Financial literacy is the ability to use skills and knowledge to make informed decisions about managing money and other financial resources, so that you can have a lifetime of financial security. Does this sound overwhelming? Fear not; there are financial resources available to help you handle your money.

BUDGET

A budget is a plan for saving and spending the money you earned so you avoid unnecessary spending. It helps you keep track of where your money goes so you can make smart choices for now and for the future. Here is how you build a budget:

  1. Write down your total take home income (how much you make a year) and set aside at least 5% of that for savings and emergencies
  2. Sort your expenses into categories
  3. Subtract the expenses from the take home income to see what extra cash is available
  4. Track your spending to know where your money is going and where you can spend less money;
    Keep readjusting as needed.

SAVING YOUR MONEY

People save money for as many reasons as they spend money. Usually they are saving now so they can buy something down the road. For example, people save up for buying a car, moving into their own apartment, and the list goes on. There are some options for saving your money through banks, and financial institutions like credit unions will pay you interest on the money you keep in the bank for long periods of time. Interest is money paid by the financial institution regularly at a particular rate for the use of your money.
Saving Accounts are the most common way to let your money grow over time.
Investment Accounts are used to help save for large expenses like college.
Money Market Accounts offer higher interest rates than savings accounts but they have restrictions on accessing your money.
Certificates of Deposit (CD) keep your money in the bank for a designated period of time.
Savings Bonds are issued by the United States Government and are guaranteed to produce a return of the full purchase price plus interest.

CREDIT

Credit is not the same as cash. It is a loan which normally comes with an interest payment attached and there is an expectation that you will repay the loan plus interest. Credit can be offered in many forms. There is a home mortgage, a car loan, a credit card or even something as simple as a friend loaning you $5. In order to get credit it is important to have a good credit history. 3 major credit bureaus track your credit history for lenders. They are Equifax, TransUnion and Experian. They not only document what you borrow they also track whether you pay your bills on time. A bad credit history can affect your ability to borrow money your whole life.

SHARING

So far, we’ve discussed the basics of managing money and credit. Part of that may be managing money so that you have enough to give back. Why is it important for sharing your wealth with society? GivingPoint is all about helping you learn how to be a civic leader and philanthropist. Philanthropy is when a person donates his or her time, talent and money to increase the wellbeing of all people. Philanthropy can bring about very important changes in the world that make positive life experiences. While increasing your financial literacy, you are learning the power of money. How will you use your money to help others? This type of spending is called donating. When you help others you are ultimately helping our world and those that you love and care about, including yourself. We all benefit from nonprofit organizations in our community. Nonprofits exist in order to help our community meet needs that businesses and the government cannot meet by themselves. These needs range from healthcare, education and crime prevention. If you are good with money, economics and math, you can share that knowledge with those less fortunate. How can you help others learn financial literacy? Do homeless shelters need people like that to volunteer, etc? Maybe you work in the financial field and volunteer your time and expertise pro-bono to help an inexperienced non-profit. By using your skill and knowledge in money management you are helping others.

Resources
www.juniorachievement.org
www.themint.org
www.feedthepig.org
www.360financialliteracy.org/Life-Stages/Tweens-Teens

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