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top ten personal finance rules you won't
learn in school what did you learn about
personal finance in college credit
investing money management or did you
only take the courses that were
mandatory for you to graduate well for
most people these classes were more or
less pointless just like calculus
astronomy and anthropology the longer
I've been out of college the more
disappointed I am about how much
information was not included throughout
my studies the world tells us to go get
educated get a job and all will be well
but unfortunately it's not that simple
for you to succeed in the world you need
to know a lot more about money than what
school will ever give you personal
finance forms the backbone for all
success stories to save you from the
hustle and bustle of having to learn
from your mistakes our team of experts
have compiled a list of 10 most
important rules that everyone should
abide by to be ahead of the game with
their finances grab a pen and paper here
are ten of the most important personal
financial rules you will never learn in
school before we start why don't you hit
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of our videos let's begin
tin buying your first home you probably
heard of the popular statement if you
want to buy a home you have to save up
to 20% of the value for down payment if
you don't you'll be forced to pay
private mortgage insurance which could
really dent your account what you won't
learn in school is that while higher
mortgage payments may be painful the
financial trade-off between paying more
money now and waiting to save up the 20%
deposit could be worthwhile when we look
at the macroeconomic factors in the US
over the past decade the appreciation
rate of real estate has really gone up
but the wage levels have remained
stagnant so it makes it unrealistic to
start saving up 20% of the home value as
it will only increase drastically over
the years the rule behind this is if you
have the capacity to save the money
within at least five years comfortably
then go for it but if it will take you
longer you'll be chasing a moving target
as the price increases 9 save save save
in school they'll teach you to have at
least 10% of your income but let's be
honest here this isn't enough to retire
on well unless you're earning millions
for most of us with a regular paycheck a
decent savings percentage will be about
25 to 40 percent we're not saying 10% is
entirely useless it could be a great
starting point to build that savings
muscle in order to save more reduce your
expenses and unnecessary costs instead
of buying that cup of coffee every
morning put that money in a savings
account with a better interest rate
eight emergency fund you may have never
heard of an emergency fund from school
but you're lucky you have us to teach
you about it recent statistics show that
up to 40% of Americans don't have the
funds to cover an emergency of $400 this
is an alarming statistic that only shows
how people disregard the importance of
an emergency fund what if you lost your
job today would you have enough money to
cover your costs the golden rule is to
have six months of expenses saved up
somewhere but we suggest that if you can
make it more the better
seven budgeting basics budgeting is
quite important in life yet you won't
hear anything about it in school sadly
not understanding the basics of
budgeting while in school can leave you
a disadvantage right after graduating
especially once you move out not having
knowledge of how to manage bills and
create the distinction between once and
needs can lead to one enduring one
hardship after the other everyone needs
to know how to plan a lifestyle that is
financed by earned income this includes
understanding how to plan for all bills
but still ensuring there's enough left
for necessities such as groceries and
savings but let's face it as much as
budgeting is important no one really
likes tracking every single penny they
use what you can do instead is what we
refer to as tactical budgeting this
involves creating budgets and plans over
a long period of time for example you
can identify what you need every month
and create a budget with the needs once
and respective costs over the next six
months from the plan created you can
then separate the amounts into different
accounts to ensure you don't spend over
your budget then occasionally you can
refer to your list to stay on track six
compound interest the power of compound
interest is possibly the best kept
secret the one thing every young person
has an advantage over everyone else's
time while they may not achieve their
financial goals instantly they have an
upper hand when it comes to investing
all they need to do is tap into the
powers of compound interest by setting
aside small chunks of money and a high
end
to count young people can amass great
wealth that will compound over and over
again through the years to show you just
how important compound interest is
here's a great example if someone gave
you two options the first choice is
$3,000 and the second is a penny that
doubles up in value every other day most
people would choose the first choice
right you probably did too but if you do
the math but if you do the math the
second choice would be worth 10 million
dollars after 30 days only if that's not
enough to convince you to start taking
advantage of this incredible opportunity
to grow your wealth then I don't know
what will be five secrets of credit most
young people right after getting their
first credit cards end up maxing them
out they then end up with a life full of
debt where they're forced to pay up huge
chunks of interest rates and in some
cases this results in late payments that
