Navigating a clear course toward your financial security.

12 Principles of Personal Finance

We support New Hampshire's Jump$tart Coalition. The Coalition is a statewide, all volunteer, non-profit association dedicated to improving the personal financial literacy of children in the Granite State.  They devised this list of 12 principles of personal finance you should know, and share with your growing children.  Many graduate from high school without having any education regarding dealing with their finances once they enter college or go out on their own after graduation.  Discuss these with your children and make sure they understand.  It's very important for them to get a good start. 

1.  Know your take home pay.
Before committing to significant expenditures, estimate how much income is likely to be available for you.

2.  Pay yourself first
Before paying bills and other financial obligations, set aside an affordable amount each month in accounts designated for long-range goals and unexpected emergencies.

3.  Start saving at young age.
Recognize that your total savings are determined both by the interest you earn on those savings and the time period over which you save.

4.  Compare interest rates.
Obtain rate information from multiple financial services firms to get the best value for your money.

5.  Don't borrow what you can't repay.
Be a responsible borrower who repays as promised, showing you are worthy of getting credit in the future.

6.  Budget your money.
An annual budget to identify expected income and expenses, including savings, will help you live within your income.

7.  Money doubles by the "Rule of 72".
To determine how many years it will take your money to double, divide the interest rate into 72.

8.  High returns equal high risks.
Recognize that no one will pay you high interest rates on a sure thing.  Diversification of assets is the best protection against risk.

9.  Don't expect something for nothing.
If it sounds too good to be true, it probably is.

10.  Map your financial future.
Take time to list your financial goals, along with a realistic plan for achieving them.

11.  Your credit past is your credit future.
Be aware that credit bureaus maintain credit reports, which record borrowers' histories of repaying loans.  Negative information in credit reports can affect your ability to borrow at a later point.

12.   Stay insured.
Purchase insurance to avoid being wiped out by a financial loss, such as an illness or accident.

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