Skills for Financial Success
Frank A. Clark said it best, “Many folks think they aren’t good at earning money, when what they don’t know is how to use it.” As I read this quote I thought of myself. The money I earn is often gone quickly. Knowing how to use money is an important skill to have in life. Without those skills people often struggle to make ends meet.
Managing money with apps is the easiest way to do that today. Using the app from my bank account is a great way to track how much money I currently have. Budgeting apps are also really useful because I can track how much income I have and what I am spending. With this I can set limits for myself and prevent myself from overspending. These apps also help me figure out what my fixed expenses are, like rent, phone bill and a car. Once I start getting paychecks I will use budgeting apps to track my income and spending.
If I have a long term goal for example buying a car, setting up automatic transfers from my checking account to my savings account is an easy way to save up money without thinking about it. Doing this can help me form a good habit of spending less since part of my money is being put away. Looking at how much money I have before I spend it is a good habit to have to prevent from overdrawing my checking account or getting hit with fees for spending money I don’t have. I will start making automatic transfers to my savings account to save up for a car.
Having a credit card is a good way to build good credit, as long as I am on top of my monthly payments and don’t abuse it. Another way to build good credit is if I have student loans and treat them the same as a credit card. A good credit score shows how responsible I am to other people. It is also important to have when I want to finance a car or take out a loan. The better my credit score is the lower the interest rate I will have to pay when financing items. If I ever find myself in debt, I will pay the minimum monthly payment on each card or loan. I will pay more than the minimum on the ones with higher interest rates. Doing this will help me reduce how much money I owe faster. I will be getting a student credit card once I start college to start building credit. I will make sure to use it responsibly and make my monthly payments to avoid going into debt.
Setting up an emergency fund as soon as possible is a great way to prepare in case something unexpected arises. Some examples of situations when an emergency fund can really help are if I become unemployed, sustain unexpected health issues, or experience car problems. Setting up an emergency fund is as easy as setting up a second savings account. The money in this second account will only be used to help in case of an emergency. A good amount to have in this fund is the amount of money I need to survive for three to six months. I will be setting an emergency fund as soon as I start earning paychecks.
Knowing how to use your money is an important skill to have in life, without these skills people often have a difficult time making ends meet. Using the skills I have learned I will become more financially stable, be able to enjoy my wants and make big purchases. I will also have something to fall back on in case unexpected things come up. I will be making the changes to become more successful, will you?