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7 financial questions every adult should know the answers to
7 financial questions every adult should know the answers to

Check how well you understand basic concepts related to personal budget and investment.

7 financial questions every adult should know the answers to
7 financial questions every adult should know the answers to

1. What is my budget made of?

It consists of income and expenses for a certain period, for example, a month or a year.

Costs can be divided into three categories:

  • the most necessary - payment for housing, utilities, food, medicines;
  • desires - a subscription to an online cinema, a gym membership and everything else, without which, in principle, you can live;
  • accumulation.

Keeping a personal budget helps you channel funds towards your financial goals and avoid spending too much.

2. How much to save for a rainy day?

Ideally, you should always have a financial safety cushion that will last for 3-6 months of your life. She will help out if you suddenly lose your job or become seriously ill.

If you can't save that much yet, try to have at least a smaller amount in stock, which is enough for unexpected expenses, such as fixing a car or buying medicines. The main thing is to postpone systematically.

3. What is interest capitalization?

When you put some money in the bank, interest is charged on it. This is your income. On a deposit with capitalization, this interest is periodically added to the initial amount, and next time interest is charged on the entire total. As a result, your income is higher than on a regular deposit.

4. What is credit history?

This is information about how many loans you have and how faithfully you repay the money. Looking at this data, banks decide whether to issue you a new loan. If history shows that you are a responsible person, you are more likely to get a loan, and you can even count on a lower interest on the loan.

If you have checked your credit history and found that it is not perfect, do not despair. It can be fixed. To do this, first of all, deposit the money on the loan on time, and also try not to have utility bills in arrears.

5. What is diversification?

This is an investment in various types of property, such as stocks, bonds and real estate. When the portfolio contains a variety of investments, the financial position is more stable. If some investments go bust, you will be left with income from others.

6. What is the difference between stocks, bonds and mutual funds?

When you buy a share, you become a shareholder of the company, in fact, a co-owner of it. By buying a bond, you turn into a lender - you lend money to the company or the government, hoping to get a fixed profit later. The amount of payments is usually known at the time of purchase of bonds, so they are considered a less risky investment. But their profitability is also lower than that of stocks. They are similar in that when you buy them, you hope for the success of the one who issued the stock or bonds, since your profit depends on it.

The third way to invest is a mutual investment fund (MIF). Such a fund is a portfolio of different investments in which you can buy a share (share). In this case, your income does not depend on the success or failure of one particular company, and specialists are engaged in operations with investments.

7. How much should I invest?

Everyone has different financial goals and different starting points, so there is no definite answer. It is generally advised to set aside or invest 20% of your annual income. If this is too much for you, start with a small amount, for example a couple of thousand rubles. You will practice choosing assets, master the basic tools. And when your income increases, it will be easier for you to invest more money.