Know Your Loan Basics

Key Takeaways

  • Four basic components of any type of loan are time, interest rate, loan amount and payment.
  • Young adults tend to have four types of loans: student, auto, credit card and mortgage.
  • A good credit score will give you much better terms on any type of loan—and save you thousands of dollars over your lifetime.

Used Car—Double the Benefits!

Key Takeaways

  • Don’t tie up your cash when you’re young, but you have to be smart about your loan terms.
  • Making slightly larger, or more frequent, payments than you’re required to can add up to HUGE savings down the road.
  • A used car is often better than new when you’re young—especially when the savings is applied to higher-rate student loans and credit cards.

5 Reasons Why Math Matters

Key Takeaways

  • Even if you weren’t a math major, you need basic computational skills and an understanding of compound interest, inflation, amortization and taxes to be a financially responsible adult.
  • As discussed in a previous post, the Rule of 72 is a powerful shorthand way of calculating how many years it will take an investment (or debt) to double.
  • Don’t forget to factor in the drag of taxes and inflation on every important money decision you make.