$159 billion. That’s what market researchers say teens spent in 2005. If you’re one of those free-spending teens, do you know what you bought with that money? Do you know how to develop a budget, handle money from a job, and balance a check book?
As you move into adult life, financial literacy is a must. Here are strategies to get you started.
- Keep and use only one or two credit cards.
- Keep spending in check by using a credit card with a low limit or a prepaid card.
- Pay off all charges every month.
Savings and Investments
- Compare fees and interest rates before you open investment accounts.
- Set aside six months of living expenses in a “rainy day” savings account or a certificate of deposit.
- Sign up for automatic investments with a low cost mutual fund. Even $50 a month adds up over time.
- Shop ’til you drop for the best terms and interest rates. Compare banks, credit unions and in-store financing.
- Larger down payments reduce the total finance charges you pay. Making extra payments has the same effect.
- To avoid borrowing entirely, set aside a specific amount each month in a savings account to finance your needs or wants.
- Take a course in personal money management. Understanding and directing your own financial affairs is empowering.