Do You Know About Money

Do You Know About Money

Do You Know About Money?
In a​ test of​ basic economic principles given to​ 2000 Americans,​ both adults and teenagers,​ the​ average grade was failing .​
Throughout the​ years,​ it​ has been proven by numerous studies that when high schoolers graduate,​ they leave with little understanding of​ personal finances.
I was never taught how to​ count back change,​ balance a​ checking account or​ understand compounding interest .​
But yet,​ I​ graduated with the​ highest math honors,​ having tackled calculus and physics courses at​ the​ neighboring college .​
But at​ no point,​ was I​ taught the​ basics of​ finances before I​ entered college .​
Nor were many other American teenagers.
And now credit card debt and financial troubles seem to​ be everywhere .​
It is​ surprising how many people don't really understand their finances .​
For example,​ one of​ my close friends recently told me that her credit cards had great rates once the​ 0% interest expires .​
I​ told her that her rates can go up at​ any time,​ but she didn't believe me.
So what do you and your children need to​ know about money?
You need to​ understand the​ basics of​ how to​ balance your checking and how to​ budget your income .​
These two practices will keep you financially grounded .​
If you can balance your account and stay within your budget,​ you are probably doing well.
What can throw you off track is​ debt .​
And it​ is​ coming at​ you from all sides .​
You need to​ understand that there is​ good debt and bad debt,​ but that debt becomes fatal if​ you can't afford what you have racked up .​
For example,​ having a​ home mortgage is​ good debt .​
But if​ you can't afford the​ mortgage payment and risk defaulting on​ the​ loan,​ there is​ no good in​ it.
You have to​ know how debt works .​
Understand the​ advantages and disadvantages to​ using your credit .​
If you have or​ are thinking about taking out a​ credit card,​ I​ suggest that you learn all of​ the​ tricks of​ the​ trade .​
I​ would say that the​ one thing to​ remember is​ that debt costs you .​
All debt costs you .​
Credit cards,​ auto loans,​ mortgages and student loans aren't designed for your good .​
They are there to​ make the​ lenders money .​
Keep that in​ mind.
When you are thinking about taking out a​ loan,​ you should do main things:
Know your credit score and what your credit report says .​
Figure out the​ total cost of​ the​ loan .​
This includes all of​ the​ interest you will have to​ pay back .​
The number might surprise you .​
See how long it​ would take you to​ save for it​ versus paying off the​ loan .​
Shop around for the​ best interest rates and terms.
One of​ the​ most important things is​ understanding compounding interest .​
This can be slightly hard to​ get a​ grip on​ at​ first,​ so have someone show you how the​ numbers work .​
And keep in​ mind that though interest can cost you in​ debt,​ it​ can give to​ you in​ savings.
Finally,​ you need to​ understand that as​ an​ adult,​ there is​ more to​ finances than just money .​
It is​ about self-control,​ trust and other emotions .​
There are also many facets to​ managing your finances .​
You have insurance policies,​ investments and wills and trusts to​ consider .​
It's all about making the​ best future for you and your family .​
That's what money spent wisely can do for you .​
Take the​ few hours to​ learn how to​ get there .​
It will pay you back thousands and thousands of​ times.

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