Practical Guide to Personal Finance - Young Adults

In this section, I introduce you to the 5 building blocks of putting your finances in order, as well as explain why each step is important ahead of the next step.

In this section, I cover a brief intro on why you need insurance, and the basic insurance types recommended.

We introduce this section by starting to talk about, and evaluate what your income is doing once you've earned it.

We  make a list of all your income, and all your debts and obligations that take your money away everything. In order to understand your finances, we need to look at the plans currently in place that dictate how your money moves.

In this section, you take a look at all your accounts, and look at everything you've spent money on recently. You've walked through and made a list of where you expect your money to come in from and go, but is that truly what's happening?

In this section, I talk about what your budget should look like. I introduce you to the 50/30/20 rule to guide you on how to structure your budget, and I talk about mint.com which I personally use and prefer for tracking my finances. There are also a few tips on how to make your budget practical, and how to stick to your budget.

If you are not tracking your expenses after creating a budget, you might as well not have bothered with creating the budget. I discuss how to track your expenses, and how to ensure you are sticking to your budget

It is important to get rid of debt so that your assets and money actually remain yours. Any debt you owe, automatically means someone else has a right over some amount of money and asset you are keeping for yourself. While debt is not altogether a bad thing, there are only a few scenarios where this is acceptable. Removing the worry of a debt is essential to financial well being

I introduce you to the snowball method, which involves focusing on paying off the lowest debt accounts 1st and then increasing the payments made towards any other debt accounts with cash that has been freed up from paid off debt accounts. We will walkthrough an example of what this looks like

I introduce you to the debt avalanche method which involves paying off the debt accounts with the highest interest rates 1st. This method focuses on paying the least total amount of debt. We will walkthrough an example of what this looks like.

Ultimately, which debt payment method to use will depend on your personal preference and the debt accounts you have. If you get more joy from getting rid of debt accounts, and are not too concerned with the few extra dollars that might be needed in following the snowball method, then do that. Remember, there is a strong mental aspect to financial well-being, and it is not just about knowledge and mathematics.

Here, I provide a few tips you can apply to help you get rid of debt faster.

What are the factors which affect your credit score? Which of these has a high impact? How do I balance all these factors. I answer these questions and more

From the previous lecture, you understand the factors that affect your credit score. Now, we go a bit more in depth to understand the things you should be doing to help improve your credit score, or maintain a high credit score if you already have it.

Some refer to this as the emergency fund. I personally prefer to call it the peace of mind fund. I explain why it is that, how to work towards calculating it, and how to save up for it.

Short-term goals are things that you want do within the time frame of a few days to a few months, typically within the next year. A quick trip for an event, a vacation, an expensive watch or shoe. It is okay for your goals to be luxury items if that is what you want, as long as you are planning appropriately.

Long-term goals are usually things that you want to do within a few years; retirement, saving for education for you or your kids, buying a house, starting a business etc.  Whether a goal is short-term or long term ultimately depends on you and the time frame you want to complete that thing.

This section covers essential tips towards ensuring that you are consistently hitting the savings targets you have defined for yourself earlier in the course.

Everyone's definition of wealth is different, and while the intent of this course is not really about building wealth, in as much as it is to help you be financially responsible, you will find that applying the teachings of this course will quickly get you on the path to building wealth.

This section covers how to calculate your net worth, and why it is important to know your financial net worth