Financial Topics We Teach

Saving is the foundation of financial health. It means setting aside money now so you have it later, whether for emergencies, a goal, or retirement.

Why saving matters

Without savings, any unexpected expense, a car repair, a medical bill, a lost job, becomes a crisis. Savings give you options and protect you from predatory lenders who profit when people are desperate.

The emergency fund

Your first savings goal should be an emergency fund: 3–6 months of basic living expenses in a separate savings account you don't touch unless it's a real emergency.

Where to keep savings

• High-yield savings account (HYSA): Earns more interest than a standard savings account. Look for 4–5% APY at online banks.
• Regular savings account: Earns very little (often under 0.5%) but is safe and accessible.
• Money market account: Similar to HYSA, sometimes with check-writing privileges.

Savings vs. investing

Savings are for short-term needs and emergencies (low risk, accessible). Investing is for long-term goals, it carries more risk but higher potential returns. Build your emergency fund first, then think about investing.

A budget is a plan for your money. It tells your dollars where to go instead of wondering where they went.

The 50/30/20 rule

One simple budgeting framework divides your after-tax income into three categories:

• 50% Needs: Rent, groceries, utilities, transportation, minimum debt payments
• 30% Wants: Dining out, entertainment, subscriptions, shopping
• 20% Savings & debt payoff: Emergency fund, retirement, extra debt payments

How to track spending

• Use a free budgeting app (Mint, YNAB, or your bank's built-in tools)
• Review your bank statements weekly
• Keep a simple spreadsheet if apps aren't your thing

Common budget mistakes

• Forgetting irregular expenses (annual fees, car registration)
• Not accounting for "fun", deprivation budgets fail
• Making the budget but never checking it

Interest is the cost of borrowing money, or the reward for lending it (including to a bank via savings). Understanding interest is one of the most powerful things you can learn.

Simple vs. compound interest

Simple interest is calculated only on your original amount (the principal). Compound interest is calculated on the principal plus all the interest already earned, meaning your money grows faster and faster over time.

APR vs. APY

• APR (Annual Percentage Rate): The yearly cost of borrowing, including fees. Used for loans and credit cards.
• APY (Annual Percentage Yield): The actual return on savings, factoring in compounding. Always look for a high APY on savings accounts.

Basics of investing

Investing means putting money to work in assets (stocks, bonds, index funds) with the expectation it will grow. The key rules:

• Start early, time in the market beats timing the market
• Diversify, don't put all your eggs in one basket
• Low-cost index funds are great for beginners
• Never invest money you can't afford to lose short-term

Your credit score is a three-digit number (300–850) that lenders use to decide whether to lend you money and at what interest rate. A higher score saves you money. A lower score costs you money.

What makes up your credit score

• Payment history (35%): Do you pay on time? This is the biggest factor.
• Amounts owed / utilization (30%): How much of your available credit are you using? Keep it under 30%.
• Length of credit history (15%): Older accounts help.
• Credit mix (10%): Having different types of credit (cards, loans) can help.
• New credit inquiries (10%): Applying for many new accounts at once can lower your score temporarily.

How to build credit from scratch

• Open a secured credit card (you deposit money as collateral)
• Become an authorized user on a parent or guardian's card
• Pay your bills on time, every time
• Keep balances low relative to your limit

Predatory lenders specifically target people who are financially stressed or lack financial knowledge. They profit from trapping borrowers in cycles of debt. Knowing their tactics is your best defense.

Payday loans

A payday loan is a small, short-term loan due on your next payday. They're marketed as "quick cash", but the fees are enormous.

Other predatory products to avoid

• Rent-to-own stores: You pay 2–4x the item's value over time. Better to save up and buy outright.
• Car title loans: You put your car up as collateral. Miss a payment and they can take it.
• "No credit check" loans: Often come with extremely high interest rates.
• Buy Now Pay Later (BNPL) abuse: Fine for planned purchases, dangerous when used for everyday spending.

