The Secret to a Comfortable Retirement You may think that retirement is something that only old people must worry about, but that’s not true. Retirement is when you stop working and live off your savings and other sources of income. It may seem like a long way off, but the sooner you start planning for Read More…
A Strategy to Build Wealth, Not Debt Building wealth is a long-term financial goal that provides financial security, and sets the stage for a comfortable retirement. Although there is no secret formula for becoming wealthy, the process involves developing a solid financial plan, sticking to it, and creating a sustainable strategy that grows your wealth Read More…
The Cost of Raising a Family Before starting a family, you have to know how to manage a household. You probably have an idea about how to be a good housemate from the things that you like and don’t like about living with your family. There’s more to it than who will wash the dishes Read More…
A mortgage is a type of secured loan, with real estate or a house used as collateral. This means you will make an agreement with your bank, credit union, or savings & loan institution to borrow a large sum of money, with a piece of property as collateral.
The Car Buying Checklist Buying a car is usually the first big purchase a person will make. A car loan is a type of consumer loan, also known as installment credit, where you borrow a lump sum and pay it back in fixed monthly payments. There is also no shortage of horror stories of people immediately Read More…
“Spending Shocks” are large, irregular expenses. According to CBS, more than 60% of Americans cannot absorb a $500 spending shock: spending shocks are the #1 reasons why budgets end up abandoned, and being prepared for large spending shocks is the best thing you can do to keep your personal finances healthy.
Public Financial Assistance Programs Building your personal finances from the ground up is something most of us face. You may already have faced times when you had very little or no income, and you were just trying to get to a point where you felt like you didn’t have to worry about paying your bills. Read More…
Proven Techniques to Stop Overspending Building a budget or a spending plan is tough. Sticking to the plan is even tougher. Thankfully, there are a few strategies designed to help you develop positive habits. These strategies will help you learn to save, stick with your budget, plan for emergencies, and control your impulse spending. Budgeting Strategies Budgeting strategies refer Read More…
On every payday, start by taking out money for savings and put it directly into your savings or investing account. Most banks have accounts that will let you do this though automatic transfers. This is one banking service that you should definitely take advantage of.
Once your savings is taken care of, use the remaining cash to pay your bills. Any money remaining can be used for fun and leisure. This method is a no excuses savings approach. No matter what else is happening in your life, you are paying yourself by contributing to your savings. This habit ensures that your savings and investments experience a steady growth rate.
What’s in Your Compensation Package? To be self-sufficient in our economy, everyone needs some type of income; which is money to pay the bills and other living expenses. This comes in many shapes and forms. The foundation of your income potential is often set by your education and career choice. There is a strong relationship Read More…
Bankruptcy is a type of forced debt settlement, and it is a legal procedure. When you declare bankruptcy, the court will gather all your unsecured creditors together to hear about the debts you owe. They will then examine all your assets and determine a plan to pay out as much as they can to settle as many debts as possible.
Getting Help With Debt Repayment If you find yourself over your head in debt, there is always a light at the end of the tunnel. Credit counseling agencies, both for-profit and non-profit, exist in every state to help people build a clear, workable path back to a healthy personal financial situation. If you do need Read More…
Consolidating your debt means taking out one big loan and using that money to pay off all outstanding balances from your previous loans.
How to Negotiate With Creditors Most adults have faced a financial emergency, when an unexpected event has broken their budget or spending plan into pieces. Sometimes more than one emergency has occurred in a short period of time, causing debt balances to spiral out of control. Even in extreme circumstances, it is still possible to keep your Read More…
The Art of Juggling Many Bills in a Pinch Financial emergencies happen to everyone; like your car breaks down and it drains your bank account to pay for the repairs. However, that doesn’t mean your bills will be put on hold while you catch-up. They will continue to be due, even though you won’t have Read More…
How Do You Stop Impulse Purchases? Every person makes hundreds of purchase decisions every month. Think about how many individual items you choose when buying groceries. Which fruits or vegetables will you buy? Which cleaning product will you pick up? What if you need new batteries… An important step in managing your personal finances is Read More…
Go to College or Start Working? Every high school student makes a choice when they are about to graduate – enter the job market right away, enter a trade school, or enroll in a university? Everyone will make the same kind of choice many times throughout their lives. If you first choose to work, the Read More…
How to Avoid Identity Theft, Scams & Fraud In the past, information about your bank transactions, credit card transactions, investment statements, and other financial paperwork came through paper documents. People were told to keep these documents safe or shred them when they were not longer needed. Today, the majority of our financial records can be accessed online. Apart Read More…
Evaluating Big-Ticket Purchases When evaluating how to spend your money, most people make a fairly simple comparison. If the benefit they believe they will receive from the purchase is greater than the cost, then most people go ahead with the purchase. To master your personal finances, you need to start thinking long-term. There are many Read More…
A contract is a legally binding agreement between two parties (people, companies, or both) in which something of value is exchanged. One party promises to do something in return for a something else. Since a contract is legally binding, if one party does not do what was agreed upon, the other party can sue them in court to either enforce the contract or receive compensation. Contracts are involved in personal and business dealings, so it is important that you understand the rules governing them.
