What everyone should know about personal finance
You hear people talking about how personal finance should be taught in school. So I got to wondering, what are the things that everyone should know about personal finance? Here’s my list, in no particular order.
Everyone should know how to…
• Choose & open a checking and savings account.
• Balance their checking account. (And that they SHOULD balance their checking account.)
• Create a workable spending plan (aka a budget).
• Guesstimate the amount their take-home pay will be from a job.
• Negotiate starting pay and pay increases.
• Figure the amount of discounts.
• Grocery shop wisely.
• Pay a bill (and what those due dates really mean).
• Avoid getting into trouble with credit/debt.
• Return an item.
• Ask for discounts.
• Negotiate on big-ticket items.
• Complete a basic tax return.
• Possibly save money on taxes.
• Figure a restaurant tip.
• Check their credit report.
• Tell if something is a scam.
• Watch out for fees & the “nice” things that banks & credit card companies offer.
• Calculate the true cost of buying an item over time.
• Read the fine print.
• Save for long and short-term financial goals.
• Pay themselves first (and last).
• Understand how interest is calculated on credit cards
• Understand how interest is calculated on savings
What do you think is important to know? What have I left out?
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October 21st, 2008 at 8:40 am
I know you said “not particular order”, but I’d have put that last item first, in all-caps, bold and italics! It’s at the core of so many other items on this list.
Perhaps Personal Finance 102 should include understanding 401Ks, IRAs, and other retirement planning instruments. And maybe a lesson in how to choose a good financial planner should the need arise.
October 21st, 2008 at 9:13 am
Thank you very much for the post. Pretty basic stuff, however I will bet you the
average Joe only does about 10% of your bullet points. Too bad. It says a lot
about hte state of affairs we are in today.
October 21st, 2008 at 5:29 pm
The Rule of 72 and a lesson on dollar cost averaging
October 22nd, 2008 at 12:09 pm
In addition to knowing the true cost of buying over time, I would also add–Know your true hourly wage to determine how much time purchases actually require. It’s one piece from “Your Money or Your Life” that really hit home with me.
October 22nd, 2008 at 1:05 pm
Perhaps something about what insurance is and what circumstances different types of insurance are suitable for.
Great list!
October 22nd, 2008 at 4:37 pm
Thanks for the ideas guys :)
October 24th, 2008 at 7:28 am
Just a thought, maybe you should write some primer articles, one for each of your bullet points!
October 24th, 2008 at 8:58 am
Mrs. Micah, that’s the plan when I get organized enough to do it :)
October 24th, 2008 at 7:36 pm
I wish I was as organized as you were to even come up with the list. Now I can’t do it because I’ll be copying. :P
October 26th, 2008 at 2:27 pm
In my opinion, everyone should also know how to buy index funds. Why pay the fees the mutual funds charge?
October 26th, 2008 at 8:44 pm
Hi! Great stuff! Thanks for the list!
October 29th, 2008 at 3:38 pm
That is a great list. I’m going to link to it.