Money for beginners. Even after going to college and taking way more finance classes than you'd like, you may not totally be sure what all those financial terms.

Money for beginners

Beginners Guide to Making Money in Stardew Valley!

Money for beginners. Even after going to college and taking way more finance classes than you'd like, you may not totally be sure what all those financial terms.

Money for beginners


How you manage, spend, and invest your money can have a profound impact on your life, yet very few schools teach these important skills. Learning financial savvy can take a while, but the basics are fairly simple and never change. You were probably taught some basic math growing up, but too many people make it all the way to adulthood without ever learning basic money management. Skills like creating a budget, investing for the future, or even how credit cards work are startlingly rare skills.

Managing your finances feels like nothing but a lot of paperwork and numbers. You make X amount of dollars, you spend Y amount, and you try to make sure Y is less than X. However, your finances are just as much about psychology, habits, and the values you choose to live by. Put another way, your mindset matters just as much as the math.

Beneath all the software and the budgets, there are a few rules that will always help improve your financial life:. What your grandparents did may not work for you.

There will always be newer, better tools to manage your money. However, spending less than you earn will always be beneficial. Investing your money will always be better than doing nothing with it. And planning for the future will always be better than blowing your paycheck as soon as you get it.

Setting up a bank account is easy. Choosing a bank is tougher. Picking a bank means finding an institution that has the services you need with the fewest fees. While some banks charge monthly fees or require you to have a minimum balance, there are plenty of banks that are worthwhile without either of these requirements. Chances are, most adults in your life have recommendations on which bank they prefer. NerdWallet also has a great online tool here that compares checking accounts from a variety of banks.

Of course, keep in mind that not every bank has physical branches. Some banks— like Simple , Ally , or Capital One —are online-only. These often come with certain trade-offs like, you know, not having physical branches , but many offer fewer fees and better services. You can check with the bank you want for specifics. Here are some more resources to help you figure out what to look for and make the best choice:. Do you know where your money goes, or does it kind of just disappear from your account?

Getting into the habit of categorizing your bills and tracking your expenses will help prevent a lot of financial problems before they start. Start by calculating how much money you make in a month. If you get paid hourly, multiply your wage by the typical number of hours you work each month.

Then, write down all of your regular expenses. This includes recurring costs like your rent or mortgage, utilities, car payments, and and so on. For more complex things like food, you may need to track what you spend over time. Then, keep track of all your expenses for the next month or two. Ideally, the amount you spend in a month should be lower than the amount you earn. If you have to, cut ruthlessly.

For some, it may be as easy as cutting those lattes, but for others, you may have some big decisions to make—li ke whether you can afford to live in that expensive city. Once you get the hang of tracking your expenses, you can try using a service like Mint to manage it for you.

There are a few different philosophies here. Some people prefer to have a very detailed transaction history with strict allotments for expenses like food, clothing, and entertainment.

Instead, Sethi suggests dividing your money into four categories:. Ultimately, budgeting just means knowing where your money is going and planning ahead. The more you can save, the better! Here are some more resources to check out:. However, credit cards can also be really useful—when used correctly. In fact, they may even give you rewards for doing so. Worse yet, you have to pay the interest first or else your balance will just get higher.

If you only pay the minimum amount due, most of your payment will go towards interest. This means your balance will remain high, and keep generating interest. We break down the math in more detail here , but the gist is, only paying the minimum amount due is the worst thing you can do.

Well, when used properly, there are a few key benefits:. Try not to think of them like extra cash. If you can learn to use credit cards responsibly, they can be immensely useful. You can find out more about how to use your credit card effectively without ruining your budget here:. Credit cards are also useful for improving your credit score.

In some cases, your credit score may even be used by landlords to determine whether or not you can rent an apartment in certain complexes. In other words, your credit score can have a profound impact on your life. There are three major nationwide credit agencies that are typically used to gauge your credit.

By law, you are allowed to pull your own credit report from one of the three agencies once every twelve months without it affecting your credit record. Paying your utilities on time will also help build your credit. Credit reporting agencies will grade you a variety of factors.

The exact math depends on the agency, but generally speaking, there are five main areas that affect your credit score:. Much like indoor plumbing, it usually only becomes a headache when something goes wrong. Though in some cases, that may involve waiting until some negative marks fall off your record after several years. In most cases, the best thing you can do for your credit score is to start paying down debt and make payments on time.

Check out these resources to understand help understand your credit score, resolve disputes, and manage your credit over time. Now comes the next part: Maybe it seems too far away to matter, or maybe it feels impossible and overwhelming. To start with, you remember those sections in your budget that you made earlier called Savings and Investments?

Start by saving saving those automatically. If your employer uses direct deposit which means your money goes directly to your bank account, rather than giving you a check you can cash , you can ask to have a portion of your pay sent to multiple accounts. The money you never have access to is the easiest to save. Having your money in a savings account will help you save for little things, like your emergency fund or a new computer.

But your real, long-term savings are going toward something far more important: This is how you save enough to retire one day. It will then automatically pick which companies or industries to invest in. If you want to get more hands on, we detail more tools for managing your investments here.

Long-term investments can also come from your employer. Many companies offer k s that you can fund with money deducted from your paycheck before taxes. Investing is an overwhelming area of finance, so start small and learn what you can. Here are some resources you can use to learn more about how to properly invest your money:. Illustration by Sam Woolley. More from our network. Kinja is in read-only mode. We are working to restore service.


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