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Most schools don’t emphasize personal finance enough in their curriculums, which leads to first year college students making finance mistakes that will result in long-term consequences. Fortunately, colleges and universities offer personal finance courses to make up for the shortcoming of high schools. In these courses, you’ll learn about three primary areas of personal finance.

Build an Actionable Budget

Your first step is to create a monthly budget for your household, but you must ensure it’s a budget you can live by month to month. This means comparing your total income to your total monthly bills to ensure you can meet all of your expenses. You should also have a minimum of 10% left over each month as disposable income. This money should be devoted to paying off your debts one at a time. As one debt is paid off, that money can be directed towards another debt and so on until all of your debt has been eliminated.

Improve Your Credit Score

As you adjust to your new budget, it’s important to avoid miscalculating. You’ll need to pay all of your bills on time to ensure your credit rating will continue to improve. Even one late payment to a utility service can lead to a hit on your credit report that will cause your score to plummet. Making your payments on time and reducing your income to debt ratio by paying off your debts can help you build up a good rating.

Prepare For Your Future

Once you pay off your debts, you’ll have a larger amount of disposable cash, but don’t assume this is money you can spend hastily every month. Instead, it should be divided up between a high interest savings account and a retirement account. The savings account will help you prepare for household emergencies, unexpected medical care, and other financial emergencies. You can also use it for big ticket purchases rather than charging those purchases to your credit cards. Your retirement account will help you prepare for your future, providing you with resources to manage future medical care needs as well as helping you plan for your retirement years.

Even if you choose not to take a personal finance course, you can use these methods for developing a good financial profile for yourself. As you follow these practices, you’ll find that your improved standing will open up new possibilities to you. Lower interest rates, greater availability of credit, and the potential for a future of financial freedom all await when you make smarter money moves.