lets talk about money...
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Checking Account
A checking account is an account at a local bank used for everyday expenses. It is essential to ensure your checking account does not have a maintenance fee, which is a fee the bank charges to keep your account open.
Tip: To avoid transaction fees when withdrawing money, use ATMs that belong to the same bank as your debit card.
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Credit Card Account
A credit card account is like a loan from a bank that lets you buy things with borrowed money. You must pay the money back by the agreed-upon end date of the billing cycle. If you do not pay the borrowed money on time, you must pay the interest plus the money you owe.
Tip: If this is your first time using a credit card, I recommend your start with a secured credit card. You can learn more about secured credit cards here.
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High yield savings account
A high-yield savings account allows you to earn higher interest on your savings by keeping your money in the account for a period of time. These accounts are often offered by online banks rather than traditional brick-and-mortar branches.
Suggestion: I have a high yield savings account with the online bank, Discover. You can check it out here.
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TAX advantage account
A tax-advantaged account is a type of financial account that offers special tax benefits, such as tax deductions, tax deferrals, or tax-free growth, to encourage saving or investing for specific purposes, such as retirement or education.
common types of tax advantage accounts: Roth IRA, 401K, 403(b), 529.
Tip: if your employer offers “employer matching contributions” take advantage of that opportunity, it is basically free money from your employer.
“Saving money is the gap between your ego and your income; wealth is what you don’t see.”
— Morgan Housel
budgeting 101
Learning how to budget it is one of the most crucial adulting skills to master. A budget should be like a guide to notice your spending habits. Your budget template/plan should consist of the following five categories:
Know Your Money: First, figure out how much money you have coming in. This is your income, like your salary or allowance.
List Your Expenses: Next, write down everything you need to spend money on. This includes things like rent, food, transportation, and fun activities.
Divide Your Money: Now, decide how much money you will spend on each thing. Make sure the total amount you plan to spend isn’t more than the money you have coming in.
Stick to the Plan: Try to follow your plan as closely as possible. If you spend too much on one thing, you might need to spend less on something else.
Review and Adjust: Sometimes, your income or expenses might change. Check your budget regularly to see if it still works and make adjustments if needed.