Protect Yourself as a Consumer Every time you buy something, you are considered a consumer. The noun consumerism refers to the idea that spending money and consuming goods is good for our economy. Because you are willing to spend money on goods and services, businesses can produce items, people can have jobs, money can flow, and our Read More…
Health insurance is usually the most complicated and expensive insurance you need. Unfortunately, it’s also usually the most important, making it very difficult to avoid the cost. With very few exceptions, health insurance is mandatory for all citizens in the United States, but the way you become insured will change drastically based on your age, income, and the company you work for.
Life insurance is an insurance policy designed to pay out if the insured person dies. These policies were created so that if the main income holder of a household died, the payout from the policy could be used to support his/her family. Over the last 50 years, life insurance policies have greatly expanded in both form and function. Sometimes they look more like investment vehicles than simple insurance policies.
Homeowner’s Insurance is a broad type of insurance coverage designed to cover a home, its contents, and the property it sits on. This insurance is very broad, wrapping many different types of coverage into one package.
Renter’s Insurance is taken out on property you rent to insure against damage or loss. Renter’s insurance works in a similar fashion to homeowner’s insurance. Homeowner’s insurance is designed to cover damage to a home’s interior and exterior, the theft of possessions, and personal liability for harm to others, for example if someone fell down your porch steps and sued you.
Car Insurance: How to Lower Your Rates If you drive a car, you need to be covered by some sort of automobile insurance. You have probably seen dozens of advertisements from insurance companies claiming to help lower your rates, improve your coverage, or just encouraging you to compare rates, but before you buy your first insurance Read More…
Wall Street” is a street in New York City, near the southern end of Manhattan Island. It is the home of the New York Stock Exchange, and the biggest center of stock trading and finance in the world.
What are Bonds? Pop Quiz
Why Accounting Rules Matter Professional accountants are vital to our economy and society. Accountants ensure the effective use of resources by recommending ways to reduce cost, increase revenue, and mitigate risk. The accountancy profession is only as good as the quality of service provided by its members. The regulatory environment of the accounting industry seeks Read More…
Types of Insurance The idea behind insurance is that random bad thing can happen to just about anyone, and sometimes those random things are expensive to resolve. Car crashes, medical emergencies, and flooding can destroy your personal saving and investing accounts if they happen to you and you’re not prepared to deal with them. How Read More…
Once you file your income taxes, the IRS will review all the forms you submit (your tax return) and either accept your submission or reject and return it to you for a correction, usually with very little turnaround time. This can happen whether you are paying what you owe or receiving a refund. However, occasionally the IRS will decide to “audit” your tax return, asking you to provide some supporting documentation before your tax return is accepted.
Do You Need a Tax Professional? Most young people are perfectly capable of filing their own taxes using the IRS Form 1040. However, as your personal finances grow more complex and you become eligible for tax credits, have multiple sources of income, or need to report common tax additions, filing your own taxes becomes more Read More…
Uncovering Hidden Income Taxes You Owe Everyone loves getting tax breaks, but what can really impact your finances is forgetting about tax additions – extra taxes and fees you owe for income that should be reported when you file your income taxes. Forgetting to include this income and not paying the taxes owed on this amount Read More…
Tax Credits & Deductions You Need to Know When you file your income taxes, you can “write off” certain expenses, and get extra tax credits based on your living situation. This means that if you had a qualifying expense over the course of the year, you basically get to subtract that expense from the income Read More…
Income Tax Filing Tips & Tricks What is income tax? Income tax is the tax you pay on your income, usually directly taken out of your paycheck. Everyone who works in the United States should be paying income tax on their earnings. Income is more than just wages and salaries too. If you earn rental Read More…
“Sales Tax” is a tax that is charged on goods sold to end customers, the final user of that product. The sales tax is a set percentage of the sale price of the goods sold, and individual states set their own sales tax percentages. Most states use sales taxes to generate revenue to pay for the state’s operations, but some charge no sales tax at all.
