Five personal finance skills everybody should have
Money and personal finance is very important in everyone's life, so make it your goal to learn as much as you can. Start by opening your first bank account, become financially savvy, and build a good credit history that could help you in the future.
A US dollar note and a Chinese yuan banknote are seen through a pair of spectacles.
Reuters/Nicky Loh/File
Just a decade聽ago, I would have considered myself financially 'illiterate.' 聽I had no idea how 聽finances worked, what a credit score was. 聽I didn't even have a debit card. 聽But, after seeing how important money and personal finance was in your everyday life, I made it a goal to learn as much as I could, and started by opening my first bank account. 聽Here are some essential skills that you need to know to consider yourself financially literate.
Banking
At a minimum, you should have a checking and savings account. 聽Paychecks are largely聽deposited electronically nowadays, so if you have a full-time job you should already have one. 聽Savings accounts are good for that聽聽and for general savings as well. 聽With a debit card and bank account, you'll be able to pay bills online. 聽I would recommend memorizing your bank account number and routing number.
Credit
You should understand how your聽. 聽This is one of life's big mysteries for some and the more you understand, the better rates you'll receive when you ask for a loan or mortgage. 聽It will also make you a more responsible spender. 聽You should understand what APR rates are (and what the rates are on your credit cards), and what fees your credit card charges for foreign transactions and missing a payment.
Investing
You should absolutely understand how the market works, what a security is, and how your聽. 聽You don't have to have extra money to participate in the market, but understanding annual reports, dividends, stocks, bonds, and what a balanced portfolio looks like is essential for your retirement account.
Taxes
It's important to understand how to file taxes, and how tax brackets work. 聽If you have multiple lines of income, and it's confusing (trust me, it is), know that hiring a tax accountant may be a good option. 聽And, when you receive that tax return, know how to invest it properly!
Personal Life
I've always been bad about keeping a budget, but the better you can keep a budget, the more financially free you will become. 聽This means comparison shopping when you're buying an item, not聽purchasing too much that you don't need, cooking at home, and understanding that living within your means is the best way to live.