Unfortunately with many people, like myself, we were never taught about money growing up. The school system didn’t place an emphasis on this and I know this first hand because I’m a retired public school teacher. But it’s okay because today, I want to talk about the 10 money lessons that school should have taught us and how we can take action to be better with our money.
1. How to create a budget and stick to it. Many of us leave school without knowing how to manage our money and create a realistic budget. One way to do this is by using budgeting apps like Mint or YNAB, which stands for "You Need a Budget." And yes, I’ve used Mint myself for several years. No, this isn't sponsored. I just really like Mint. These apps allow you to track your spending and create a budget that works for you.
2. The importance of saving. While we may have learned about saving in a general sense, especially with me and growing up in an Asian family, we often don't know how to actually save money or why it's so important. One way to start saving is by setting aside a certain amount of money each month in a high-yield savings account, like those offered by Ally, Marcus by Goldman Sachs, or Wealthfront. Again, not sponsored. I use Ally and Wealthfront myself. If you’re saving your money in a traditional bank, you’re probably only getting a penny for every one hundred dollars saved. But by saving your money in a high-yield savings account, you can get two to four dollars instead. It may not sound like much, but if you have a lot of money in your savings account, you could be missing out on free money that can range from hundreds to thousands of dollars each year. Not even joking.
3. How to invest. Investing can seem intimidating, but it's a crucial way to grow your wealth over time. Some websites and apps that can help you get started with investing include TD Ameritrade, Charles Schwab, and Vanguard. For me, I use TD Ameritrade and Charles Schwab for my retirement accounts and they’ve worked really well over the last several years. If you have a favorite brokerage app that you’ve been using, comment below and share with everyone else. If you also want to learn how I invest, you can also check out my stock investing class at calltoleap.com. I currently have more than 3,000 students enrolled and investing for their future already.
4. How to negotiate. Don’t be someone who just accepts their salary. Instead, know that it’s important to learn the skill of negotiating. I personally learned how to negotiate my pay when I was tutoring and I literally doubled what I was making within a year. Websites like Glassdoor and LinkedIn can help you research salary ranges for your industry, so you have a good idea of what to expect. Always pursue for more while increasing your skills and providing more value.
5. The importance of good credit. Your credit score can affect your ability to get a loan, rent an apartment, and even get a job. Websites like Credit Karma and Credit Sesame can help you track your credit score and offer tips for improving it. You can also improve your credit score by making sure you pay off your credit card bills in full each month and by keeping your credit utilization ratio under ten percent. Thirty percent is good. Under ten percent and above zero percent is even better. I’ll talk more about how I got my 800+ credit score in another article, so make sure you subscribe to my email list to read it later on.
6. How to protect yourself from fraud and identity theft. Unfortunately, these are issues that we may not have learned about in school. It's important to use strong, unique passwords for all of your accounts and to be cautious when giving out personal information online. Sorry friends. “Password” is not a password.
7. How to save on taxes. There are many ways to save on taxes, such as contributing to a retirement account, taking advantage of tax deductions and credits, and using tax software to ensure you're getting the maximum refund.
Stop thinking that you can’t have tax advantages because you’re an employee. Instead, one of my favorite ways to get tax benefits is to simply open a Roth IRA. This means that if you invest and take out your million dollars by the time you retire at 59.5 years old, all of that money will be tax free! Pretty cool right?
8. How to pay off debt. If you have student loans or credit card debt, it can feel overwhelming to try and pay it off. A good first step is to create a plan for paying off your debts, which can include consolidating your loans or using the debt avalanche method. Websites like Credit Karma and Student Loan Hero can help you track your debts and find the best repayment options.
9. How to save for a down payment on a house. Buying a house is a big financial decision, and saving for a down payment can be a challenge. One way to save for a down payment is to open a dedicated savings account and set aside a certain amount each month. Apps like Digit or Qapital can also help you save automatically by rounding up your purchases or transferring small amounts of money from your checking account to your savings account.
10. How to protect your assets and plan for the future. This can include things like creating a will, setting up a power of attorney, and getting insurance to protect your loved ones in case of emergencies. Websites like LegalZoom and Nolo can help you create legal documents and find the right insurance policies for your needs.
I hope these ten money lessons and actionable steps have been helpful for you. If all of these steps feel too overwhelming, it’s totally okay! Just choose one thing to work on for this week and another thing to work on the following weeks. The most important step is to just get started!
Have a wonderful day!
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