Credit reports contains your credit history – both the good and the bad. If you watch late-night TV, you may have seen a few commercials offering free credit reports, so you might know a little about them. Most people don’t know how important a credit report can play in their financial lives.
Short-term financing means taking out a loan to make a purchase, usually with a loan term of less than one year. There are many different types of short-term financing, the most common of which are “Buy Now, Pay Later,” “Unsecured Personal Loans,” and “Payday Loans.”
A credit card is a form of unsecured credit (meaning a loan without collateral) that you can use to make everyday purchases. All credit card purchases are made using a loan. You borrow money from your credit card issuer to make the purchase and pay it back later, plus interest.
How to Use Debt to Your Advantage Beginners trying to tackle their personal finances for the first time see debt as sort of a boogeyman. A specter that looms overhead trying to trap people into inescapable cycles of minimum payments and late fees. Or at the very least, something to be avoided whenever possible. Deep Read More…
To be “in debt” means to owe money to someone else, usually making fixed payments to pay back the amount over time, plus interest.
Credit is when you use borrowed money with a promise to repay it at a later date. Credit comes in many forms from credit cards to mortgages. There is a wide range of ways to use credit, which means that it is often a challenge for beginners to learn all the ins and outs of using credit wisely.
How Debit Cards Work Can’t view on YouTube? Click Here Before Debit Cards Before the 21st century, if you wanted to buy groceries or visit the mall, you had 4 options that you could use to pay, all of which had their own drawbacks: Cash, checks, credit cards, and short-term financing. Cash is always reliable Read More…
What is Money? Can’t view on YouTube? Click Here Many years ago, before the concept of money existed, if an individual needed something they couldn’t provide for themselves, they would exchange something they owned with someone who had it. This was called bartering. Every item would be traded for a different item. For example, if I needed Read More…
Automatic Payments: Convenience vs. Risk That title may be a bit hyperbolic – Automatic Bill Payments can be a huge time saver, and do help make sure your bills get paid on time (avoiding late fees and general headaches). This does come at a price, though – when your bills are automatically paid, you may Read More…
A “Spending Plan” is exactly as it says – a plan of what you will be spending each month. There are usually two parts – your “fixed” spending and your “variable” spending. The fixed part is usually the same every month, with things like rent/mortgage payments, grocery bills, insurance, and car payments. The variable part changes a lot from month to month, and can include things like Christmas shopping, buying new furniture, and paying for repairs.
The Math of the Stock Market Fractions What is a fraction? A “Fraction” means one piece of a whole. You can use fractions in any case where it might be useful to look at something in parts, rather than the whole thing at once. The most delicious fractions are slices of pizza. If the pizza Read More…
How To Build A Portfolio Pop Quiz
What is a Stock Index? Pop Quiz
What is a Stock Exchange? Pop Quiz
Break Free From Money Stress with a Budget When learning about managing your finances, many experts will recommend you begin with a budget. A budget is a tool that tracks your income and expenses, and it allows you to set goals and make plans for the future. Developing a budget for a specific project, a special event, Read More…
Stocks Made Easy Can’t view on YouTube? Click Here Pop Quiz
Receipts: What to Keep and Why When you organize your financial records, it’s important to keep track of your spending, and with your spending comes receipts. When going on a typical shopping trip, it’s easy to accumulate multiple receipts quickly, as you may visit several stores, grab a meal, and fill up your car with gasoline. Beginner budgeters Read More…
Balance Your Books in 10-Minutes Your parents probably have experience reconciling their checkbook by comparing your own written records with their bank statements. In today’s world, reconciling your checkbook isn’t a common activity for two reasons: This does not mean you can skip the account reconciliation though. In fact, the way instant payments and other conveniences Read More…
Choosing the Best Banking Option for You When talking about Banking, people generally group Banks, Credit Unions, and Savings & Loan companies all in one group. They do provide similar services, but they each have specific differences that might make one a better fit for your financial needs than another. What They Have In Common Read More…
“Wealth” means having an abundance of something desirable. This can be tangible, like money and property, or intangible, like good health or freedom.
