Savings. Investments. Interest Rates. If these terms sound foreign or scare you, no need to worry! MyMoney.Gov is the federal government’s website dedicated to teaching the basics of financial education. Making the most of your money begins with five building blocks for managing and growing your money—the MyMoneyFive. Try to keep these principals in mind as you make day-to-day decisions and plan your financial goals:
EARN: Make the most of what you earn by understanding your pay and benefits. This principle is about knowing and understanding the fine print and details about your paycheck, including deductions and withholdings.
SAVE & INVEST: It’s never too early or late to start saving. You can save for future goals such as buying a house or retirement, even by saving small amounts. People who make a habit of saving regularly, even saving small amounts, are well on their way to success. It’s important to open a bank or credit union account to make saving simple and easy.
PROTECT: Take precautions about your financial situation, accumulate emergency savings, and get the right insurance. Be vigilant about identity theft, and keep aware of your credit record and the credit score.
SPEND: Make sure you’re getting a good value, especially with large purchases, by shopping around and comparing prices and products. Make a budget or a plan for using your money wisely. It’s helpful to set short and long-term financial goals and manage your money to meet those goals.
BORROW: Borrowing money can allow some essential purchases and build credit, but interest costs can be expensive! If you borrow too much, you can acquire a large debt to be repaid. Your ability to get a loan typically depends on your credit history, and that largely depends on your track record at repaying what you’ve borrowed in the past and paying your bills on time.
Whether you are buying a home, balancing your checkbook, or looking to invest, there are resources and information that can help you achieve your financial goals. Just like having good physical health, it’s also important to maintain good, stable, healthy finances.