Warm welcome to all my readers to my first post covering personal finance. In this post, I would explain why financial literacy for students is important. And why personal financial planning would set them up to the Future. Recently I was researching on this topic and found more schools especially in the USA are adding personal financial management course in their syllabus.
And in a survey, 3 out of 4 US citizen believe money management course should be taught to young student. Let us know why this Subject is valued nowadays so much. Because, when a student completes his High School to point of his/her retirement.
He/she should know a proper use of money, saving themselves from any money problem.
“Fun Fact – 7 out of 10 people lose all of their lottery money in less than 5 years”
So, now you must be asking yourself. Why would be people be that much of a fool. That is because they have no financial knowledge. So, now you might understand why financial long term goals are essential. And with that knowledge, you can set long term goals for saving money.
Top 10 personal finance strategy
So, here I would put 10 personal finance strategy taken from Investopedia and relate it to a graduate –
Implementing a Budget –
Devising a Budget is the most important thing to learn when you have a limited income like majority of the people. So, one must know where to spend and where to not spend. This comes by experience, but people learn it in high school through because of financial literacy course. They would get a head start.
Which is necessary knowing the fact that young people are reckless in their spending. This is especially due to influence of online influencers and celebrities. That Endorse products commercially. But young people develop bad spending habits. Bombardment of advertisement is also an important point.
A good mindset is also important to succeed, on which I have wrote an article in the past. A summary on “rich dad and poor dad” book. Budget apps are also available to keep yourself in control.
Emergency Funds creation –
On this topic, Experts say to save at least 20% of your income for emergency. Which is what most of the young people not attracted to. They are busy in buying unnecessary stuff with a thought of enjoying and not focusing on long term goals. As we all have that dream from childhood to become an adult and spend as we like. Lol.
But I would say even if you have succeeded in creating an Emergency fund. Then save 20% for retirement fund and future business investments.
Limit your Debt as for Personal Finance –
This is the point I favor the most, to keep debt in limit can keep one stress-free. People are going in debt over credit card spending and knowledge of personal finance from young age can keep them free from unnecessary spending. This key is to spend less than what you earn. Debt can be helpful in some cases, such as owning assets.
Keep your credit card in check –
The benefit of credit cards are many, but the con is very simple, the amount is not in check most of the time. And the interest accumulated over a long period of time. This is mostly done by young people due to lack of money management skills.
If I talk about myself, I have never used credit cards. I am just using debit cards for a long time. It does not collect interest that I need to pay. Other than that, I use Digital payment wallets on my mobile. Although those offers on credit cards do make me interested to have one. But I like it stress-free. Having more should be replaced by being happy.
Credit Score Evaluation –
For many people who need loans and mortgages in the future, credit score is very important for them. Credit score let people to take loans that are more in amount. Different banks have different method to evaluate credit score. It also depends on whether the bank is Interest based or interest free unconventional bank.
Your Credit card can also be used to build your credit score. There are ways to increase your credit score that includes and according to FICO –
- Payment history – 35%
- Amounts owed – 30%
- Length of credit history – 15%
- Credit mix – 10%
- New credit – 10%
Set Safe Side for your Family with Personal Finance –
It is a process of setting up ways for your family future. In case if you are not present for them. This includes setting up trust, Will, Medical safety through savings and insurance.
Student Loans Payoff –
Because nowadays, Tuition fees is so high, a lot pf people are taking loans to study. I am even planning to write an article over it. Young graduates should understand what is best for them.
Taking a short term or long term loan according to circumstances and future planning is necessary that is planned with the help of Personal finance.
Creating a Retirement Fund –
Experts say in the time of retirement, you actually need 80% of your income monthly to live. A graduated person might think retirement is a lifetime away. But it comes sooner than you think. So, having a lifetime plan is necessary from the start.
Tax Break Maximization –
This is what young people might not know about if they have never learned Personal Finance. There are legal methods implementing on which you would get relaxation on tax. Saving on taxes can be used for paying debts, Savings for future or investments.
Break in Personal Finance-
Make sure to take breaks in between handling your finances seriously. As going out on vacations and outings are also necessary even if it does not save you money. Also, Financial planning is not easy to understand until and unless you study a lot. Or you could hire a professional or have a family financial planner, like people have fixed family doctors to whom they consider.
Yeah, Personal Finance is difficult and for it, I am here for putting up on the most searched and important personal finance topics. In a simpler way that people of all ages could understand. I told my followers about Finance. But for complex Finance there are very popular magazines and channels.
Personal Finance, which is important for all ages, is very less covered by bloggers. But now I am here for it. So, Subscribe and stay connected. And get every update from E-mail.
FAQ Section –
Number 1 tip is controlling yourself with case to your finances. Plan by complete evaluation of your income and spending. Learn with educational content and Blog website like socialartise.com. Learn, implement and take advice from Certified financial planners.
No, it is not. It is not certainly hard to learn. If investors in stock market with non finance background can learn technical aspects of finance. Personal finance is a piece of cake. It is easy to learn, but hard to implement.
Start by learning it by free educational content available online. Try with more authentic websites like socialartiste.com. Implement from the start by starting with budgeting, and you might end up saving money from a more difficult personal finance concept like Tax Breaks. Just start with a good plan, and eventually you can figure it out.
It helps you to create effective and efficient budget, Save money, money management etc. You would achieve a high quality decision-making, minimize your risk, Cost effective decisions. It might not improve your financial situation in two or three days, but eventually it will. It has a compounding value in a long run.
No, it is not, Personal finance is a concept of finance which is at an individual level of a person. But marketing is to increase your reach among the potential clients with the help of different marketing methods. Marketing is more commercial in nature.
Trade in Personal Finance is the opportunity cost. The highest value substitute that is given up when the choice is made.
Budget is the foundation of personal finance. Organize your spending according to your earning. If one is able to do it. The other tasks are easily achievable.