Are Young People Learning the Financial Basics?

FinanceAs soon as a teen becomes a legal adult, he or she is personally responsible for their financial health and obligations. Some teens may still live at home with their parents and receive some financial support for a few additional months or years.

However, the individual may also be responsible for paying taxes, for paying all debts that he or she takes on and more. Many older adults have the benefit of life lessons to help them manage their finances, but these may have been difficult and expensive lessons to learn.

When young adults are able to learn these lessons from their school or a relative, they may be able to avoid the painful experiences of learning them through their own trial and error.

The Importance of an Emergency Fund

One of the hallmarks of financial health is an emergency fund. The money in an emergency fund could be used to help you avoid taking on unnecessary debt in the event of an unexpected situation.

For example, if you are sick for several weeks and are unable to work, you can use your emergency fund to pay your expenses. This can help you to avoid high interest title loans and other types of debt. Ultimately, an emergency fund can safeguard your finances. The more money that is available in your emergency fund, the greater the benefit can be.

If possible, fund your savings account substantially before you move out of your parents’ house.

The Need to Keep Debt Balances as Low as Possible

Another financial lesson that young adults need to learn relates to managing debt balances. When you are young, it is easy to think ahead about how you may have a much higher income level after you graduate from college.

You may think that you would have plenty of money to pay off credit card balances, student loans, auto loan and other debts at that time. However, when you borrow a substantial amount of money, your monthly debt payments can be burdensome. In some cases, these payments are so high that individuals are forced to live a much lower quality of life after graduation until the debts are paid off. Others may even be forced to file for bankruptcy and to deal with the long-term ramifications.

The Benefit of Living Beneath Your Means

Young adults should also learn more about how to live beneath their means and why it is important. The reality is that living beneath your means can help you to avoid falling heavily into debt. More than that, it can enable you to save and invest more money at a very early age. By doing so, you may take full advantage of the power of compounded interest, dividend reinvestments and more. Many people who dream of retiring early are only able to do so because they had the foresight to begin saving early in life.

While these financial lessons may seem fairly intuitive to older adults, these are common areas where young adults struggle. In fact, older adults may only understand the importance of these lessons through real-life experiences that have taught them the lessons the hard way. When young adults are educated in these and other areas, they can make savvy financial decisions that ultimately help them to enjoy great security in the years to come.

4 Things You Need to Know About Bitcoin

Bitcoin

The news is full of Bitcoin that has risen dramatically in the past few weeks. Satoshi Nakamoto, a ghost identity until now, released the bitcoin software in January, 2009 as an open source code. The value of Bitcoin fluctuates, quite unpredictably, which depends on how many currently own bitcoins and how much they are wanting to pay based on a peer-to-peer technology. As of 15th December, 2017, its value stands at $17,900. So, to get a clearer understanding of what it is,  you need to keep in mind the following simple points:

1) Irreversible Payments:

The transactions made using Bitcoins are irreversible. And if something goes wrong with the transaction, you may no one to blame at all, since there is no third party involved- no banks or governments. With such a risk, you have to be extremely sure about the people or organization you are meaning to do business with. But, you need not worry about typing in wrong address, because bitcoin is not going to allow you to send your money to an invalid address.

2) Private Keys:

The Bitcoin wallet can be used to send or receive coins. One or more private keys are saved in every bitcoin wallet file on the blockchain. You can withdraw your bitcoin anytime simply by importing the associated private keys using that wallet with the help of a backup.

3) Bitcoin Price:

The price of Bitcoin in terms of conventional currency, being volatile, can fluctuate significantly on a daily basis. Its price is determined by the means of supply and demand balance. Its price basically increases as more and more people start using it.  In early 2011 one Bitcoin was worth less than one USD, but in 2017 one Bitcoin is worth thousands of USD and tends to keep on increasing with increased demand.

4) Bitcoin is not anonymous:

As long as the transactions are stored publicly, anyone can have access to the Bitcoin address, the balance and other transaction information. You are safe as long as no links the pseudonym to you. But as soon someone links it you, your identity is no longer preserved. Sometimes, even when the transaction is hidden using some privacy protection like CoinJoin, there may be a possibility to make the link using information leaks, even including information such as the amount and time of the purchase.

The future for Bitcoin is uncertain, but there are good chances that it’ll evolve and one day, becomes a mainstream currency.