Ever notice how when what you believe shows up in print you accept the writer as smart, if not brilliant? Well that just happened to me yesterday while reading my Sunday paper. The author Ann Carnns touted taking a financial literacy course as an elective in college. Her take was similar to what I’ve espoused for years. I thought it should be mandatory for high school seniors! If you wait until college then all the worst can be avoided from the get-go. The trouble starts when offers come in for credit cards and the pitfalls of owning one are not understood. There are of course more fundamental concepts that must be learned even before the credit card scenario.
I have through my blogs and the Mathmatecum itself tried to direct my missives to the least fortunate among us both socially and financially. Personal finance has become an imperative in today’s society. Concepts like money management are basic to all and should not be left to common sense and rules of thumb. Getting ones first job (whether part time or full time) starts the ball rolling and provides the impetus for learning about money. In today’s environment when you first get paid you are generally paid by a physical check or money is sent to a designated bank account. First bank accounts are either checking or savings accounts. Here are where choices must be made and understood. First you must know about what accounts cost if anything and whether they have minimum balance requirements. All savings accounts should pay interest on monies on deposit and some checking accounts do likewise, these of course are the best. Passive income is not only wonderful but something that should be sought out. A reminder here that the Mathmatecum provides a lifetime of passive income simply by becoming a member and paying a onetime fee!
How and why one should save are very important. I believe that when one starts on life’s economic journey with every source of income a percentage should be set aside. The least amounts earned should see a minimum of one dollar being placed into savings and when working full time, a minimum of one hour wage should find its way into savings. As time passes this amount should be 10% of ALL income. If you become increasingly affluent then the plan should be 20% of ALL income. Of course, hopefully one can earn more than one needs! Saving begets the need to learn about investing and what stocks and bonds are all about. One of the better long-term devices for saving and earning are I-bonds that can be purchased from the U.S. Treasury directly without any fees in multiples of $25 minimums.
JAI BABA
TTFN
JU
