6 answers
Alli
Student
Rootstown, OH
1
Question
Asked
462 views
What are some tools that help you learn budgeting and financing?
I am going to be starting my first job and I don't know anything about financing. I don't even know what credit and debit is. I really wanna learn but I don't even know where to start.
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6 answers
Doc Frick
Career Coach and Mentor
1351
Answers
California, CA
Updated
Doc’s Answer
Alli the first money management skill you'll need to master, is keeping a eye on your cash flow, a fancy way of saying “know where your money is going.” After you've tracked expenses for a few months, you'll discover you're spending more on certain things than you'd thought, such as eating out or entertainment. With a better insight into your spending, it will be easier to make an accurate budget and think about reallocating funds to efforts that will have more long-term benefit, like saving for a car or a house for example.
FINANCIAL GOALS
One of the best money management skills is the ability to set — and stick to — financial goals. This could be anything from spending, to having enough money to retire comfortably. Without set goals in mind, you’ll just be flying by the seat of your pants. Rarely does that work in your favor. Goals can also be small and simple. For example, setting aside $50 a month in an emergency fund for unexpected expenses. Having achievable money goals is never a bad idea as you’ll always have something that you’re working toward.
DEBIT VS CREDIT
When you use a debit card, the funds for the amount of your purchase are taken from your checking account almost instantly. When you use a credit card, the amount will be charged to your line of credit, meaning you will pay the bill at a later date, which also gives you more time to pay.
It’s easy to get confused between debit and credit cards. Both carry the logo of a major credit card company, such as Visa or Mastercard, and can be used at most retailers to purchase goods and services. The key difference between the 2 types of cards is where the money is taken from after a purchase is made. When you use a debit card, the money comes directly from your checking account. When you use a credit card, the purchase is charged to a line of credit that you are billed for later.
How the cards are managed and the fees you can incur all vary but stem from this difference. No matter what type of card you choose, it’s important to understand how it works, what your responsibility for payment is, and what fees may be associated with it.
Hope this was helpful Alli
FINANCIAL GOALS
One of the best money management skills is the ability to set — and stick to — financial goals. This could be anything from spending, to having enough money to retire comfortably. Without set goals in mind, you’ll just be flying by the seat of your pants. Rarely does that work in your favor. Goals can also be small and simple. For example, setting aside $50 a month in an emergency fund for unexpected expenses. Having achievable money goals is never a bad idea as you’ll always have something that you’re working toward.
DEBIT VS CREDIT
When you use a debit card, the funds for the amount of your purchase are taken from your checking account almost instantly. When you use a credit card, the amount will be charged to your line of credit, meaning you will pay the bill at a later date, which also gives you more time to pay.
It’s easy to get confused between debit and credit cards. Both carry the logo of a major credit card company, such as Visa or Mastercard, and can be used at most retailers to purchase goods and services. The key difference between the 2 types of cards is where the money is taken from after a purchase is made. When you use a debit card, the money comes directly from your checking account. When you use a credit card, the purchase is charged to a line of credit that you are billed for later.
How the cards are managed and the fees you can incur all vary but stem from this difference. No matter what type of card you choose, it’s important to understand how it works, what your responsibility for payment is, and what fees may be associated with it.
Hope this was helpful Alli
Thank You Tianna. Alone we can do so little; together we can do so much.
Doc Frick
david kirk
Retired Computing Manager
472
Answers
Syracuse, New York
Updated
david’s Answer
Hi, Alli, congratulations on your job! That's super news . I will limit my comments to budgeting, as that is likely what should be your first priority.My suggestions:
- figure what your take-home pay will be first, not your gross income. There may be deductions for health care or whatever, plus income tax deduction,
- now, figure out all your day-to-day expenses and try to be realistic. That should include food, transportation, rent, utilities, clothing, personal items such as hair care, and write it all down. Review again to be realistic. You probably won't be because this is new, but you can adjust after a couple of months.
- get a credit card, but use it ONLY for convenience. Plan to pay in full every month. Once you start using it to borrow for the future, you could end up owing far more than whatever you earn can pay back. This is very tempting, but be careful. Using the credit card can be helpful, as it builds your credit rating for when you do need it.
- if you do buy something on credit, such as furniture or a car, revisit your budget to make that part of the monthly expense
- once you have full list of anticipated expenses, compare that to your estimated take-home pay. What is left is what you have to spend or to put into a savings account. That remaining amount is what you have left for entertaining or other personal activities.
- you will get better at this over time, but my main point in this is to assist you in grasping that much of what you earn is already 'spent', in that you routinely have costs (such as food) that have to be paid for. Good luck to you.
-
- figure what your take-home pay will be first, not your gross income. There may be deductions for health care or whatever, plus income tax deduction,
- now, figure out all your day-to-day expenses and try to be realistic. That should include food, transportation, rent, utilities, clothing, personal items such as hair care, and write it all down. Review again to be realistic. You probably won't be because this is new, but you can adjust after a couple of months.
