NDSU Extension Service - Ramsey County


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Money Matters to Know

Money Matters to Know


The knowledge you have to manage your dollars greatly affects how far your dollars stretch, how they accumulate in savings accounts and the stability you do or do not have in life. Some money basics that all adults need to know include: 

-          Dealing with Credit Cards

In today's world of credit, it's vital to understand credit card basics. Credit cards can be an asset or  a liability depending on how you use them. Understanding credit interest rates, how and when interest is charged and late fees can save you hundreds if not thousands of dollars.

-Importance of Compound Interest

Americans have a habit of waiting to save large amounts – from an inheritance, from winning the lottery, from selling property – and forget to save the small amounts. Compound interest can change those small, consistently saved amounts to a large amount. Save $150 a month without compound interest, and in 30 years you'll have $54,000. Save the same amount with a return of 9% compounded interest (given – a much higher amount than normal in today’s markets) and you'll have nearly $275,000 after the same 30 years.

-          Depreciation

Not everything you purchase is an investment, so it is important to understand the difference between an appreciating asset and a depreciating asset. Many of the things that people buy, such as cars, will decrease in value over time. That does not make them a bad purchase, but it does mean you should be purchasing these at the best price you can and not buying more than you actually need.

              -Importance of an Emergency Fund

Life will always throw unexpected curves into even the best laid plans, and realizing that this is likely to happen and being prepared with an emergency fund is an essential part of your financial literacy. Unexpected financial losses can occur, and having an available resource for these emergencies can be the difference between remaining financially healthy and finding yourself financially struggling.

-Learning to Budget

There isn't anything more important than knowing where the money that you earn is going. How you budget is not nearly as important as that you actually keep track of what you earn and where you spend that money in some way or form.

-Separating Want from Need. One of the sharpest reality checks you receive when you become “independent” is the realization that your needs are no longer being taken care of by someone else. When you’re young it’s easy to spend money on wants, because you don’t really have to spend money on needs. In that transition into full-on adulthood, a lot of young adults put themselves in a bad financial position because they continue to put their wants before their needs.

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