Most adults would agree that many of the valuable money lessons learned over the years were learned the hard way, from real life experiences and costly mistakes. Financial planning, budgeting, saving and investing are things that you generally don’t have to worry about until after you graduate. But the harsh reality for most is that on the other side of that diploma is debt, and years of money problems to follow if you’re not financially responsible.
Here’s a list of 8 things you probably didn’t learn about money in high school that will help you become a more financially savvy adult:
How To Set Financial Goals – Setting long term and short term financial goals will help you achieve what you want most out of life. Grab a pen and paper and unapologetically write down a list of things you want and deserve. Your financial goals should be Specific, Measurable, Attainable, Realistic, and Timely (SMART). What do I want? A new house. When do I want to move in? In 12 months. How much does it cost? $300,000. How much is my down payment? 10% Be as specific as possible with your goal setting and do all of the research necessary to be able to plan ahead financially, especially with large purchases.
How To Diversify Your Income – You should never depend on just one income source. Diversifying your income is almost necessary in today’s economy. You can have a great job, making good money, but it doesn’t hurt to have a plan B because the truth is, there is no such thing as job security. Here’s a great list of side jobs that are not only great ways to supplement your income, but also have the convenience of being home-based.
How To Calculate Your Net Worth – Net worth isn’t commonly thought about because the majority of the population is so busy focused on working income and living check to check. However, tracking your net worth is critical in order to achieve financial success because it shows you a snapshot of the bigger picture. To track your net worth, subtract your liabilities from your assets.
How To Create A Budget – A monthly budget is important for everyone, especially those who trying to meet financial goals. To create a monthly budget, list all of your income for the month on a piece of paper and subtract your expenses and your savings (line by line). This will be a great help if there are things that you are thinking of buying for yourself. For example, you might be thinking of getting yourself a new memory foam mattress, but the only way to do this is by creating a budget.
How To Pay Off Debt The Smart Way – Part of financial freedom is being debt free. If you can afford to double up on your loan payments, by all means do so! Pay off those debts with the highest interest rates first, stop maxing out your credit cards and get those student loans under control!
Why You Should Start An Emergency Fund – An emergency fund is short term savings account set aside for unexpected emergencies. This is a separate account from your long term savings and should be used for things like car repairs, job lay off, family illness, etc.
How To Save For Retirement – If you’re reading this and you’re in your 20’s or 30’s you probably think this section isn’t for you but if you start investing for retirement now, you will earn much more money on your investment over time because of compound interest. Talk with a financial planner and decide which account is best for you, 401k, IRA, or Roth IRA. If you work for someone else be sure to check with your employer to see if they will match any of your retirement investing.
How To Make Smarter Investments – When you’re ready, after you’ve cleared your debt, met your financial goals and set aside some money in your savings account, you may want to look into the various ways to invest your money. Keep in mind that any investment comes with risks, so you want to make sure you can afford these risks. Whether you plan to invest in the stock market, real estate, gold, forex, start your own business or invest in someone else’s be sure to do your homework thoroughly, there is a lot of money to be made with any of these options but be sure to invest wisely.