Financial Literacy Class - Come Out, Come Out, Where Ever You Are
Financial literacy is a class worth taking…if you can find a class on financial literacy that is. Out of all the Universities in America not one has a course on financial literacy. It’s funny, here we are in 2007, teaching facilities everywhere with kids on the inside, studying, with the ulitimate goal of graduating and making tons of money. But we never talk about money. In todays society it is almost taboo to bring it up. You probably don’t even talk about it at home. How do you expect to understand money if you are not allowed to talk about it.
Before you spend money, you have to understand money. Now lets say you are at a bar and for some reason a cute girl comes and sits down next to you. You look over and the two of you make eye contact, the dance begins. Trying to play it cool you order yourself a drink and tell the bar tender to refill the girls class. Now your drink just cost you 6 dollars and her drink taxed on another 10 dollars. In order to have paid for those drinks you had to earn 24 dollars. The reason for this is Taxes. Of course the amount of money taken out of your pay check is directly related to your income and which tax bracket you are in. But with the point being you have to understand an annual income of 40K a year does not mean you can spend 40K a year.
Below is an example of a typical college graduates struggle with money.
-Out of college lets say you land a entry level position at 40K a year job, after taxes you take home 30K a year which is 2,500 a month.
-Now that you have recently graduated the party ends quickly because you have 60K in college loans to pay. That’s $7,200 a year and $600 a month.
-Now you need a place to live so you rent a one bedroom studio for $9,600 a year, that’s $800 a month and that’s not including utilities which can be anywhere from $1,200 to $2,400 a year which is $100 to $200 a month. However we will average it out at $1,800 a year which is $150 a month. If you want Cable or Internet that could be another lets say $960 a year which comes to $80 a month.
-Lets say you like to eat at least two meals a day and live relitavely sanitary you will probably be spending close to, let me round as far down as I can, to$ 4,800 a year which is $400 a month.
-And we’ll just pray you don’t own a car with insurance or a cell phone.
-By the end of the year just simply from all your basic expenses you will be shelling out $24,360.
-So by the end of the year you are taking home $5,640 a year, that’s $470 a month, $117.50 a week, which is $16.78 a day. Which means you can spend seventy cents an hour and not be in debt at the end of the year.
Now I realize that not everyone is going to be in the same earning bracket and people that make more money might be saying; “Well that doesn’t refer to me.” But as many of our celebrity friends have learned that if you don’t understand money and you don’t save you are in just as much trouble as anyone. For instance if you are celebrity that makes $10 million a year but your expenses are 10 million dollars a year, the second your Songs, Movies or TV shows stop generating rating/revenue you would end up right back at square one. Which leads me to my last point. Pay Yourself First!! Always think of the future and where you wanna be five to ten years down the road.
Control is another big issue; you must have control. There’s no reason to let money take control of your life. Just make sure you don’t put yourself in a situation where you owe more money then you make. Try to save a little, it’ll help you in the long run. Trust me.
Tags: class, college graduates, financial literacy, loans, money, personal finance, school, student loans
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