Roy Paul, the executive director of Cents Ability, has some tips that’ll help young adults stay well informed while dealing with their finances.
It’s never too soon to start saving: Understand the importance of how saving early can create long term financial success. When you save early, you can accumulate more wealth even if you save more later in life.
Financial impacts of student loans: Know how much you’re going to have to pay back before you take out student loans. Many students are shocked once they graduate and receive their first repayment bill.
Develop a budget: Many students earn jobs during the summer and in some cases during school and do not put money away for a rainy day – get into the habit now. We recommend 20% of your check should go into a savings account that you should try not to touch until you really need it.
Good vs. Bad usage of credit: There are good and bad ways to use a credit card. Many don’t understand that you have to pay that money back — with interest! What are your needs versus your wants?
According to Cents Ability:
54% of their student “never” or “rarely” talk about money with their family
63% of recent participants in their program say they have “never” written down a financial goal
Based on statistics like these, the organization feels there is a critical need for financial literacy education.
Cents Ability is a non profit organization that teaches young people how to make informed money management decisions, founded by two Harvard Business school graduates who wanted to give back and help develop a more financially literate society.