Have you ever wondered if your financial education is complete? Whether you hold an advanced degree in the subject or not, it’s always possible to acquire a few more real-world skills and concepts to make life easier. For example, those who have never owned a home are often shocked to discover how one act can transform their fiscal health. In a similar way, many working adults are surprised when they discover that cutting monthly expenses can totally change their financial situation. Others find empowerment in learning the secrets of how credit scores are calculated, and the usefulness of joining wholesale shopping clubs. Here’s how to get started.
Learn the Value of Homeownership
Some people love to rent, but owning a home is one of the most effective ways for working adults to build wealth. Even on a modest income, if you have good credit, you can purchase a home and pay it off in 30 years or less. The inherent value of homeownership is related to two things. First, your monthly mortgage payment adds some equity to your total balance. Second, there’s a chance that your property can increase in value over time, even though your mortgage payments remain the same. Being a homeowner can also help you learn new skills as you will likely have things pop up all the time that require your attention. Learning how to maintain a home on a budget is a high-value, future-focused skill that will add to your financial literacy.
Know How to Lower Monthly Expenses
One of the basic concepts behind saving money is the idea of refinancing. In many situations, particularly if you want to refinance student loans, the new agreement is simpler, comes with a more favorable interest rate, and includes better terms. Working through a private lender, many working adults who owe on education debt can save several hundred dollars per month. Everyone’s situation is different, but the general effect of a student loan refinance agreement is a much lower monthly outflow of cash from the personal budget.
Understand How Credit Scores are Calculated
When you pay your bills on time and use less than 30 percent of the credit available to you on standard cards, you’re on the way to a solid credit rating. All three bureaus look at on-time bill payment and credit usage as two of the main factors when calculating your overall scores. Each company has its own quirks and unique algorithms, but staying current on bills and keeping credit card usage low will serve you well in the long run. When your scores are in a good category or better, you gain access to lower interest rates should you decide to purchase a home or a vehicle.
Use Wholesale Clubs to Pay Less for Groceries and Fuel
If your city has one or more wholesale clubs, compare membership fees, and see how much of a discount each club offers on gasoline. Fees don’t vary that much, so pay more attention to fuel discounts and whether the stores carry most of the grocery and bath items you regularly purchase. Before committing to a membership, ask for a one-week trial. Most clubs are happy to let you check out their inventory and get an idea of how much you can save annually, which is usually at least $1,000 per person.