BigTows Personal Finance 101

Updated 17 Jan 2017

While chatting to several of my buddies, I realised there is a huge personal finance education gap for the majority.

Here’s a helpful personal finance guide along with a few investing How-To’s. (USA centric)

-Budget tracking

Use an automated budget tracking site like mint.com or personalcapital.com for all personal finance tracking.

-Emergency fund

Everyone should have an emergency fund in a liquid money market account. A good rule of thumb is having saved 3 to 6 months salary in case of job loss. The emergency fund should cover basic necessities and only be used in emergencies. A vacation or a kegger are not emergency examples.

-Frugal living

Living in emerging markets has taught me that most people can be happy with much less. Mr Money Mustache’s blog provides great ideas for cutting the clutter and fat from our lives. 
http://www.mrmoneymustache.com/

-Tax planning

Know your expected yearly tax burden and pay the IRS the minimum. The average USA wage earner gave the government an extra $3000 in taxes in 2014. There’s no sane reason to give the government a zero point loan. That’s an extra $250/month that could be used towards paying down debt, credit cards, student loans, mortgages, and/or towards retirement accounts.

Some of us are poor planners and enjoy that huge tax refund. If you adopted a budget then month to month bill paying would be easier and might even have extra for that kegger. ☺

Calculate your yearly expected payment then adjust your W4 to pay the minimum. 
http://www.moneychimp.com/features/tax_calculator.htm

-Debt planning

If you have loans: student loans, credit card debt, mortgage loans, etc then consolidate the loans. Most creditors will work with you so ring them! If lucky enough and have excellent credit then refinance the loans at a much lower interest rate while interest rates remain low.

If you have debt then Moneychimp’s calculator will show you how much interest you can save by increasing your monthly payments. 
http://www.moneychimp.com/features/debt_payment_calculator.htm

-Identity theft

If you are a victim of fraud then follow the guidance in the Alert Investor article. 
https://www.thealertinvestor.com/are-you-a-victim-of-financial-fraud/

Also, check all three USA credit reporting agencies for free each year to make sure all charges are valid. It’s best to spread credit checks out throughout the year. Take advantage of the free credit checks and wisely use them. 
http://www.consumer.ftc.gov/articles/0155-free-credit-reports

-Investing basics

The Motley Fool has good how-to-invest articles for novice investors. 
http://www.fool.com/how-to-invest/

Khan Academy’s finance and capital markets modules are 5-10 minutes long and very worthwhile learning. 
https://www.khanacademy.org/economics-finance-domain/core-finance

Budget, live frugally and invest in your early retirement. It’s never to early or late to start retirement planning; take advantage of compounding interest and start investing in YOUR future today!

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