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Alright, so. Personal finance is scary, right? There’s so much to know...so many topics, so many opinions, so many strategies. It’s overwhelming. How can you possibly know where to start?
Guess what.
Everyone is asking the same question. Where do you start? Honestly...I don’t think there’s a correct answer.
Don’t focus on where to start; focus on starting.
Okay, awesome advice, Kaitlyn. I still don’t know what I’m doing.
I know!!! It’s difficult to just start. I get it, I really do. So, I am going to give you a starting point!
Here are three basics you can begin focusing on when it comes to your personal finances:
Your Savings
Writing a Check
Applying for a Credit Card
How did I choose these three basics? According to NerdWallet, these are the three areas where Gen Z seems to have the least experience. (https://www.nerdwallet.com/blog/generation-z-money-survey/).
Your Savings
When it comes to saving your money, there are so many different strategies to tackle this. I have actually given you a strategy in the past (check out this link https://www.how2genz.com/post/why-it-s-absolutely-okay-to-spend-50-on-yourself)
Since I already have a good amount of information on this, I won’t go into the different strategies, but I do want to make one thing clear.
Putting money into a savings account is good. It is good to save your money instead of spending it all the time. However, when you use a savings account to store your money, you are missing the opportunity to grow that money, and it is tempting to dig into that money because it is so accessible.
Let’s talk about this for a second. This seems contrary to what you have been taught, right? You have always been told that saving is good. Again it is just that, good, but there is so much more that can be done. Money has the opportunity for growth. In order to grow your money, you need to invest. Trust me, trust me, trust me. When you hear the word “investing”, many may think of stocks immediately, but that is not your only option. Stocks are risky. You are putting money into an individual company where one product could be defective and the stock tanks. Here are some examples of other options: index funds, mutual funds, bonds, and 401ks. There are many others, but these are the most accessible to me as a member of Gen Z. Take a look into these. I will talk more about these in another post, but before then, do your own research. Also, before putting your money into these, make sure you are KNOWLEDGEABLE. The worst thing to do is invest in something you don’t understand. ASK QUESTIONS. DO YOUR RESEARCH.
Anyway, moral of the story, a savings account is okay for your money. Investing is great for your money.
Moving on!
Writing a Check
According to NerdWallet, Gen Z has the least amount of people who have written a check. Honestly this makes sense because everything is digital, but literally today I ran into a situation where I had to write a check.
Here’s how you do it:
The date of which you are writing the check goes in the top right corner.
Whoever you are paying goes here. Make sure their name is spelled correctly. It can be to an individual or an organization. If it’s to an organization, they typically will provide guidance on how to sign the check.
Here is the written form of the amount you are paying. Here, I am paying $2,000.10. To write this, I write Two Thousand and Ten Cents OR Two Thousand and 10/100 (to signify ten cents).
Here is the number form of the amount you are paying, simple.
This is the reason for payment. Say you’re sending money for your apartment’s rent. This memo would be “June Rent” (or whatever month it is).
Finally, your signature. This verifies that you are writing the check! The check is not valid without your signature.
Applying for a Credit Card
There are a lot of misconceptions about credit cards, mainly that they are bad, but this is not the case. It is likely that you will need to use a credit card in your life. It is likely you will need a loan.
It is important that we (Gen Z) start building a credit score now, so we can use it later if needed. We graduate college and are expected to live on our own, in a house, with bills and other massive expenses. In order to get a loan for big purchases, you need a credit score, and a good one.
This being said, it’s easy to go crazy with a credit card and start building bad credit. Only take this step if you feel you are ready. The purpose of getting a credit card now is so it can help you in the future, not hurt you.
There are many credit card options for students, but the one that is most highly ranked and used by many, are credit cards by Discover. They come with benefits and rewards depending on your spending.
Discover it Chrome for Students
With this card, you get rewards for good grades, earn 2% cash back on certain purchases, and an unlimited cashback match. This card also has a list other benefits which you can see in the link I provided.
Discover it Student Cash Back
Here is another option by Discover. Whatever credit card you choose - DO YOUR RESEARCH. Some may benefit you more than others depending on your spending. This card also has a good grade reward, 5% cash back on certain purchases, and an unlimited cash back match.
I will urge this again: DO YOUR RESEARCH. MAKE SURE YOU ARE READY.
When you apply for a credit card, you need to make sure you have the means to keep up with it. This means you need an income and responsibility.
It’s cool and fun to swipe your credit card and get rewards and build your credit score, BUT please be careful.
I want to give you all the best advice and help you on your financial journey, not hurt you.
That is the extent of my guidance to you today. As always, if you have any questions, PLEASE reach out! There may be some concepts or words that you do not understand in this post, and that is okay. Ask us!
Talk to you all soon! We are here for YOU!