8 Things You Need to Know about Money before You Reach 25 ...

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COMMENT

Money is complex.

From getting that very first bit of pocket money and having to choose between the sweeties to saving up for your first car or balancing the books at uni, there is nothing else that's so vital to master.

It's not helped by the fact that there are very few places to reliably learn about money, and making mistakes with it can be expensive!

Worry not, though.

Here are the things that everyone should know about money before they hit 25 – make sure you’ve got them all down, and you should be okay.

1. 50/30/20

Have you heard of the 50/30/20 rule?

It means that you should spend 50% of your salary on essentials, like rent, insurance and bills, 30% on groceries, entertainment and anything else that is non-essential, and 20% should go into your savings.

It’s a little idealistic, because it presumes that it’s possible to find somewhere to live that doesn’t take most of your money, and that your insurance is cheap, and that your bills are predictable.

It’s definitely something to aim for, though.

You can’t beat it, if you can get there.

2. Certificate of Deposit

Do you know what a Certificate of Deposit is?

Or a CD, as it’s commonly called in the finance world?

It’s a saving method that everyone should know about.2

In short, you give the bank some savings, which you then cannot access for a set period.

By lending the bank this money, you make a profit.

The amount of profit that you’ll make will depend on how much money you can “lend”, and how long you can lock it in for, but it’s worth it even for small amounts.

3. Picking a Reward

Need a credit card?

It’s not the end of the world, but you need to pick one that suits you.

Most cards have a reward scheme, which helps you to actually benefit from using one.

Some offer rewards based on purchases, like groceries, and some are based on travel mileage or flights, or even a particular type of spending, like entertainment rewards.

Take a look and pick one that will actually benefit you.

If there isn’t one, see if you can find a card with a lower APR or other great offer to make it worthwhile.

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