By: Sammi Coppedge, Marketing Assistant
If you asked the average American how they felt about money, they would probably respond a few different ways. First, everyone wants it. Whether they have a little or they have a lot, most people would tell you that they wish they had more money. Secondly, you would realize that it is common for people to be intimidated by money. Most people are not empowered by money, they are frightened by it. Instead of learning to be proactive about it, they tend to be apprehensive. However, when people learn to take control of their finances, incredible things can happen. So we compiled a list of the basic financial lessons every person should know. Check them out—it could change the way you deal with your finances.
Live Within Your Means
In order to be financially successful, it is crucial to learn how to live within your means. While credit cards and loans can be a great thing, they can also be dangerous to someone who is not satisfied or able to survive off of their current disposable income. To really live out this lesson, one must learn to budget, plan, and prepare for the things they need, not the things they want. Learning to live within your means is not always an easy lesson, oftentimes it can be difficult to learn and hard to follow. However, in the end it all pays off when you are not constantly paying off your debts, rather, comfortably living and succeeding with what you have.
Saving now makes you richer later
Saving money can be a hard thing to do. Yet, it is one of the smartest financial decisions a person can make. Whether you are saving money in a basic savings account, or investing it in a CD or mutual fund, the outcome is far greater than the instant gratification of spending it. When it comes to saving, there are two basic reasons for doing so. First, there is saving money for a desired event or purchase. This could be for a child’s education, a future home, a new car or retirement. A person also needs to save in an emergency fund. This allows a person to have more money in the future to spend on unforeseen expenses like an automotive repair or a new washer. Saving money is one of the most important financial steps a person can take.
Watch out for scam artists
It is all over the news. You constantly hear stories about people who donate money to fake charities, have their identities stolen, or their credit cards compromised. Still, you never think it could happen to you—until it does. One important lesson to know in order to become financially successful is beware of scam artists. Protect your passwords, secure documents, and always make sure you are sending your money to a legitimate organization or purchasing from a real business. You work hard for your money, so protect it.
Your credit score does matter
Regardless of your feelings towards the credit system, having a good credit score is important. For most people, there will come a time when they need to take out a line of credit or loan. It is important to monitor your credit score regularly as well as understand the factors that go into your score. You can visit www.annualcreditreport.com to receive a free credit report each year. To avoid paying a fee, you should never provide your credit card or debit card information. Remember, the Federal Trade Commission defines free as without obligation. Be alert and read all of the terms and conditions.