Top 10 Takeaways from Financial Lit

1. Start Saving Early

Once you gets a job and are able to set aside money for retirement, you should! The earlier the start on saving for retirement, the more secure you will be once the time comes. This is important because many people don't realize how much money they should have saved and saving earlier will allow for a person to have a lot of money saved up for the cost of living and then any other discretionary spending.

2. Cosign with a Parent

If one or both of your parents are signing for a loan, see if you are also able to sign on with them. This will establish a good credit history with your bank and give you a head start in the financial world. This is important because it is a good idea to start a relationship with your bank as soon as possible so that later on when you have your own account, you will already have a higher credit score than most and a head start compared to others.

3. Keep Track of Your Spending

Keeping track of monthly spending is a good way of seeing where you spend the most money. It's very important to keep track of your spending because many people don't realize how much they spend on non-necessities. Learning where most of your paycheck goes will allow you to see what can be cutback and where other money can be relocated.

4. Split Savings Between Stocks and Bonds

It's a good idea to split your savings between stocks and bonds. That way there is some risk and higher reward possibilities but there is also more secured money that is invested. This is important to know because although one can really bank off of the rewards from the stock market, it is unreliable and you can potentially lose all of your money that you had saved up. Having some money set aside for bonds will allow you to receive a modest award but will ultimately keep your money safe.

5. Keep Money for Emergencies

It's always a good idea to have money set aside for any emergency. It is recommended that you keep at least six months of savings set aside exclusively for emergencies to cover anything that may come up. This is extremely important because even if the money sits there for a while, there can always be some type of emergency and having that extra cash can prevent you from taking out a lot of money to pay for whatever that emergency may require.

6. Pay Yourself First

After getting your paycheck, you should set some of the money aside to "pay yourself" (save the money). This money can either be put away as savings for retirement, savings for a big purchase, or invested. This is important because if you treat this as an expense, it is more likely that you will start to save for goals.

7. Only Use Up to 30% of Credit Limit

Try to use only 30% of your credit limit. Only using up to 30% assures the bank that you will be able to pay that money back and it also sets yourself a reasonable amount to pay back. This is important to know because taking out the absolute limit will lower your credit score because banks are a bit hesitant to believe that you will be able to pay all of the money back.

8. Pay More Than the Minimum Payment

Although it's good to always pay at least the minimum payment, try to pay as much as you can. This way the money won't keep adding up to become an unmanageable amount after a while. It also makes you seem more trustworthy to your bank.

9. Always Check Your Paystubs

It's always good to check your paystubs for any miscalculations. Sometimes getting a raise may not be calculated into the paystub and so you are left short on your paycheck. This is important because without checking your paystub for any errors, you can go on getting underpaid without even knowing about it.

10. Do Not Claim Too Many Allowances

Although claiming allowances and having less money taken away can sometimes help when it comes to weekly or monthly spending, it can cause you to owe money back in taxes. This amount can be very little or very large. Claiming less allowances can help prevent you from owing a lot of money back in taxes and may even allow you to get a tax refund.

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