7 money tips to help you become financially aware and independent
Don’t Count On Your High School… Right now in the US the majority of high school graduates never take a single class on personal finance or economics. Without the basic understanding of financial terms and practices, you can be totally unprepared. If your school doesn’t teach a minimum of one year of financial education, it’s up to you to learn the skills needed. Thank goodness for the Internet!
Modern Money… Yes, dollars and cents are still used, but not as much as you think. It’s estimated that less than 10% of the currency in the world is actually paper or coins. This means you need to know how to manage invisible money, including paying bills and ensuring accounts don’t hit zero.
Saving Money… Seems simple but 39% of Americans admit to having zero in a savings account. 57% say they have less than $1000 in a savings account. Take a portion of any money you get (birthday, holiday, babysitting, mowing grass, etc.) and place it in a savings account. As a rule, 50% should go to savings. (40% to spend and 10% to share.)
Investing… If you ever want to retire, you will need to invest money somewhere along the way. Lucky for you there are plenty of resources available to teach you how, including some fantasy investing games which would allow them the chance to invest pretend money. Practice makes perfect … or at least better educated.
Credit Cards… Even before stepping foot on a college campus you will be bombarded with marketing materials from credit card companies. So be ready! If you do open a card, make sure you sign up for spending notifications or that it’s only used for emergencies. Make sure to pick a card with a low annual percentage rate and it is paid off each month.
Student Loans… Everyone thinks they are a great idea at the time and everyone has the best intentions to pay them back, but currently U.S. student loan debt is $1.45 trillion and nearly 7 million loans are in default. Follow this simple rule – don’t borrow more than you would earn in your first year out of school. In other words, if you are going to make $24,000 as a first-year teacher (about $20,000 after taxes), don’t take $50,000 in loans.
Compound Interest… Compound interest is when a bank pays interest on both the principal (the original amount of money) and the interest an account has already earned. As an example, if you put $1000 in the bank with compound interest of 10%, in 20 years the $1,000 would be more than $7,000. Without compound interest, it would be $3,000.
About the Author: Gregg Murset is the co-founder and CEO of BusyKid, Gregg is best known as groundbreaking inventor of My Job Chart which grew to nearly 1 million members in four years. My Job Chart was the first electronic chore/allowance platform to take advantage of our modern digital society. A father of six, Gregg is a certified financial planner and consultant who also became a leading advocate for sound parenting, child accountability and financial literacy. In 2014, he was named Chairman of 2014 “Smart Money Week” for the state of Arizona, as well as, the National Financial Educators Council Financial Education Instructor of the Year. A firm believer in improved financial education in schools, Gregg has conducted hundreds of media interviews around the U.S. in hopes of much needed change. Promoting these changes, Gregg took his family on a pair of RV trips in 2014 and traveled nearly 10,000 miles in just 31 days. When the trips were complete, the family had stopped in 22 different cities in 27 states and performed normal household chores for families in need and organizations requesting volunteers. Gregg is considered a pillar of his Arizona community and is regularly attending his kids sporting events or taking them on weekend camping trips.
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