Safer alternatives when you need cash fast

• Credit unions often offer small emergency loans at much lower rates
• Employer paycheck advances (no fees)
• Community assistance programs for utilities, food, and rent
• Negotiate a payment plan directly with who you owe

A bank account is one of the most important financial tools you can have. It keeps your money safe, helps you manage spending, and is often required to get paid or access other financial services.

Checking vs. savings accounts

• Checking account: Used for everyday spending, paying bills, and receiving direct deposits. Usually comes with a debit card. Not designed to earn interest.
• Savings account: Used to store money you don't plan to spend right away. Earns interest (look for high-yield options) and should be kept separate from spending money.

FDIC insurance

Money in FDIC-insured bank accounts is protected up to $250,000 per depositor, per bank, if the bank fails. Credit unions have similar protection through NCUA. This means your money is safe even if the bank goes under.

Fees to watch out for

• Monthly maintenance fees: Many banks charge $10–$15/month. Look for free checking accounts or banks that waive the fee with direct deposit.
• Overdraft fees: Charged when you spend more than your balance. Can be $30+ per transaction. Opt out of overdraft coverage or keep a small buffer.
• ATM fees: Using out-of-network ATMs can cost $3–$5 per withdrawal. Use your bank's network or choose a bank that reimburses ATM fees.
• Minimum balance fees: Some accounts require a minimum balance; falling below it triggers a fee.

How to choose a bank

• Look for no monthly fees or easy fee waivers
• Check ATM access in your area
• Compare savings account APY rates (online banks often pay 10–20x more)
• Consider credit unions, which are member-owned and often more community-friendly

Debt means borrowing money you owe back, usually with interest. Not all debt is bad, but managing it poorly can set you back for years. Understanding debt is essential to long-term financial health.

Good debt vs. bad debt

• Good debt (generally): Borrowing to invest in something that grows in value or increases your earning power, like a student loan for a degree or a mortgage on a home. Keep interest rates low.
• Bad debt (generally): Borrowing for things that lose value or just for spending, like a payday loan to buy groceries or credit card debt from impulse purchases at high APR.

Debt-to-income ratio (DTI)

Lenders use your DTI to decide if you can handle more debt. It's your total monthly debt payments divided by your gross monthly income. A DTI under 36% is generally healthy; above 43% may make it hard to get approved for loans.

Strategies for paying off debt

• Avalanche method: Pay minimums on all debts, then put extra money toward the highest-interest debt first. Saves the most money over time.
• Snowball method: Pay minimums on all debts, then put extra money toward the smallest balance first. Builds momentum with quick wins.
• Consolidation: Combine multiple debts into one lower-interest loan. Can simplify payments, but read the fine print.

When to seek help

If you're only making minimum payments and balances keep growing, or if debt is causing serious stress, reach out to a nonprofit credit counseling agency. Look for agencies accredited by the NFCC (National Foundation for Credit Counseling). They offer free or low-cost guidance.

Taxes fund public services, schools, roads, emergency services. As a working person, you'll pay income tax on your earnings. Understanding the basics helps you file correctly and keep more of what you earn.

Key forms to know

• W-4: You fill this out when you start a job. It tells your employer how much tax to withhold from each paycheck.
• W-2: Your employer sends this in January. It shows your total earnings and taxes withheld for the year. You need it to file.
• 1099: If you do freelance or gig work, you'll get this instead of a W-2.
• 1040: The main form you file with the IRS. Many people can file for free online.

How tax brackets work

The U.S. uses a progressive tax system, higher income is taxed at higher rates, but only on the amount above each threshold. You never pay the top rate on all your income.

Deductions and credits

• Deductions reduce your taxable income (e.g., student loan interest deduction).
• Credits directly reduce your tax bill, even more powerful. Look into the Earned Income Tax Credit (EITC) if your income qualifies.