Writing
Hi everyone! I just started learning about finance, and I want to show you what I’ve learned. Finance is not all about working a job and getting money. The money you get is called income, but the question is, what do you do with your income? Pretend you have $100, you have to pay $25 for taxes, now you have $75. Take $60 for your expenses, which are rent, insurance, food, and of course a little fun.
You’re at $15 now, this is where it gets tricky. Some people spend it all, and some people will use a credit card to double their money. They spend all the doubled money and have nothing left to pay with! As a kid, the smart thing to do is to invest your money. You could put some money in your 529, which saves for college. You can also put some in retirement, but you can only open it when you’re 65. Then there’s your General investments that help build your savings. They all grow while you’re sleeping. 529 and retirement both have tax advantage, so you don’t have to pay taxes on them, but general investment doesn’t, so you do have to pay taxes on it.
Ok, let’s learn some more about investments. In investments there are three ways for your money to grow by stocks, bonds, and dividends. Stocks are when you pay a company and get one share of it. Later, you can sell your share for more. Bonds are where you give a loan to someone (like the government or a company) and they will use the money to build something, that thing will make money and they will give you back more. Then there’s dividends. Dividends are when you have a share of a company’s money. The company gets more money than they need to build something. Then they give everyone who has a share of their company a little money.
If you save money like I just taught you, you will be ready for unexpected things. So if your car breaks down or you need a break from working to find a new job, your savings can pay for that. When you grow up, you’ll know exactly what to do with your money. I hope you enjoyed reading. See you next time!
