Financial Lessons Everyone Should Learn Before Leaving College
Reality can be a scary place for people that are about to emerge into their careers and the world. Financial lessons are picked up all along the way as students are forced to face adult problems and decisions, but for some, not all of the important lessons are learned right away and important information is missed. These are six financial lessons that everyone should learn before they leave college and enter the real world.
1) The Importance of Paying Credit Cards Off
Many people view credit cards as their backup solution when they have expended all of their tangible money. However, credit cards are not the same thing as free money, and the bills incurred will need to be paid off sooner or later. Furthermore, any charges to the credit card accrue interest at a high rate. Not repaying credit can lead to a poor credit score. This means that it could be impossible to buy a home, buy a car, apply for business loans, etc.
2) Learning to Budget
Budgeting is something that some people do and other people ignore entirely. However, it can be the difference between having cash to spend at the end of every month and scrounging change out of the couch for 25 cent noodle cups. Find out exactly how much money you take in each month and record how much you need for bills and other necessities or leisures. Once you have put aside the money that you need to meet your monthly expenses, the rest of the money should be stowed away in savings for a rainy day or invested.
3) Learning How to Invest
Learning how to invest money is something important that anyone and everyone should take the time to learn about before they enter the real world. Many retirees are able to leave work by a reasonable age due to their wise investments, and for some, it’s their sole source of income. Learning how to invest you money properly is invaluable in the current economic climate.
4) Save Whenever Possible
Any time you find yourself with an extra amount of cash on hand, it’s a good idea that you don’t sit down and ponder all of the ways in which you could spend it. Instead, put it back into a safety/emergency fund for later use if a catastrophe ever arises. You never know when the car is going to break down or you are going to get sick and be unable to work. Remember; it’s always good to have plenty of backup cash on hand in the event that disaster strikes.
5) Protect Yourself Against Fraud
Lastly, many people leave college without understanding how rampant fraud is. You can protect yourself against identity theft and fraud by double checking who you hand your information over to, understanding where you purchase goods from online, regularly scanning your personal computer for ad-ware or spy-ware, and much more. An ounce of prevention is always worth a pound of cure. Make sure criminals are not profiting from all of your hard work.
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Category: Budget, Financial Education
