Budgeting Tips
What is the 50, 30, 20 rule?
spending 50% on needs and 30% on wants while allocating 20% to savings
What is APR
Annual Percentage Rate - Basically interest on the credit card
A _____ allows you to put money away to be reinvested for retirement
401k
How do you handle uncertainty in decision making?
Learn as much as possible about all the options before choosing, avoid unneeded risk, think of worst case scenario, clarify the uncertainty, know your goals and values
Many investors favor this strategy, instead of buying and selling strategy
Buying and holding, it's better bc less transaction costs, more profitable over time
What is the $5 challenge?
whenever you receive a $5 bill as change, you put that $5 bill aside until the end of the year. Those accumulated $5 bills can be used for some type of financial move
You can build this by paying your bills on time, and fully
Credit Score
Instead of eating out, you can do this to save money instead
Cook Dinner lmao
What are 3 causes of uncertainty?
Economic conditions, illness, consumer demands change
This person is the founder of Berkshire Hathaway
Warren Buffet, Owns many different companies, great investors, originated the buy and hold strategy
What should a monthly budget include?
Income, rent, transportation, utilities, food, subscriptions and memberships, and entertainment
This is how many credit cards one should have to optimize credit growth
2 (one with lower rates, another with a grace period)
Instead of paying for your own netflix and hulu, do this instead
Mooch off of others
What are some practical tips for preparing for uncertainty?
Stay in the now, prepare for multiple outcomes, consistently review, and build relationships
A good rule of thumb when investing is, the higher the interest, the higher the ____
Risk, Risky securities compensate investors by having higher interest rates, allowing investors to make more money bc of the riskiness of a stock
How much money should you have saved in your emergency fund?
The rule of thumb is to have at least six months of living expenses saved up in an emergency fund
These are the four different types of credit
Mortgage, car loan, a major credit card and a retail card
Using these can help you make a planing, track your spending, and help you save money
Apps such as nerd wallet, mint, and albert
What are two things people tend to forget when planning for uncertainty?
Surrounding themselves with positive people and taking care of themselves. It’s important to think about the uncertainty in the future but don’t let it consume all your time!
Buying ______ in a company allows for the customer to pay for equity in a company
Stocks, bonds are not equity, they are basically a fixed income loan
What is the name of the financial literacy app that Will Smith has invested in?
Step. Step directly addresses teens by giving them ownership over their finances. The parents still have access but, Step puts the teen in control. Those under 18 can sign up for accounts without parental or guardian consent gaining access to an account with extremely limited functionality. The overarching goal for Step is to financially empower the youth.
Filing for ______ allows one to reduce their credit card debt
Bankruptcy; However it does not eliminate alimony, child support, student loans, and tax debt
What is the best time to start saving money for the long term?
What does making a disaster plan look like?
At this age, it is most beneficial to start investing money
Younger the better, if you are younger you have more time to invest and your horizons are more long term, meaning you can invest your money and let it gain interest for 40 years instead of 20 years, thus making it easier to accumulate wealth