Financial Stages of Life

Guess Who

High School

So you're in high school, starting to take steps into the real world. You might be thinking about getting a car, or a checking account, or a credit card, or have some other financial goal in mind. Before you can do these things, however, you're going to need some knowledge about how you can make them happen without getting yourself into serious debt.
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Bank Accounts and Credit Cards

If you want to open a bank account, you should know that the different types of accounts have different levels of liquidity and can have different requirements for balance. Certain checking and savings accounts can have a requirement for a minimum balance, and if you go under the minimum balance you can be charged a fine. The most liquid type of bank account is a checking account, because the money is easily moved to and from the account. Savings accounts are less liquid, as it can be harder for money to move in and out of the account. If you want to get a credit card, youshou!d know how it works. Credit cards are like borrowing, and you'll have to pay back what you borrowed eventually. At the end of every month, you have to pay at least a minimum amount for the card, but the remaining balance is charged interest, so the debt on the card increases. Since this is the case, it is better to pay off the full balance each month so you don't become immersed in debt.

Loans and Credit Score

Since you're probably going off to college in a few years, you're probably going to need a loan to help pay for it. The different types of loans, such as installment and balloon payment, have different plans for paying them off, but you will be paying back at least the amount you borrowed over time. The longer you take to pay off the loan, the more you're actually paying due to the way interest is charged on the unpaid balance of the loan. A factor that could cause you to be denied a loan is your credit score. A credit score is a measure of how likely you are to pay back money that you borrow. Since you haven't had many chances to build your credit score, you haven't had many chances to prove your credibility. One way you can start to build your credit score is by taking out a small loan and investing it in your savings account, then making on-time payments from the money in the account.

Paying Bills and Using Bank Account

First, you’ll want to ensure that you have the basics: a roof over your head, transportation to work, electricity, water and groceries. Then look at the bills you have been paying and decide if some expenses can be eliminated, at least temporarily. Examples are cable, subscriptions and other non-essential items. If you have federal student loans, you can investigate deferment so that you don’t have to make payments until you have some financial breathing room.

Car and Education Loans and Debts

If you can buy a perfectly good used car and borrow less, or buy a car without a loan, that’s ideal. But if you're going to go into debt when you buy an automobile, try not to get stuck in alengthy loan. Falling behind on student loan payments can lead to some dire scenarios, such as having your wages garnished. But even that's still arguably better than having your house foreclosed or car repossessed. In most cases, if you have an extra thousand dollars, you're better off using it to pay down your revolving credit card debt than putting it toward student loans.

Start Saving and Investing

A good first step toward saving is to open a savings account at a bank or credit union. With a savings account, you can save money on check cashing fees and money orders. Take advantage of compound interest, with no risk. Keep your money safer than in your pocket or at home. Once you have a good savings foundation, you may want to diversify your assets among different types of investments. Diversification can help smooth out potential ups and downs of your investment returns. Investing is not a get-rich-quick scheme. Smart investors take a long-term view, putting money into investments regularly and keeping it invested for five, 10, 15, 20 or more years.

Build and Protect Credit Score

One alternative way of boosting your rating is taking out store cards or credit cards, using them and paying off the balances on a regular basis. Opening a variety of accounts will speed up the process, but be sure to clear balances regularly to avoid sky high interest charges. And don't fall in to the trap of missing payments and thereby making your situation worse. All is not lost if your rating is poor - although it may take time to repair. Bankruptcy details remain on people's ratings for up to six years, but for most minor problems it should take a year of good credit habits to return a rating to health.

Young Middle Aged Adults

Young adults with living expenses should understand that credit has its pros and its con when you use credit it should be on something you need not something you want. if you want something just wait til you have the money saved to buy it DO NOT USE CREDIT. Only use credit when you have the money to pay the bill when you recieve.

Staying out of debt is not as easy but im sure you can do it , try not to use credit cards. If you have savings if you do go in debt use some of your savings to pay some of that off.

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Loans (Young Adults)

If you have loans pay the off, use a monthly payment system.