It’s graduation season which presents an excellent opportunity to revisit essential financial fundamentals that benefit both recent graduates and families. Take the time to review these money basics to establish a strong financial foundation:
Your net worth equals everything you own minus everything you owe others. For young graduates, this number will likely be negative due to debts, which is okay. The key is to set a goal to improve it each year.
Learn about the basics of Social Security, Medicare, 401(k), and common withholdings.
Review your accounts to watch for errors or fraud, avoid overdraft fees, and know how your debit and credit cards work.
It is easy to burden yourself under a pile of credit card debt. Credit card companies love when you carry a balance, but paying less than the full balance each month can stretch your debt for years.
Create a budget to understand everyday expenses such as food, transportation, utilities, insurance, taxes, rent, and medical expenses.
Remember, your most valuable asset is you! Invest in things that make you more employable and provide greater lifelong income earning potential.
The world of money and finance can seem overly complicated. So, keep asking questions and seek advice until you fully understand the mechanics of money and how it impacts your situation. You’ll be amazed at how powerful that feeling can be!
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