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Net Worth: Know Your Value

Net Worth: Know Your Value

Net Worth = Assets (what you own) – Liabilities (what you owe).

Have you ever been lost in the middle of shopping mall? If you’re like me and you refuse to ask for directions, you probably look for one of those stands with a map of the mall, but let’s be honest: those are usually just as hard to find. Anyway, you get there, you look at the map, and you find the store you want to go to, but what must you first figure out? Where are you? To get where you want to go, you must first figure out where you presently are. Knowing where you stand will help you better prepare for your future. That is exactly how net worth works in terms of your journey to financial freedom.

Your net worth is a snapshot of current financial health or condition. You cannot become financially free until you have a handle on where you are and what you are doing right now. Even more, understanding that very simple number will allow you to see the value in not spending hard earned money on yet another item that doesn’t truly add value (i.e. net worth). So how exactly do you figure out yours? It’s very simple. Assets-Liabilities = Net worth.

The Steps:

First, determine the value of your assets. Assets include any retirement accounts, investment accounts, homes, vehicles, and more. If it has true monetary value, you can include it. To some people, this may be the hardest part of the equation. You may have purchased an item at one price, but that was years ago and the value has definitely changed. If possible, try to find or calculate the current market value of your assets.

Next, determine the total amount of your liabilities. Liabilities are your total debt balances. This includes your mortgage, auto loans, student loans, credit card debts, etc. It may be daunting, but get all these numbers together and add them up. Don’t freak out. It can look kind of scary all together, but remember: each debt still has its own due date, interest rate, and minimum payment. You’ll be fine.

Finally, subtract the two numbers. There you have it. That is your total net worth. Note: If you are married, you can do these same calculations to determine the net worth of your total household. Now, you may be asking yourself “What in the world am I supposed to do with this number now?” My answer: Reflect on it.

Create a Goal

Financially speaking, where do you want to be in five years? Ten? Twenty? This is where you need to start. Take a look at your net worth and decide where you would like it to be. According to the Federal Reserve, the average net worth for families in the U.S. under the age of 35 was $76,200 in 2016 (Intuit Inc.). Take a look at these averages based on age to see where you stand. Are you ahead or do you need to start making major moves forward? That answer doesn’t truly matter. Just do what you need to do to get where you want to be.

Remember, your net worth is just a snapshot of your financial health based on your outstanding debts. Sure, it is difficult to save more and spend less when there are so many things we need and want, but the difficulty gets wiped out when you set a real goal. One big motivator is seeing positive results; this is where knowing your net worth can help. Download an app, like Mint, that keeps track of your net worth by tracking all of your accounts, including your retirement accounts. Watching the amount grow due to improved decision will encourage you to make more of those better decisions.

In the meantime, see how we impart this important lesson on our students here. It is never too early, or too late, to start thinking about your net worth. Together, you and your child can understand the importance of net worth and get started on the journey to financial freedom.

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Online Shopping: The Right Way

Online Shopping: The Right Way

Let’s face it. Times are changing. More and more people are opting to shop online rather than in-store these days. Whether it’s beauty products, clothing, shoes, or even groceries, there is a way to order whatever you are in the market for online. However, so many of us aren’t taking advantage of what could be a great situation.

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What Your Teen Needs to Know

What Your Teen Needs to Know

If your teen is anything like most teens, you’re probably losing a lot of money to V-Bucks and new, trendy clothes, these days. Also, if they are like most of their peers, they know very little about the important financial concepts that are extremely relevant to them right now. Since it wasn’t too long ago that I was in their shoes, I’m hoping to help bridge the gap.

Here are SIX things that your teen needs to know RIGHT NOW:

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Finance can be Fun… Honestly

Finance can be Fun… Honestly

I can remember being in elementary school worried about opening a bank account, in middle school thinking about my first job, and in high school concerned about my credit score. That, alone, should tell you that my views on financial literacy have always been a bit… unusual, (more…)

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3 Ways to Avoid Student Loan Debt

3 Ways to Avoid Student Loan Debt

3 Ways to Avoid Student Loan Debt

In 2016, Consumer Reports found that over 42 million Americans were in debt due to student loans, a debt that totaled to $1.3 trillion. This year, that debt has grown to $1.56 trillion, affecting 45 million people across the country. Examining the numbers, you may be led to believe that there is no way to avoid student loan debt! With the constant pressure and growing competition students, and with public funding falling for federal financial aid, many are forced to take out tens or hundreds of thousands of dollars in student loans that they are then saddled with for life. However, some students are taking extreme action to avoid student loan debt, including joining the U.S. military or working multiple jobs to stay afloat.
 

Though it has become increasingly difficult for students to stay away from falling into the student loan trap, it is not impossible to get a degree debt-free. Here are three ways to avoid student loan debt.

 

1. Earn as many scholarships as possible.

One way to ensure your student can afford a bright academic future is through merit-based scholarships. Programs like the Georgia HOPE scholarship exist in order to reward students for their exceptional performance in high school. The HOPE scholarship offers up to $1800 per semester for students graduating with a minimum 3.0 GPA. All 50 states offer financial assistance to high academic achievers, so encourage your student to study hard! Some students may even qualify for scholarships for reasons as simple as ethnicity or gender. For more information, check out StudentScholarships.org, the largest database of scholarships on the web. There are thousands of opportunities listed. You can even type in a custom search to narrow down the options and find the perfect fit.
 

2. Get college credit before graduating high school.

Almost all high schools in the U.S. offer AP, IB, dual enrollment, or early admissions opportunities to students. It is highly recommended that students take advantage of these courses whenever possible. With AP and IB courses, students must pass both the class itself and the end-of-year exam in order to receive college credit. Dual enrollment and early admissions involve students taking some or all of their courses for the semester free of charge at a local college, receiving credit for both their high school and college requirements. All of these provide a great option for high-achieving students looking to impress a college admissions board and save money on expensive courses.
 

3. Work for a company that offers tuition reimbursement. 

More and more businesses are beginning to understand the value of higher education, offering scholarships or tuition assistance to their employees. For example, Publix offers up to $12,800 in tuition assistance to those who have been employed with the grocery chain for at least six months, while UPS offers up to $25,000 in educational aid to its part-time employees. Before deciding on a company, be sure to research where they stand with tuition reimbursement. Already have a job? Ask a manager. You just may be in luck!
 
One important factor to remember is that the resources are out there– You just have to look. There are numerous websites that offer information on scholarships, grants, and other aid. In fact, we offer workshops on many different topics to help students out, as well! With a host of programs coming soon, please be sure to join the mailing list below so that you won’t miss out!
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