Graduation Season: A Great Time to Review Money Basics
With graduation season just around the corner, now it a great time to review five key money basics for both students and the entire family.
- Understand your net worth. Get used to making this calculation at least once per year. It equals everything you own minus everything you owe others. For young graduates, this number will probably be negative due to debts, which is ok. The key is to measure this number over time and set a goal to improve it each year. Positive net worth opens many doors, including the ability to start a business, get a first home, or even lower your car insurance bill.
- Understand basic money mechanics. Review and understand a paycheck, along with learning about the basics of Social Security, Medicare, and common withholdings to pay for taxes. Then review and understand basic banking products. Actively managing your cash in today’s high inflation environment can yield meaningful interest income, something long missing from banks. Learn how to review and catch banking errors or fraud, and understand how your debit and credit cards work, as well as overdraft protection.
- Carefully manage debt. It is easy to burden yourself under a pile of debt. Credit card companies will fight each other over getting their credit card in your hands. And they love when you carry a balance on their card. If you do carry a balance, you are often paying 2 to 5 times the cost for every purchase you make. So ALWAYS pay the credit card bill in full each month. The next debt mountain built is from student loans. While unavoidable for many, try to minimize the size of the loans as much as possible.
- Understand basic expenses. Food, transportation, utilities, insurance, taxes, rent, and medical expenses are just several examples of everyday expenses. The best way to understand these expenses is by creating a budget. Then, before every big decision, research the costs and talk to people that have been in your shoes so you see how it fits into your budget. In addition to recurring expenses, plan to save three-to-six months of expenses for unforeseen emergencies.
- Invest in yourself. Remember, your most valuable asset is you. So invest in things that make you more employable and provide greater lifelong income earning potential. The best return is often one that is made to create a better future.
The world of money and finance can seem overly complicated. So keep asking questions and seek advice until you fully understand the mechanics of money and how it impacts your situation. You’ll be amazed at how powerful that feeling can be.
Rabalais Business Consulting is Acadiana’s Small Business Survival Specialists firm based in Lafayette, LA, offering specialized business and accounting services to small businesses in the traditional sector.
Our team of highly trained professionals possesses the expertise and experience to provide clients with a comprehensive range of services, including accounting, tax planning and preparation, financial planning, business consulting, retirement planning and more.
At Rabalais Business Consulting, our primary objective is to help businesses achieve their financial goals by optimizing their financial performance, minimizing their tax liabilities, and protecting their hard-earned wealth. We achieve this by working collaboratively with our clients to develop customized solutions that align with their unique business objectives.
Our approach to business consulting is tailored to the specific needs of each client. We believe that every business is unique, and therefore requires a customized strategy to achieve its goals. We take the time to get to know our clients and their businesses, so that we can identify opportunities for growth, mitigate risks, and develop strategies to optimize their financial performance.
Our team of professionals possess a wealth of knowledge and experience in a variety of industries. We are committed to staying up-to-date with the latest industry trends and regulations, so that we can provide our clients with the most relevant and effective advice and solutions.
At Rabalais Business Consulting, we are passionate about helping our clients achieve their financial objectives. Whether you are a small business owner looking to minimize your tax liabilities or a company seeking to optimize your financial performance, we are here to help.
Thank you for considering Rabalais Business Consulting for your business needs. We look forward to the opportunity to work with you and help your business achieve its full potential.