Feel like you don't know much about money? You’re not alone. According to a recent George Washington University study, 24% of millennials have just basic financial knowledge, and only 27% are seeking professional financial advice on saving and investment.
Here are four common money questions, along with some straightforward answers.
How Do I Create a Budget?
Whether using paper and pen or an online budget option, creating a budget is easy.
First, add up your total monthly household income. Second, add up your total monthly expenses, including:
- Rent or mortgage fees
- Heat, water and any other utility costs
- Loan payments
- Auto, home, health, life, and any other insurance payments
- Childcare or child-related expenses
- Grocery and other shopping expenses
- Transportation costs (public transit or gas)
- Retirement, children's education, and other savings contributions
- Any other regular monthly payments
Subtract your expenses from your income to see how much you have left each month. Setting a budget shows you how much you spend monthly and where you may overspend. Sticking to a budget can help you meet financial goals like saving for the future or paying down debt.
How Much Should I Have in an Emergency Fund?
An emergency fund is money you save to cover future unexpected expenses such as car repairs, medical bills, or even your regular bills if you lose your job. Your emergency fund should have at least enough money to cover 3 months of your living expenses.
Remember, you are in charge of your own financial future. Learn everything you can about savings, investments, and credit so you can make better financial decisions going forward.
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