Be aware:

• Deposit account interest rates and fees vary between different financial institutions, market conditions, and competition
• Inflation can erode the value of savings if the interest rate < the inflation rate

Statistics:

• 46% of adults have enough emergency savings to cover three months of expenses
• 33% of adults have more money in credit card debt than in emergency savings 

Employer-driven accounts provide an incentive to save, and employers will often match your contributions

• Roth IRA: Contributions are made with after-tax dollars, and withdrawals are tax-free. Max out your Roth IRA every year that you are able to do so.
• 401(k): contribute a percentage of your income, pre-tax, and pay taxes once you withdraw 
• 403(b) (sometimes called a Thrift Plan): for tax-exempt organizations like public schools, religious institutions, and nonprofits, similar to a 401(k)
• Flexible Savings Accounts (FSAs): pretax benefit accounts to set aside money for healthcare or other specific expenses
• Automated savings plans and employer matches to reduce stress related to saving

There are different kinds of savings accounts, which have their own benefits and drawbacks, including the following: 

• Standard: lower fees and lower interest rates, most accessible option
• Money Market: combines some features of both savings and checking accounts, offers more competitive interest rates, higher minimum balance requirements
• Certificates of Deposit (CDs): deposit your money for a fixed term in exchange for a fixed interest rate, face penalties if you withdraw your money early

Additional resources: 

Compound interest calculator

FinTok: Vivian Tu

FinTok: Humphrey Yang

Investing: expending money with the expectation of achieving a profit or material result by putting it into financial plans, shares, or property, or by using it to develop a commercial venture.

Be aware:

• Decisions about investing in individual stocks usually come down to an individual's risk tolerance - Riskier assets can equal a higher rate of return, but can also equal a higher loss.
• Financial technology/automatic trading platforms such as Robinhood can be dangerous, daytrading stocks is more akin to online gambling than it is to genuine investing 
• “Investing” in crypto is more akin to gambling (playing games of chance for money) than investing in the traditional sense

Statistics: 

• ~60% of adults have money in the stock market
• However, ownership is not evenly distributed across generations: Baby boomers own ~55% of all US stocks, while Gen X owns ~26% and millennials own only ~2.5%

Additional resources:

https://buildyourstax.com/ 

Warren Buffett interview - a 3-minute video on the power of index funds

Statistics:

• The average American credit score as of 2024 was 715, and is rising over time

Being a good credit card user

• Interest compounds monthly (you don’t pay interest on your original balance but rather the new balance with last month’s interest added on, so each month increases more than the last) 
• Be careful of the number of credit cards you hold! Companies will draw you in with offers of low fees, and this can quickly escalate into your getting into deep debt on multiple cards. Commit to a debit card, through your checking account, and one additional commercial credit card.

Borrowers can compare the cost of credit cards using the Annual Percentage Rate (APR)

• APR is the combined total of the money you borrow, in addition to interest incurred and any other fees the card may charge. Beware: APRs are often in the 25-30% range, even though the companies will try to lure you in with low introductory rates!

Mortgages

• Fixed rate: interest rate is set at the beginning of the loan and does not change over time, but may be higher than the initial rate of an adjustable mortgage 
• Adjustable rate: interest rate starts lower than a fixed rate often would, but with the potential to increase over time and is less predictable.
• Refinancing mortgages is an option to reduce your rate of interest, but this often comes with additional fees and costs, so homeowners need to do the math to determine if it is worth it.
• Down payments: the initial payment towards a large asset like a house or car, when the rest of the balance is to be paid in a loan, demonstrates the buyer's commitment and reduces the lender's risk. When buying a home, typical down payments are in the 10-20% range of the total cost.

Additional resources: 

https://creditclash.com/game 

Money, Explained: Credit Cards

https://shadysam.com/ 

https://www.nfcc.org/ - A non-profit credit counseling agency may be an option for those already in debt 

Don’t just pay the minimums, pay your maximum

• Credit scores are escalators on the way up, but an elevator shaft on the way down, meaning that it takes a lot more time and effort to raise your score than it does for it to fall if a mistake is made
• A good credit score saves the most on larger purchases (house, car, etc) → also, employers can ask to see your credit history, so it becomes a metric of how trustworthy you are overall, not just financially

Be aware: 

• If you get a text, email, or phone call from your financial institution with links or describing an ‘issue’ with your account, do not respond. Call the financial institution directly and speak to a customer representative.
• Online transactions make you more vulnerable to fraud than in-person transactions
• Crypto scammers often create fake currencies or websites with no payback, “investing” in crypto is already a risk and this is even more so, if it sounds too good to be true, it probably is. 
• Catfishing is assuming a false identity, as a romantic partner or an employer, with a person in order to eventually ask them for money or other services
• Spam emails/texts/phone calls are also increasingly common. Block the numbers or emails when they appear to reduce the frequency 

Statistics:

• In 2023, over $10 billion was lost to fraud
• The most common type of fraud is imposter-based

Insurance basics:

• Some insurance types (like homeowners or car insurance) are required (homeowners, auto), but some are not, though they can still be beneficial
• Buying insurance depends on risk exposure vs the price of insurance coverage and individual characteristics/opinions
• Extended warranties and service contracts function similarly to insurance, but are usually unnecessary. Don’t fall prey to signing up for these.

Additional resources:

Cryptocurrency - NGPF

Money Explained, Gambling