- Compound interest, computational skills and amortization are the three key money concepts we all need to master.
- As Einstein observed, compound interest is a saver/investor’s greatest friend and a debtor’s greatest enemy.
- Creating a budget and sticking to it are essential to building wealth and a secure financial future. Budgeting just takes discipline and the basic math skills that you learned in middle school.
- When paying off a long-term loan, pay attention to the principal versus the interest, not just your monthly payment amount.
- Make sure you always have three to six months’ worth of expenses saved in a rainy day fund that you can easily tap.
- There are three aspects of a rainy day fund: objective, subjective and emotional.
- A rainy day fund will enable you to weather the financial and emotional impact of a sudden job loss, medical emergency or unexpected major repair.
- Pay your entire balance off (on time) every month.
- Always stay under your 30 percent utilization rate to maintain good credit.
- Research your awards programs carefully.
- Establishing a good credit history early in life goes a long way to helping you get favorable loan terms.
- To build your credit, pay your bills on time, stay under the 30 percent utilization rate and establish two credit cards with staggered due dates.
- Get a free credit report at AnnualCreditReport.com. Make sure there are no errors in your credit history.
- Always keep your FICO score above 740.