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10 Money Rules You Need To Memorize By The Time You Turn 40 » TwistedSifter

Remember when you got your first real job as a kid and your mom or dad (or maybe both) told you to put some money aside on every paycheck for you to take used to saving money, even if it was just a little at a time?

Well, as usual, turns out mom and dad were right!

And today we’re going to have a refresher course on the rules of money that you should memorize and start practicing before you turn 40.

We’ll take a look.

I’m talking about credit cards, FYI.

Americans have an average debt of $7,000, and many young people in their 20s and 30s make mistakes with their credit cards and rack up a lot of debt.

Pay off your credit card every month so you don’t get sucked into debt hell. It can make your life a nightmare.

It is recommended to save six months of expenses in case something happens: a leave, a layoff, etc.

And Certified Financial Planner Carla Dearing says it’s just a good habit to get into, so sit down and figure out what six months of spending would look like for you.

It’s a good start !

Photo credit: Unsplash, Alexander Mills

You’ve heard of intermittent fasting for your health, but there’s also fasting you can try for your bank account.

Dearing recommends only spending money on your basic needs and bills for one month and putting the rest into your savings on a trial basis. This exercise will give you an idea of ​​how much money you’re spending on things you don’t need and encourage you to reduce your spending slightly.

It’s a big.

You need to know WHERE your 401k is and HOW MUCH is in it. Carla Dearing says: “People think they should know all this money stuff and are paralyzed when they don’t, but ignorance is no excuse for inaction.

About 42% of Americans aren’t saving for retirement, but it’s a necessity. Ask your human resources manager or a bank representative to help you determine your 401k if you have questions and make sure you make the maximum contribution each month.

401k - eggs and american dollar bills

FYI, Americans are entitled to a free credit report every year…and you should!

It’s important to know what your credit looks like because it influences everything from your insurance rates to your rent. Ideally, you should be looking for a score above 710.

After you receive your report, be sure to review it carefully for fraud, bills you may have forgotten, old loans, and any other possible errors.

You don’t see many people these days balancing their budgets with pen and paper like they used to, so it can be difficult to keep track of your finances now that everything is done electronically.

But Dearing suggests you always make a monthly budget to keep track of your money: “It doesn’t have to be a complex spreadsheet, a good old-fashioned spreadsheet is fine.”

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Photo credit: Unsplash, Kelly Sikkema

Student loans are all the rage these days and there is no doubt that many Americans have huge student loan debt.

Dearing says the first thing you should do is separate your loans into two categories: government and private. The next step is to see if you can consolidate your federal loans and lower your payments.

For private loans, contact lenders to inquire about consolidation and negotiating better terms.

Many people tend to ignore life insurance because it seems confusing, but Dearing thinks it’s important to get term life insurance.

She says, “You only need to buy for 20-25 years, or until your kids (if you have any) graduate college. There are plenty of affordable options out there, and it’s one of the best things you can do for your loved ones and your own peace of mind.

Look at the !

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Photo credit: Unsplash, Scott Graham

Dearing thinks it’s a mistake to put off buying a house in favor of renting and having more flexibility.

She says, “Real estate isn’t just for rich barons! For most people, a house is the main wealth asset. The performance of houses is always better than that of the stock market.

Dearing also stresses the importance of having enough money for a 20% down payment and says that if a home is out of reach, you might want to consider buying a rental property with a family member…or someone else you trust.

I’m talking about identity theft because it’s a huge problem and it can lead to a ton of huge problems.

Make sure you don’t throw your bank statements in the trash without shredding them first. And you should always pay attention to your statements and the email alerts you receive from your banks and credit card companies to see if anything suspicious is going on.

Staying on top of potential scams is a huge challenge, so keep an eye out at all times!

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Photo credit: Unsplash, Zac Gudakov

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