized federal loan, the government covers the interest while you're enrolled. On an unsubsidized one, interest accrues from day one and gets added to what you owe. Same headline rate, meaningfully different debt at graduation.

Do the math: the borrowing rule of thumb

A widely used guideline: total borrowing should stay under the first-year salary you realistically expect. Borrow exactly that and repayment runs a bit over 13% of gross income for ten years, demanding but survivable. Borrow double it and the math stops working.

Borrowed at 6% over 10 years	Monthly payment	Total repaid
$15,000	$167	$19,984
$30,000	$333	$39,967
$60,000	$666	$79,935

Note what the right column does: at 6% over 10 years you repay about $1.33 for every dollar borrowed. That multiplier is the real price of the degree, and it belongs in the comparison alongside tuition.

Federal before private

Federal student loans carry fixed rates, income-driven repayment options, and hardship protections. Private loans generally don't, and many require a co-signer who becomes fully liable if you can't pay. Exhaust grants, then work-study, then federal loans, and treat private loans as the last resort they are.

If you only remember one thing

File the FAFSA every year, even if you're sure you won't qualify. Then compare net prices, not stickers.

Module 07

Investing, minus the hype

Investing is boring when it's done right. If it feels exciting, you are probably doing the expensive version.

Saving vs. investing

Saving protects money: a savings account is insured, won't drop in value, and earns a little. Investing grows money: it can fall, sometimes sharply, and has historically grown well over long periods. Money you need within about five years belongs in savings. Money you don't need for decades is wasted sitting there.

Index fund: A fund that buys a whole market at once (say, all 500 companies in a major index) instead of trying to pick winners. Low fees, instant diversification. It is the default answer for most long-term investors, including professionals managing their own money.
Diversification: Owning many things so that any one of them failing doesn't take you down with it. One company can go to zero. Five hundred at once, historically, have not.
Expense ratio: The annual fee a fund charges, as a percent of your money. 0.03% is $3 per $10,000 a year. 1.0% is $100, and compounds against you for decades. Check it before you buy anything.
Roth IRA: A retirement account you can open as a minor (with a guardian, as a custodial account) as long as you have earned income. You contribute money you've already paid tax on, and qualified withdrawals in retirement are tax-free. You can contribute up to your earned income for the year or the IRS annual cap, whichever is smaller; check the current cap, it changes.

A teenager with a summer job and a Roth IRA is combining the two most powerful things in this course: decades of compounding, and never paying tax on the growth. It is close to the best deal available to anyone.

Hype detection

"Guaranteed returns." Investment returns are never guaranteed. The word is a lie about 100% of the time.
Urgency. "Getting in early," countdown timers, closing windows. Legitimate long-term investing is never time-pressured to the hour.
An influencer's portfolio. They are paid for attention, not accuracy, and they're rarely holding what they promote.
Anything you can't explain to a friend in two sentences. If you can't say how it makes money, you're not investing, you're hoping.

If you only remember one thing

Buy broad, low-cost funds automatically and leave them alone. That beats most people who try harder.

Module 08

Getting scammed is a math problem

Teenagers get targeted more than most people assume: job scams, payment app fraud, marketplace deals, fake giveaways. Every one of them fails the same numeric test.

The test

Ask one question: where is the money coming from? A real business makes money from a product, a service, or a fee you can name. If the only source of the returns is more people joining, it's a pyramid, and the math guarantees that most participants lose. Not "might": guarantees. There are never enough new people.

The four red flags: any one is enough to stop

They contacted you. Unsolicited DM, text, or email offering money.
Urgency. Right now, today, before it's gone. Pressure exists to prevent you from checking.
Secrecy. "Don't tell your parents." Real opportunities survive being discussed.
Strange payment. Gift cards, crypto, wire transfer, Zelle to a stranger. These are chosen because they're irreversible. No legitimate employer, store, or agency needs a gift card.

The ones aimed at you specifically

Fake check / overpayment job. "Deposit this check, keep $300, send the rest for supplies." The check bounces days later, after your transfer is gone. You owe the bank the whole amount. Deposited ≠ cleared.
Payment app scams. Zelle and instant transfers are effectively irreversible, closer to handing over cash than to a card payment. Only send to people you know. If someone "accidentally" sends you money and asks you to send it back, it's stolen funds and you'll be the one holding the loss.
Marketplace deals. A price far below market is the bait. Pay in person, in a public place, never by gift card or wire.
Account takeover. Nobody legitimate (not your bank, not Apple, not a game platform) will ever ask for the verification code they just texted you. That code is the key to your account. Sharing it is the theft.

If it already happened

Tell someone immediately: a parent, a teacher, your bank. Speed determines how much is recoverable, and embarrassment costs more than the scam does. In the U.S., report fraud at reportfraud.ftc.gov and identity theft at identitytheft.gov. Being targeted says nothing about your intelligence; these are professionals, and the scripts are tested on thousands of people.

Exit quiz

Eight questions

One per module. Pick an answer and the reasoning appears; getting one wrong is the most useful thing that can happen here.

Not started

1. You work 12 hours at $18/hour. Roughly what should you expect to actually receive?

2. Your balance is $4 and you buy three $6 items with a debit card that has overdraft coverage turned on. What's the likely cost?

3. Which saving method reliably works best?

4. At an 8% return, how long does money take to double?

5. How do you use a credit card and pay no interest at all?

6. Two colleges: sticker prices of $68,000 and $32,000. Which costs your family less?

7. Two funds track the same index. One charges 0.04%, the other 1.1%. Over 40 years, how much does that matter?

8. An "employer" sends a check, tells you to deposit it, keep $300, and send $1,500 back for equipment. The money appears in your account. Now what?

Finished the teen track? The seniors track covers fixed-income budgeting, reading statements, and scam recognition, worth walking through with a grandparent. Numeraldo also teaches both of these in person; write to info@numeraldo.org to bring a workshop to your school or club.

↑ Back to the top Seniors track →

Keep going

Finished the teen track? Here is what is next.

Track two Financial literacy for seniors The fixed-income month, what the mail really says, bank fees, safe interest, withdrawals, scam scripts, and who to call. Open the seniors track → Reference The glossary All 47 terms from both tracks, in plain language, searchable and filterable by track. Open the glossary → Course home Start from the overview How the course is built, what is in each track, and notes for teachers and facilitators running it in a room. Back to the overview →

About this course. Numeraldo is a numeracy education nonprofit. This material is educational and general. It is not personalized financial, tax, or legal advice, and it describes United States rules and institutions. Tax rates, contribution limits, and aid programs change; verify current figures with the IRS, your state, or your school before acting on a specific number. Dollar figures in worked examples are illustrations chosen to make the arithmetic clear.