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12 Things You Wish Your Parents Told You About Money

12 Things You Wish Your Parents Told You About Money

Managing your finances properly can be a tricky business, especially if a person is fresh out of high school or college. He or she might have a new job and a checking account. They might think they are ready to take on the world, but that new income might suffer as a result of improper money management.

Learn about the top 12 things that most people wish their parents had told them about money:

1. Savings accounts must be prioritized –

From the moment that a person gains access to a steady job, spending money is the ultimate goal for them. However, it’s just as important to save some of those funds as well. Ideally, save about 20 percent out of each paycheck for comfort in times of emergency or personal need, from a sudden job loss to a trip to the tropics.

2. Gold isn’t the best investment –

Gold has always been the go-to investment for people who don’t know much about the investing arts. To avoid any major losses, diversify those investments with both stocks and bonds. The money will inevitably grow, but just at a slower rate.

3. Try cash over credit cards –

Paying with debit or credit cards is convenient. However, it also dissociates people from their money. If the card goes through, there must be a lot of funds. Use cash so that consumers always know when they’ve run out of money. The checking account will be healthier as a result.

4. Always match your 401(k) –

Above and beyond the 20 percent added to savings, most people should place between 10 and 15 percent of their income into a 401(k) or similar retirement fund. If an employer offers a match, such as 5 percent, always match their contribution. Adding anything lower is just losing money from the employer.

5. Student loan debt can be a problem –

Be aware of the student loans being taken out for a higher education. Those funds are due and payable once graduation occurs. Certain professions may not pay enough to cover those loans so do some research before signing on that dotted line.

6. Applying for a dozen credit cards isn’t the best idea –

Credit-card companies may send a handful of offers to a single person, but don’t apply for each one. One or two cards are safe enough to establish credit. Too many cards can create balances that may be difficult to pay back.

7. Bankruptcy isn’t the end of the world –

Many parents tell their grown children that bankruptcy must be avoided at all costs. It’s essentially a last resort when finance planning breaks down. If a person needs bankruptcy, however, he or she can recover from it. It’s designed as a way to start fresh so that consumers can continue to live comfortably.

8. Budgets must be followed –

Always keep a budget for the household. Regardless of the income amount or people living in the home, residents must make more than they spend. Everyone should understand the budget’s parameters too. If there isn’t enough money for a purchase one month, it must be postponed to maintain the budget’s integrity. Click here for a free budget building tool!

9. Those fees add up –

Avoid fees whenever possible. Use ATMs that are partnered with a particular card. Set up automatic payments to stop any late fees from incurring on monthly bills. Fees can quickly add up if a consumer doesn’t pay attention to their actions.

10. Don’t play the lottery –

The lottery may appear tempting after turning 18 years old, but don’t waste any money. There are better odds that a person will be bitten by a shark than winning it big. Place those extra funds in a savings account.

11. Increase your deductibles –

Home- and auto-insurance policies are famous for their varying deductibles. In essence, the deductible is what consumers pay until the insurance kicks in afterward. For most people, they don’t claim anything on these policies unless a major accident or disaster occurs. Raise those deductibles so that the monthly premiums minimally impact the budget.

12. Don’t skip or skimp out on life insurance –

Adding another insurance policy to those monthly expenses seems like overkill, but don’t overlook the importance of life insurance. If something happens to a person, any debt becomes due from the next of kin. Allowing the life insurance to kick in reduces financial strains on loved ones.

Conclusion:

Take a financial literacy class or a money management class, ask lots of questions of those parents today, and save as much as possible. Money management can be simple when a person learns the basics about finances and applies them in everyday situations. With a little willpower and career effort, there can be money to spend and save, all in good time.

If you’d like to speak with a certified credit counselor for free, just give us a call at 1-866-699-2227 or visit us online at www.advantageccs.org and you can fill out a contact form, start a free online credit counseling session, or Live Chat with a counselor today!

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12 Things You Wish Your Parents Told You About Money
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12 Things You Wish Your Parents Told You About Money
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Managing your finances properly can be a tricky business, especially if a person is fresh out of high school or college. Learn about the top 12 things that most people wish their parents had told them about money!
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Advantage Credit Counseling Service
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