School Will Not Teach You These 7 Rules That Will Change Your Personal Finances. Number 6 Will Interest You.
In most schools what we learn about finances is either Credit, investing and money management. And to most people this knowledge is pointless because it didn’t matter a lot to them. Therefore, when people graduated they become disappointed because most of the information they gather are not useful to them.
One of the popular advice that school will give you is to study hard, graduate and get a good job. Unfortunately, this is not as easy as it seems. Schools don’t give you what you need for success in life. School doesn’t give you more about personal finance which is the bedrock of success.
In this article, we will discuss the rules about personal finance that you weren’t thought in school. So without further ado here are 7 personal finances you should get to know.
In school you were thought to save 10% of your income, but in reality 10% won’t be ok for retirement, except of course you are earning millions. For those with a regular pay cheque it is advisable to save 25-40% of your income
It doesn’t mean that saving 10% is useless. It just means you won’t go far saving that little. So, in other to save more you have to reduce your cost of expenses. Instead of buying lunch outside everyday it will be nice to cut down on your eating outside and trying another alternative.
2. Emergency fund
Most people haven’t heard of emergency funds. Schools don’t teach about having emergency funds. It is estimated that about 40% of Americans don’t have emergency funds. These are fund that cover up of emergency. These funds should be nothing less than 6months. The reason for emergency fund is if you lost your job today do you have funds that will cover for 6months before been on your feet.
3. Budgeting your money.
Many people have not been thought about the basic of budgeting. And this is a critical factor that will help you reduce the amount of money that goes out of your pocket.
Not knowing the basic of budget will be of great disadvantage to you immediately after school.
A simple way to budget is to get an envelope and then write the different bills that will be allocated your money too. By this way when the money in the envelop finishes then you will be able to know that you have finish spending.
4. Power of Compound Interest
Another thing that you are not thought in school is the power of compound interest. This is one of the power tools that the youth can use.
One of the advantage of the young over other people is the time that they have. Young people can amass a lot of money by setting aside some amount of money with a high interest account that will last for a period of time.
A good example is that when a person gives you two options to choose from having N30,000 or N1 that will double every day. Most people will go for the first choice of N30,000 but in reality the 2nd option is worth it because it will compound to about 10million after 30days. That’s the power of compounding interest.
5. The Importance Of Positive Credit.
This is something that will never be taught in school. Many people have been disabused about collecting credit. this have made many not interested about getting into positive credit.
There are good credit and there is bad credit. Good credit is the loan you collect from a financial institution so that you can improve your business or go into investment. However, bad investment is the type that people going into to buy or incur liability. Therefore, positive credit should be encouraged because it can be healthy.
6. Guard Your Health
Taking care of your health can save you a lot of money. many people who are sick because of not properly taking care of their body will lose money quickly then that person who takes care of his health. Therefore, it is advisable to take care of your health. Eat right and avoid anything that will cost problem to your health.
Taxes is a broad topic and its mostly not discuss in this part of the country that much. But if you really want to learn about taxes then you should seek professional advice. To this end, I will suggest you look for the best alternative to help out in taxes because these are not taught in schools
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