Tame Your Financial Paperwork As you begin working with financial institutions to secure your money and process your financial transactions, it is important that you learn to keep good financial records. These records, both on paper and electronic, will allow you to know where your money and assets are and exactly how much you have at Read More…
Finding Stocks In Specific Sectors If you’ve started buying a few stocks, you will probably be interested in diversifying your portfolio between various sectors. This sounds easy, but it can be very challenging finding stocks from a wide range of sources that fit what you’re looking for. Thankfully, our Quotes Tool has all the information Read More…
How To Write a Success Story for Any Business At some point in your business career you will likely be asked to build a case study. Whether it’s for school or for work, building a case study is a very methodical task. While case studies will differ across companies and sectors, your process should remain Read More…
What Are Risk Controls? (And Why They’re Your Best Defense) Risk management is a very important part of any business because it allows for the matching and identification of risk and the associated losses (loss exposures). Practically, this means managers put in place Risk Management Controls. Most business operations are concentrating on maintaining a customer Read More…
5 Ways to Assess Business Risk Risk Management is when a manager tries to organize his company (or business unit) to prepare in case of, and try to prevent, something going wrong. Risk management is one of the most complicated branches of management, as it requires managers to be able to assess unknown situations and Read More…
Short Term and Long Term Financing for Business A company, just like any person, sometimes needs additional money to operate and grow. Businesses seek external financial capital for many reasons, including managing cash flow, developing new products, replacing equipment, expanding operations, purchasing inventory, or increasing sales. Most business funding falls into two broad categories: loans Read More…
Competitive advantage is what makes a business better than everybody else at whatever it is they do. The business with a competitive advantage has an edge over its rivals and provides greater value for its stakeholders. There are many ways to achieve competitive advantage, but the two most common ways are price cutting and differentiation.
The Human Resources department at a business is in charge of everything from hiring and firing employees, organizing and implementing training programs, resolving internal conflicts, determining the pay scales, and everything in between.
Social responsibility is having a sense of duty to society and everything that is a part of it. In other words, “social responsibility” means managers are accountable to society at large, not just their shareholders.
Making Ethical Business Decisions “Business Ethics” defines what is right and wrong in a business—not necessarily what is legal or illegal. Ethical behavior is the responsibility of everyone in an organization, from front-line employees to senior executives. Unethical behavior can occur at any level of a business and may include falsifying or concealing information, misusing Read More…
Forms of Business Ownership A key first step for any entrepreneur is choosing the right form of business ownership. The four major forms of business organization are sole proprietorships, partnerships, limited liability companies (LLCs), and corporations. Each offers different advantages and disadvantages related to liability, taxation, financing, control, and government regulation. Other forms of ownership, Read More…
Management Theories and How They Are Used When holding a job, there are usually certain people that have specific “titles” that describe the work that they do. With those titles, comes the chain of command, which can be looked at as a flow chart: The CEO –> who oversees Management –> who oversees Associates. As Read More…
What’s Your Leadership Style? Leading and directing are important management functions, but usually do not appear in the main job description. A great manager needs to be able to both lead their team and direct their operations – failing either of these roles is a recipe for disaster. Leading vs Directing To understand how managers Read More…
Centralized and Decentralized Management Explained When a company starts to grow, one of the biggest questions they face is how to organize their management. The two main branches of management roles are centralized and decentralized authority. Companies usually fall somewhere between these extremes. Centralized Management Centralized management is the organizational structure where a small handful Read More…
How to Plan for Business Success Planning is an important management function because it helps businesses prepare for both short-term and long-term opportunities and challenges. Effective planning is guided by a company’s core values, mission, vision, and core competencies, which influence decision making, resource allocation, and long-term strategy. Planning also helps businesses respond to changing Read More…
Comparative Advantage is the concept where one person, business, or economy is able to outproduce one particular product or service compared to another person, business, or economy.
The “Gross Domestic Product” of a country is the total value of all finished goods and services that were produced in a given year. In other words, this is the total economic output. GDP is used to measure the total size of an economy, and therefore how much the economy has grown (or shrunk) in a year.
Risk is one of the most important concepts in investing, economics, and personal finance. Our appetite for, or aversion to, risk is the biggest driver behind spend and save decisions. Despite this, very few people really understand just how big a role risk plays in our everyday lives.
Property rights is the foundation of all free-enterprise economic systems. It is what allows people to profit from capital and ideas, without fear of seizure by the government or theft.
The government has two main ways it tries to influence the economy – through Fiscal Policy and Monetary Policy. Fiscal policy is the more direct approach, where the government levies taxes and subsidies to try to balance its budget while encouraging growth, while monetary policy is less direct – tweaking interest rates and modifying the money supply.
International Trade is the system under which businesses, individuals, and governments trade goods and services. This exchange from many different National economies is what makes up the Global economy.
