4 Financial Literacy Tips from Target Alpha
Managing our own money and understanding how money works are more important than ever. Although more schools are offering financial education as a course, many students still lack financial literacy: the abilities to manage one’s earnings, understand money, and invest.
Recently, I had the honour of speaking to Aikeda Sayram, the CEO of the Target Alpha Stock Trading Competition, a student-led financial organization. Since 2013, the competition has been offering Canadian secondary students remarkable opportunities to learn about financial literacy. She said that the organization ultimately changed her perspective on the importance of youth financial literacy. To help with your finances, Aikeda and her team offers the following financial tips:
- Live within your means.
It is crucial to avoid outspending more than what you save or earn. However, this is easier said than done, especially when everyone seems to have the newest gadgets. By living within your means, you can save some money, for an emergency fund that you could one day need and depend upon for survival.
- Make a budget and set goals.
By creating a detailed budget outlining an estimation of your expenses and income, you will have a better idea of how much you can spend without going overboard. Set specific financial goals every month. Write down your budget and goals because research has shown that writing them down encourages follow-through.
Some amazing free apps to help you track your spending by type, location, and month include BillGuard, Dollarbird, Fudget and Mint. In particular, BillGuard and Mint allows the user to connect his or her credit account directly to the app so no manual input is required. Additionally, both can flag suspicious charges on your bills.
- Invest! Invest! Invest!
Investing a small part of your income into a stock or guaranteed investment certificate (GIC) with interest can grow your savings and help you prepare for the rainy days or even retirement. For example, one family invested a dollar a day since the day their child was born and by the time their child reached 65, the child had $4 million!
If you are interested in learning more about investing, consider joining Target Alpha, which employs many channels and a variety of activities such as a simulated stock market and a stock pitch competition to teach students about financial literacy. Target Alpha has operating chapters in Alberta, British Columbia, and Ontario with specially designed investment clubs.
Target Alpha runs an inter-school stock pitch competition, in which students manages a stock portfolio in a stock market simulator. Students attempt to surpass the original amount of money given. During the school year, some provinces choose to have a stock pitch conference in which students prepare a 15-minute pitch to the judge as to why he or she should invest in a certain stock. This stock pitch conference includes an elaborate awards ceremony where students are recognized for their efforts, progress, and accomplishments.
- Start building your credit.
One day, you might want a car or a house, and your credit will determine how likely the bank will loan you money. By using a credit card responsibly (ie. paying the bills on time and spending wisely), your credit rating will reflect all of your hard work moj link. Building a great credit score takes at least six months. To get a great score, you need to keep your credit card debt low and to make your payments in full and on time.
In addition, try to keep a few bank accounts open for as long as possible, so the length of your record accumulates.
Image Credit: Negative Space