Did you know the month of April is Financial Literacy Month? What’s your definition of financial success? Everyone has their own financial goals and needs and it’s not always easy to stick with a financial plan. However have no fear, we are here to give you some tips and tricks on everything financial.
To Kick Things Off, Let’s Dive Into 3 Steps to Achieve Financial Success.
- Start an emergency fund. You never know what unexpected events life will throw your way, starting an emergency fund will aid some of those bumps in the road we all encounter. Just saving a small amount from your paycheck each pay period will help build an emergency fund.
- Spend less than you earn. This is easier said than done. Many people spend more than they make and live beyond their means.
- Pay off debt. It’s time to get out of debt! You can start paying your debt off today. Paying debt from the smallest to the largest amount will help you plan ahead for how much you need to get out of debt.
Speaking of debt, college years can be costly for students. With the freedom of college, managing your money can be a challenge.
What Are Some Money Mishaps That You Will Want to Avoid?
- Credit Card Debt. Credit cards are convenient, especially in today’s society. They are appealing to college students because who doesn’t love the idea of buying something now and paying for it later? This is a slippery slope because credit card debt can build quickly.
- Abuse of Student Loans. Students often find themselves in trouble with loans especially when taking out loans to pay for everything.
- Staying in school too long. Going back to grad school can pay off in the long run however this can cause a major increase in the amount of debt, making it harder to deal with after college. Students should plan ahead for after grad school and how they are going to pay off the debt.
- Not protecting financial information. Students often think nothing of sharing their credit cards with friends and logging into bank accounts on public computers available to them. Students need to take precaution to ensure that their financial information stays safe.
- Using retirement funds to pay for college. It is not recommended to cash in IRAs or other tax deferred retirement savings to pay for college. Interested in learning more? Check out the 5 Worst Money Mistakes You Can Make In College.
Let’s dive deeper into credit cards and discuss the pros and cons of credit cards. Credit cards are great for establishing credit however, they also include hidden fees that can ruin your credit if used incorrectly. If you are trying to decide whether to get a credit card or nix credit cards altogether, check out these pros and cons first.
Pros of Credit Cards:
- Ability to pay installments. You have the ability to make payments each month instead of the paying the balance due.
- Credit boost. Making payments on time helps build a good credit score.
- Funding for emergencies. Having a credit card allows you to pay for an emergency immediately.
- No need to carry cash. In today’s society, most places accept credit cards so it cuts down on the wait time at the ATM.
Cons of Credit Cards:
- Temptation to spend more than you can afford. Credit cards are so easy to use that it is easy to run up a big balance.
- Fees and interest. If you don’t read the fine print, fees and interest can go up in a hurry.
- Potential for debt. Each time you use your credit card, you are creating debt.
- Misuse can ruin your credit score. If you don’t make your payment on time and have a big balance this can ruin your credit.
What Is My Credit Card IQ?
Whether you have a credit card or not, what is your credit card IQ? You can find out by taking this short quiz. As you can see, credit cards have some positive and negative aspects. Whether you are debating getting a credit card or already have one be sure to check out all of your options.
Credit cards and debt can be dangerous, so you should always make sure you’re being responsible with your money. While this isn’t a complete guide to financial success, these are some easy tips and tricks to follow.
Looking for another blog post? Check out other posts right here on the DCCCD blog