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.
• 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 savings
What do you think is important to know? What have I left out?
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.
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.
The Rule of 72 and a lesson on dollar cost averaging
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.
Perhaps something about what insurance is and what circumstances different types of insurance are suitable for.
Great list!
Thanks for the ideas guys :)
Just a thought, maybe you should write some primer articles, one for each of your bullet points!
Mrs. Micah, that’s the plan when I get organized enough to do it :)
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
In my opinion, everyone should also know how to buy index funds. Why pay the fees the mutual funds charge?
Hi! Great stuff! Thanks for the list!
That is a great list. I’m going to link to it.