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Lessons They Didn't Teach You In School: How to Be a Financial Wiz Kid

May 01, 2019 - Posted by: Rocky Mountain Credit Union

Classrooms are good for a lot of things, but real-world skills are sometimes hard to find inside those walls. If your financial education has been a little lacking up till now, don’t worry! Here’s how to wow with your financial know-how.

A Rainy Day Fund is your Best Financial Friend 

How much of your paycheck do you save each month? Putting aside 10% of each check in an emergency fund is a good place to start. Transfer that to savings as soon as the check clears—before you pay any bills or do anything else with the money. You can even set up automatic transfers scheduled to move on payday. That emergency fund will be there when your car needs repairs or you need to make an unexpected trip to visit an ailing relative. And it can help you avoid racking up credit card debt if you are laid off unexpectedly.

Start Planning for Retirement Right Now

It doesn’t matter if you’re 24 or 42. If you’re reading this, start planning for retirement. If you already have, good for you! Keep up the good work. If you haven’t, it’s not too late to get started, and the sooner the better. Compound interest and stock market growth pay dividends (literally!), so take advantage of them as early as you can to get the highest returns.

Monitoring your Credit is Vital for a Healthy Financial Life 

You can check your credit score for free once a year with each of the major credit bureaus. If you spread that out, that means you can check that all-important number almost once a quarter. Since your credit score matters more than ever—and an unexpected dive can signal identity theft—it’s in your best interest to check up on it. 

Credit Cards are not the Enemy

Increasing debt in the United States has given credit cards a bad reputation in recent years, but they can be important for your financial health. With high interest rates cranking the amount owed higher, carrying a balance from month to month can get people in a tight spot. But if you pay off your bill on time and in full each month, a credit card can help build your credit score and bring you great perks like cashback and travel points. It’s all about how you use it.

Think About Insurance - of All Sorts - Before You Need It

Sure, you have to have car insurance to drive a car, and homeowners insurance to buy a home, but what about renters insurance? Are your belongings covered if your apartment floods? How about from theft? What about when you’re traveling and your flight is cancelled due to weather? Thinking about insurance before you need it is a key step in a healthy financial life, saving you more in the long run if something unexpected happens.

Don’t let your money just sit around: make it work for you

 

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