School teaches us a lot, but not about money. You learn about he intricacies of Mesopotamian irrigation and how to draw a turkey with your hand imprint. But you never learn personal finance 101!
In this video I break down some personal finance basics, how to save money, some teenage money management tips, and what to do with money in your 20s.
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**Best Credit Cards for Beginnershttps://www.youtube.com/watch?v=2KEjdh5ekaM
**Best Checking Accountshttps://www.youtube.com/watch?v=l2jxwE27UlA
Personal Finance Tip #1: Make a budget
Making a budget allows you to see where all your money comes in and goes out.
Use Mint or a program similar to Mint to budget your money. Mint allows you to see all your transaction history across all linked accounts. Once you know where your money is going, it will get easier to budget.
Personal Finance Tip #2: Open a checking and savings account (or a hybrid checking/savings account)
You need a place to put your money that is not under your mattress. Having a bank where you can deposit checks, save your cash, and pay your bills is the most basic first step for personal finance success.
Do not go with Bank of America, Chase, or Wells Fargo. They charge you $12 every month unless you meet certain criteria.
I recommend going with SoFi Money. It is an online checking/savings hybrid account. SoFi Money is free to use and gives you great interest on all your money.
💰 $25 signup bonus link for SoFi Money: https://bit.ly/3h3vX7o
Personal Finance Tip #3: Open a credit card
Developing a credit history is very important. If you have a high credit score, you will pay less in interest on mortgages, auto loans, and almost any other debt you take out.
Having a credit card also allows you to save money on everyday things you buy. For example, using the right credit card can save you 2%-5%+ on gas, groceries, entertainment, and almost everything you can think of.
I recommend getting Discover. It is easier to qualify for. Discover has no annual fee and gives you great cash back on rotating categories. (Click here to get it: http://refer.discover.com/s/yydnvt).
Also, pay your credit card balance in FULL every month. Never, ever carry a balance.
Personal Finance Tip #4: Pay yourself first.
You need to pay yourself before you think about spending your money. Paying yourself first is a great automatic way to get in the habit of saving. You will never get ahead unless you save!
Specifically, I would take 5% or 10% of every dollar you get and automatically transfer it to your savings account.
#5: Invest in your 401(k), IRA, or after tax account
If you never find a way to make money when you sleep, you will work forever. That is why investing is so crucial. If you have a 401(k) at work, understand what your employer matches and match to that amount. This is free money!
If you do not have a 401(k) at work, open an IRA. I recommend Vanguard. Keep your expenses low and invest in a broad based index fund like VOO. Buy and hold forever.
Personal Finance Tip #6: Avoid student loans
Student loans are non-dischargeable in bankruptcy. This means that they will follow you around forever no matter what happens, with a few limited exceptions.
Get scholarships, work part time jobs, go to community college, or go to a state school to keep your expenses low. There are even programs like the Arizona State University / Starbucks partnership where working at Starbucks will allow you to get your tuition covered for free! (check it out here https://www.starbucks.com/careers/working-at-starbucks/education)
Personal Finance Tip #7: Do not buy a new car
Buying a new car is a waste of money. You will lose tons of money just driving the car off the lot. Buy a used car to save lots of money.
Personal Finance Tip #8: Learn about taxation
You pay taxes on everything. Take some time to understand it. For most people, taking the standard deduction ($12,200 for individuals and $24,400 for married folks in 2019) is the best option.
Personal Finance Tip #9: Never stop learning about personal finance
You spend 40-50+hrs a week in your job or at school, but how many hours do you spend learning about personal finance? Take a few hours a month to learn about investing, taxes, real estate, mortgages, credit cards, and other personal finance basics.
Personal Finance Tip #10: Look at cheap ways to have fun
National parks, hostels, camping, cooking at home. These are all things you can do to save money.
What do you think? Let me know in the comments below.
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