could adversely affect them what most
people don't know is the importance of
credit scores and maintaining a great
credit history but they would probably
be aware of the secrets if schools paid
more attention to training them on this
life skill here's what you need to know
your credit score is one of the most
important parts of your financial health
and it generally determines your
financial position as an adult with the
proper score it's a lot easier to
purchase a house get a car get a
business loan and makes it much easier
to achieve other milestones in the
future we can no longer ignore the
importance of credit everyone needs to
know how to build credit and have a
proper score all the time
here are a few pointers on how to
achieve this one get a credit card
most people think getting a credit card
is a mistake but it is actually quite
important in building your credit score
let me give you a good example so I have
a friend called Kevin just like some
people he avoided getting a credit card
for most of his young years after
graduating from school doesn't sound
like a big problem right but when he
started looking for a home to buy and a
car he couldn't get any loan approved
because his credit statement hadn't been
established here's how it works
when you get a credit card and use it
financial institutions record all your
transactions and interest payments based
on your efficiency they'll assign you as
score to your name now when you go
looking for a loan that score will
determine the loan amount you can
receive and the interest rate to always
pay your debt in time there's no other
way around this if money is due today
make sure you pay it today or rules of
insurance if there's anyone who's
depending on you
Angele then you need to get life
insurance this could be your child
spouse or parent it is better to get a
term policy rather than a life one as
you get coverage whenever the need
arises however if no one depends on you
financially in the policy to save on
money in addition to life insurance get
insurance for other aspects and assets
you own this includes your car home
expense assets and health you can also
get umbrella insurance which covers
different policies and guarantees the
discount if obtained from one insurer
take your time to get different rates
and the features available before
choosing a company to insure with three
taxes taxes are such a broad topic that
is hardly ever discussed in school it's
important to understand how they work if
you want to be on the right side of the
law before you get your first paycheck
or make any sales from your business
learn how to calculate the tax rate and
find out how much money you'll be left
with this will help you determine
whether a job offer will meet your
financial needs and what the appropriate
pricing strategy for your products or
services will be luckily there are
plenty of online calculators that will
do the dirty work for you they will show
you the gross pay the amount payable in
tax and the amount left in your account
also known as the take-home pay for
example a salary of $35,000 a year in
Manhattan New York we'll leave you with
about twenty six thousand three hundred
ninety nine dollars after tax deductions
also pay attention to the marginal tax
rate that affects you raise for example
a raise of $35,000 to 41 thousand
dollars a year won't give you an extra
five hundred dollars a month but three
hundred and forty five dollars make a
habit of preparing your tax returns
yourself there's a lot of misinformation
and bad advice out there be careful to
guard your health a hospital visit for
an injury like a fractured knee can cost
thousands of dollars without insurance
if you're finding it hard to meet your
monthly premiums then what will happen
if you end up in the emergency room you
may end up having to borrow money to pay
for your medical bills burdening other
people who had plans with their money
doesn't sound fair right if you don't
have a medical cover get one ASAP also
taking care of your health can end up
saving you a lot of money this involves
eating the right foods maintaining a
healthy weight regularly exercising not
consuming alcohol and other addictive
--zz excessively you don't want to be
sorry
so guard your health today one college
debt isn't 100 percent
necessary contrary to what everyone
believes that student loans go hand in
hand with a college degree you actually
don't need to get one to achieve the
latter eighty-five percent of new
graduates complain of the heavy school
debts and the chunk of money that goes
to paying it off immediately after they
start working it's not always a must
that you get these loans to pursue your
degree some institutions like the
Davidson College in Charlotte help
students so they don't end up in debt
other schools offer great education at a
fraction of the private schools tuition
fee you could also attend school
part-time work as you study enroll in a
more affordable school graduate fast or
begin your journey in a community
college but we're not saying debt free
schooling should be everyone's goal in
some cases it might be worth it if you
are set to launch in a very high-paying
career path then a few thousand dollars
shouldn't get in the way however don't
establish this debt as the main factor
of existing as a college student there
are so many other ways of achieving your
career goals that's it for today we hope
you learned a few things if you're still
here then I bet you enjoyed the video
give it a thumbs up and don't forget to
subscribe if you haven't already we have
regular finance videos that will help
you grow abundantly so stay tuned with
that said I'll see you in the next one
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