Smart Money: Resources

A loan is the borrowed money (principal) from a lender and you agree to repay it with interest. Your credit score affects your eligibility and interest rate. Look around! Compare loan rates to find the best deal. Don't rush! Carefully read the loan agreement. It might have hidden fees and details of your obligations and rights. Remember, it's a legally binding contract!

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Learn more about personal and student loans!

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Investing is like giving your cash a chance to grow! It's putting your money to buy assets like stocks, bonds, or mutual funds. Investing leads to building wealth, potentially beating inflation, and generating passive income.

Some investment options include a CD (certificate of deposit), where you lock up your money for a set period to earn a guaranteed interest rate. and retirement accounts like 401ks and Roths, which offer tax benefits. Remember, saving is crucial for short-term needs, but investing helps your money blossom for the long haul!

Why invest early?

Because of compound interest, it's important to invest early.

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Taxes are required amounts of money that individuals pay to the federal government every year. This money is used by the government to fund public services such as schools, buses, and parks that benefit the community.

The three basic tax types are taxes on what you earn (ex: income tax, payroll tax), taxes on what you buy (ex: sales tax, excise tax), and taxes on what you own (ex: property tax, estate tax).

Intro to Taxes

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Three Basic Tax Types

Tax Foundation

Busting the Confustion

Freethink

Insurance is a contract in which an individual pays installments to an insurance company in exchange for financial protection in case of an emergency or extraneous situation. In short, a contract with an insurance company protects one from possible future financial disasters. If you become sick but have health insurance, your health insurance will cover the majority of your hospital bill.

There are so many different kinds of insurance: life insurance, car insurance, health insurance, home insurance, the list goes on! Furthermore, it's crucial to research and compare different insurance companies to find the one that best suits your specific needs and budget.

How does insurance work?

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Insurance Terminology

Khan Academy

Types of Insurance

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Saving and budgeting are important for managing money and obtaining financial success. A budget plan can guide you how to spend money in appropriate setting and amounts. Furthermore, budgeting distributes your income into needs, wants, and future goals. It helps you track spending and find areas to save. Saving is putting that extra money aside for those goals.

The 50/30/20 rule was created by Senator Elizabeth Warren. The rule consists that 50% allocated to needs (i.e. rent, food, healthcare), 30% to wants (i.e. travel, entertainment), and 20% towards savings/debt. (i.e. retirement, student loans).

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Credit is your reputation as a borrower. It's based on your history of paying back loans and bills on time. The better your credit score, the easier it is to get loans and the lower the interest rates you'll pay. Building credit takes time.

Start with a secured credit card or become an authorized user on someone's account with good credit. It’s important to always make your payments on time. Over time, you'll build a strong credit score and unlock a world of financial opportunities!