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LiBan · 10-04-2007, 10:17 AM

OK, so I have been taking a personal finance course and some basic things from my notes:

The most important thing is to pay off your biggest bills first. The big ones will only get bigger. Then pay off each bill until you have paid off the smallest ones.

Cut up all except one major credit card and cancel the services. You only need one. Also, agencies who lend money and/or approve loans will look at your potential for debt. The more credit cards you have the more potential debt you could suddenly find yourself in. (I thought that was sort of crazy) So, take that into consideration.

Never use a credit card to pay off your basic living expenses.

If you don't have the money for school, taking out a loan is not a bad idea. Most education loans don't begin to compile interest until after you graduate. A college education is one of the only things that you should pay for with credit (major medical emergencies and taking out a mortgage on a house being the other truly good uses of credit). Besides, as a college graduate you will have the potential to make more money.

The advice to live below your means is absolutely correct!

Putting aside money is also very correct. You should start saving now. Ideally you save 15% of what you earn, but put away ANYTHING that you can. My teacher has told me that your twenties and early thirties are the MOST important years to save. If you don't start saving until later, you will never catch up to what you could have saved if you start now. Like Cynthetiq said, even if it's just $5 it is better than nothing.

There are two basic goals with a savings account. The first is to have enough set aside to support you for 4 to 6 months should you suddenly be out of work or unable to work. The second is to save for retirement.

Good luck.

10-04-2007, 10:17 AM	#6 (permalink)
LiBan Upright Location: Alabama	OK, so I have been taking a personal finance course and some basic things from my notes: The most important thing is to pay off your biggest bills first. The big ones will only get bigger. Then pay off each bill until you have paid off the smallest ones. Cut up all except one major credit card and cancel the services. You only need one. Also, agencies who lend money and/or approve loans will look at your potential for debt. The more credit cards you have the more potential debt you could suddenly find yourself in. (I thought that was sort of crazy) So, take that into consideration. Never use a credit card to pay off your basic living expenses. If you don't have the money for school, taking out a loan is not a bad idea. Most education loans don't begin to compile interest until after you graduate. A college education is one of the only things that you should pay for with credit (major medical emergencies and taking out a mortgage on a house being the other truly good uses of credit). Besides, as a college graduate you will have the potential to make more money. The advice to live below your means is absolutely correct! Putting aside money is also very correct. You should start saving now. Ideally you save 15% of what you earn, but put away ANYTHING that you can. My teacher has told me that your twenties and early thirties are the MOST important years to save. If you don't start saving until later, you will never catch up to what you could have saved if you start now. Like Cynthetiq said, even if it's just $5 it is better than nothing. There are two basic goals with a savings account. The first is to have enough set aside to support you for 4 to 6 months should you suddenly be out of work or unable to work. The second is to save for retirement. Good luck.