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Learning about money is not a given for most Americans. Unless your parents teach you how to save money or manage your finances, you’ll probably have to figure out how to manage your money better. As of earlier this year, only 18 of her states have mandated individual financial education in schools.
I was fortunate to grow up with parents who taught me the value of money from an early age, but there are many things I wish I knew sooner, from the importance of investing early to how taxes affect your take home. I have.
In particular, I wish I had known about Roth’s personal retirement account when I was in high school. It’s meant for retirement savings, but anyone with an income can donate up to certain income limits and grow their money tax-free.
Amy Martin in high school.
Source: Emmy Martin
I always hid part of my salary from summer jobs and part-time jobs for “the future”, but the money remained interest-free in my bank account. That money would have had more time to grow and compound.
In the spirit of Financial Literacy Month, I asked my colleagues what they wish they had known about money when they were younger. Below are seven lessons from him that we learned.
When I was in my twenties, I didn’t think much about interest on credit card debt. Instead of paying off your purchases as soon as possible, you pay off your credit card debt intermittently, usually enough to cover your minimum monthly payments.
Usually hundreds of dollars in debt, I spent more than that amount over time on interest alone. Instead, we should have cut our expenses and focused on paying the outstanding balance. —Mike Winters, Money Reporter
I want to know more about college and early 20s credit. It was always presented to me as a bad thing that I should avoid altogether.Renee Onque, Health and Wellness Reporter
No one told me to get a credit card when I was in college, or at least soon thereafter. Instead, I became very nervous about making a mistake and going into debt, and relied solely on my debit card until I was in my twenties.Ester Bloom, Deputy Editor-in-Chief, Make It
When you’re thinking about how to budget, it’s not productive to label every money decision as “good” or “bad”.
For example, instead of buying a $15 salad, you buy groceries you don’t use because you need to prepare lunch.Una Dabiero, Contributing Editor
You will need more money than you think because of the many surprises life throws your way. —Gili Malinski, Chief Writer
My first job was insurance, which was pretty ridiculous. Since I was a young and healthy person, I had health insurance with a high deductible. I wasn’t making much money, so I didn’t bother investing the money I invested. I wish there was.
Investments purchased within an HSA plan have three tax benefits. Donations are made with pre-tax money, your money is tax-free, and you don’t have to pay Uncle Sam for retirement if you withdraw your money and invest it in something that qualifies. Medical bills. —Ryan Ermey, Senior Money Reporter
Do not connect your ATM card to your savings account. There is no such thing as money disappearing quickly. —Elisabeth Cordova, Associate Editor, CNBC Digital