- get a credit card, but use it ONLY for convenience. Plan to pay in full every month. Once you start using it to borrow for the future, you could end up owing far more than whatever you earn can pay back. This is very tempting, but be careful. Using the credit card can be helpful, as it builds your credit rating for when you do need it.
- if you do buy something on credit, such as furniture or a car, revisit your budget to make that part of the monthly expense
- once you have full list of anticipated expenses, compare that to your estimated take-home pay. What is left is what you have to spend or to put into a savings account. That remaining amount is what you have left for entertaining or other personal activities.
- you will get better at this over time, but my main point in this is to assist you in grasping that much of what you earn is already 'spent', in that you routinely have costs (such as food) that have to be paid for. Good luck to you.
-
Lindsay Carden
Residential Mortgage Originations
1
Answer
Ossining, New York
Updated
Lindsay’s Answer
I work for a bank, and on our homepage, we have a Financial Literacy Modules that I have used with various youth groups and young adults in my area, and they have found it very helpful.
Go to PCSB.com, and on the top right, you will see the category Financial Education. This will redirect you to a third-party site – EverFi.
There are a variety of topics that help you plan the immediate and the future. It’s all free!!
Enjoy !!
Go to PCSB.com, and on the top right, you will see the category Financial Education. This will redirect you to a third-party site – EverFi.
There are a variety of topics that help you plan the immediate and the future. It’s all free!!
Enjoy !!
Tammy Laframboise
Present pension and financial planning information to members of a pension
41
Answers
Toronto, Ontario, Canada
Updated
Tammy’s Answer
The library is a great source of books at all levels about money and finances. There are excellent books for young people that take you step by step through concepts that you need to know. The "Dummy" series of books is good. Do not feel you must read the books cover to cover in a short period of time. For instance, you may not be interested in the concept of investing or insurance at this minute but you are interested in banking. Use the books as a resource to seek the information that is relevant to your needs at this time.
Once you have some knowledge that you have gained from your reading, ask the adults around you specific questions. For example, what is the one thing they do that makes them successful at taking their of their finances? or, What is the one thing they wish they had known when they started to earn money? or, What was their biggest money mistake?
Best of luck!
Once you have some knowledge that you have gained from your reading, ask the adults around you specific questions. For example, what is the one thing they do that makes them successful at taking their of their finances? or, What is the one thing they wish they had known when they started to earn money? or, What was their biggest money mistake?
Best of luck!
Joshua Miller
Analyst & Money Coach
10
Answers
Berkley, Michigan
Updated
Joshua’s Answer
To improve your financial literacy and build a successful and intentional life, follow these actionable steps:
1. Learn how to create and stick to a budget to manage your finances efficiently.
2. Focus on managing expenses related to the "big 3" items: housing, vehicles, and food.
a. Allocate no more than 30% of your gross income for housing expenses, such as rent or mortgage and maintenance.
b. Invest in slightly used, high-quality vehicles and maintain them for at least 10 years to save on total cost of ownership.
c. Plan your meals ahead of time and do meal prep to save money on groceries.
3. Enhance your financial literacy by engaging with podcasts, books, and online materials.
a. Listen to ChooseFI podcast for insightful discussions on personal finance.
b. Enroll in the free ChooseFI Foundation course for a structured learning experience.
c. Borrow these recommended books from your local library:
- I Will Teach You To Be Rich
- Your Money or Your Life
- The Simple Path To Wealth
- Rich Dad Poor Dad
- 4 Hour Work Week
- Everyday Millionaires
By gaining financial literacy and making more informed decisions about your money, you will be well on your way to achieving long-term financial success.
1. Learn how to create and stick to a budget to manage your finances efficiently.
2. Focus on managing expenses related to the "big 3" items: housing, vehicles, and food.
a. Allocate no more than 30% of your gross income for housing expenses, such as rent or mortgage and maintenance.
b. Invest in slightly used, high-quality vehicles and maintain them for at least 10 years to save on total cost of ownership.
c. Plan your meals ahead of time and do meal prep to save money on groceries.
3. Enhance your financial literacy by engaging with podcasts, books, and online materials.
a. Listen to ChooseFI podcast for insightful discussions on personal finance.
b. Enroll in the free ChooseFI Foundation course for a structured learning experience.
c. Borrow these recommended books from your local library:
- I Will Teach You To Be Rich
- Your Money or Your Life
- The Simple Path To Wealth
- Rich Dad Poor Dad
- 4 Hour Work Week
- Everyday Millionaires
By gaining financial literacy and making more informed decisions about your money, you will be well on your way to achieving long-term financial success.
Dan Albis
Data Analytics and Visualizations- Business Intelligence
1
Answer
Branford, Connecticut
Updated
Dan’s Answer
There are a lot of helpful personal finance books out there that will give you a great foundation to managing your money. I read "I will teach you to be Rich" coming out of college and it gave me a solid foundation. From there, it should be a continuous learning journey through other books and podcasts. Definitely study the benefits of investing in low cost total stock market index funds and the value of compounding growth vs. only putting money in a saving account. My regret was not starting to invest earlier.