SOURCE: Creditnet

Creditnet

September 12, 2014 14:05 ET

The Top 5 Financial Lessons to Learn at a Young Age, Announced by Creditnet.com

SEATTLE, WA--(Marketwired - Sep 12, 2014) -  If you want to secure a good financial future, it is important to develop good habits as early as possible. Even in childhood, people can begin to become very financially responsible by doing small jobs to earn money and putting all or most of the money they receive in a savings account. By the time they reach their 20s, the lessons are a bit more complex, especially for those who did not have a solid financial foundation to begin with. Young adulthood is the perfect time to learn these important financial lessons. Creditnet.com, a leading online authority for finances, has announced these top 5 lessons consumers should learn at a young age:

Building Up a Savings

It is never too early to start saving. In fact, due to compound interest, it is best to start as early as possible. A hundred dollars deposited in a savings account at the the age of 20 will be worth far more in the long run than a hundred dollars deposited at the age of 30. If you are able to put in a large amount, so much the better. For example, putting $10,000 in the bank when you're 20 will get you over $210,000 by the time you're 60. If you put the same amount in when you're 30, you'll only get about $160,000 at the age of 60. It may be difficult to think about the distant future at such a young age, but when it comes to retirement, many people wish that they had starting saving when they were much younger.

Saving at Regular Intervals

While it would be nice to put a large chunk of cash away in savings, most people don't have that kind of money lying around. Instead, the thing to do is to contribute to savings regularly. Commit to putting a set amount aside every month. At least a hundred dollars a month is an ideal amount. With dollar cost averaging, you can figure on a set amount a month. In many cases, you can have this money automatically withdrawn from your paychecks into your savings account so that it will accumulate almost without your noticing.

Avoiding Bad Debt and Securing Good Debt

Generally speaking, you should not buy anything that you can't pay for. It is all too easy to get into the habit of buying things on credit when you don't have the money to back it up. Unless you know for a fact that you can pay it off before it's due, you should not buy something with your credit card. Instead, you should learn to be frugal, avoiding unnecessary expenses like dinners out, magazine subscriptions and new clothes. You could wind up paying thousands of dollars in interest for piddly purchases. However, it can be a good idea to acquire debt for the sake of a large purchase such as a house. The key is to remember all of the expenses involved with a house beyond just the mortgage and not buy something out of your price range.

Getting Insurance Early

When you're young, it may seem silly to pay out a significant amount of money every month for something that you don't see benefiting you. However, it becomes harder and harder to get good insurance the older you get. You want to have a reliable policy in place so that when you need it, the insurance is available to you. If you don't pay for insurance early, you may end up having to pay a lot more later.

Being Financially Aware

Finally, it's important simply to treat your finances like a priority. You don't have to make a lot of money to be in fairly solid financial shape. As long as you plan ahead and make wise decisions regarding the funds you bring in and the ways that you spend it, you will have at least some tools to help you get ahead in a fiscally challenging world.

Money causes a lot of stress in people's lives, but that stress can be diminished if you get an early start on being financially responsible. Save as much as you can as often as you can, don't go into debt unless you absolutely have to, and buy insurance even if it doesn't seem necessary and you'll be ahead of the game.

About Creditnet:

Creditnet is an authority credit card comparison site that offers innovative comparison tools to help users find the best credit card for their needs. In addition, the Creditnet Credit Talk Forum is a community of over 100,000 members that discuss credit cards, credit, debt, and credit repair daily.

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