Inflation: how much less a dollar is worth next year compared to today. Most consumers hate inflation – it erodes your savings, and eats away at the real benefits you get from increasing income. However, inflation plays a necessary role in the economy, and without it much of the economy would quickly fall apart.
Government Impact on the Economy As a society with a market-based economy, the government has three broad mandates: On the face, only one of these implies direct intervention in the economy, but all three are interconnected with the economy as a whole. This means every action taken by the government will have some impact on Read More…
Government spending makes up a whopping 20% of all spending in the American economy, including the salaries of all government employees, government contracts to private companies, and military spending. This is all paid for by taxes, meaning more than 1/3 of all economic activity filters through the public sector in some way.
This means government taxing and spending will have a huge impact on the rest of the economy, and so the way people and businesses are taxed, and how the money is spent, is centered on how it impacts the rest of the economy. The way the government organizes these taxes and spending to influence the economy is called the Fiscal Policy.
The “Time Value of Money” is one of the most important concepts in economics, investing, and business. For individuals, this determines how much you save and spend. For businesses, it determines how quickly they try to expand. For investors, it decides the mix of a portfolio.
In Economics, “Demand” is the relationship between prices and how much people want to buy a good or service.
In Economics, “Supply” means the relationship between prices and production. In general, the higher the market price of a good or service is, the more producers are willing to sell of it.
How is Money Created? In the United States (and many other countries), the question “How is money created?” comes up a lot. The treasury isn’t just printing cash all day, if they were the government debt would be zero! In the US, money is created as a form of debt. Banks create loans for people Read More…
Cottage Industry, or the “Putting Out System” is a production system of producing goods that relies on producing goods, or parts of goods, by craftsmen at home, or small workshops, instead of large factories.
“Unemployment” is a major economic indicator measuring how much of the working population is currently looking for a job. The unemployment rate is the most “tangible” economic indicator – if GDP is going up or down, it is harder for people to notice in their day-to-day lives. When the unemployment rate goes up, it usually means you or someone you know lost their job recently, which puts a great strain on individuals.
“Specialization” is when a labor force begins to divide total production, leading to a rise of experts or specialists. This is called the Division of Labor, and it typically results in much higher productivity of labor.
Scarcity refers to the fact that resources are finite – people and organizations need to allocate their finite resources between their infinite wants.
“Opportunity Cost” is what needs to be given up to get something. This is different from an item’s price.
Everyone knows about costs and benefits of doing something – the pros and cons of making a choice. Marginal benefit and marginal cost are different – they look more closely at doing slightly more or less of different alternatives. Marginal costs and benefits are extremely important to producers when choosing their inputs and prices.
“Labor” is how much a person works. It is the use of time and exertion of effort to produce something of value. Generally speaking, the more valuable a person’s labor is, the higher their wage.
Interest rates are growth rates – it is a percentage that is used to calculate how much a loan or investment grows over time.
In Economics, an “Externality” is a benefit or cost that is not reflected in the price of a good or service.
An Entrepreneur is someone who takes a risk to start a new business. Nearly every business that exists (apart those created as spin-offs of other businesses, or by government intervention) was started by one or several entrepreneurs, who took a risk to launch a new company.
“Economics” is often called the Dismal Science – it studies the trade-offs between making choices. The purpose of economics is to look at the different incentives, assets, and choices facing people, businesses, schools, and governments, and see if there is any way to improve outcomes.
Economic Incentives includes anything that pushes people, businesses, and governments to do one thing or another. This includes what products you buy, what career you choose, what products businesses produce, and what government programs are put in place.
Economic Growth means that the economy is growing. More goods and services are being produced and consumed than they were before. The most common measurement of economic growth is the Gross Domestic Product (or GDP), which measures the total number of finished goods and services produced in an economy in a year.
Types of Companies Have you ever wanted to start a business? Maybe you want to know the difference between a lemonade stand and Minute-Maid, besides just the size of the companies. Different types of companies have different levels of liability (meaning level of responsibility) for the owner or owners. What this means is that the more liability Read More…
“Competition” is when many producers try to sell similar goods to the same set of consumers. The producers need to “compete” to try to attract more consumers, usually by lowering prices, offering better versions of the goods or services, or through marketing.
Major Economic Indicators (GDP, CPI, Jobs) Definition “Major Economic Indicators” are numbers that you can look at to try to get a picture of how well the economy is doing. Different indicators measure different parts of the economy, but their main characteristic is that they measure the same thing in the same way over time. This Read More…