Starting from our late teens and on, finance plays a huge role in our lives. For some of us, it starts by attending college, graduation, attending professional school, and then getting our dream career. For others, it may be a different path such as starting a business or starting a family. This is the bottom line; no matter which path life takes you to, finance will always play a huge role.
How Banking Works
To fully understand finance, the first thing everyone should know is how banking works. Understanding this can be complex, but it can definitely be explained in a step-by-step process. First, US banks lend money to individuals. The money will be given to individuals for various reasons, such as if an individual wants to start a business, buy a home, start college, or send their children to college.
When someone deposits money at the bank, that money goes into a large amount of money that the person already has and the amount of money that the person deposited is credited to their account. When a person withdraws money, money is subtracted from their account.
In the economy, banks make money by making loans. The Federal Reserve sets something called a reserve requirement and it is for banks that decide the amount of money the banks are permitted to give. There are many types of banks. The common types of banks are commercial banks (banks that provide services for businesses), savings banks (which are advised for lower-income workers to save their money), and credit unions (which were created by individuals who share a common bond.) This is mostly to lend loans for an emergency to people who couldn’t afford to borrow from traditional lenders.
Every bank has interest rates which are charges used for borrowing money. Interest rates are the bank’s way of making money and banks do this because the interest they charge is higher than the interest they deposit into their customer’s accounts. There are two common types of bank accounts:
- Checking Account: allow people to deposit and withdraw money often. After opening a checking account, individuals receive a checkbook and a bank card which allows them to purchase items and pay for other needs. Monthly fees for a checking account depend on the type of account a person has.
- Savings Account: used for long-term deposits with earning interest. Rates and interests depend on the bank individually.
This is an overview of how banks in the United States work.
The first step to being financially independent is to find a job. If your desired job requires you to go back to school, that is definitely possible, especially with institutions that offer online education and training training courses, or refresher courses. For instance, if you are interested in taking your AEMT refresher course online, you can do so whenever and however it works best for you. You could look for an online AEMT course at CareerCert. They offer education and training affordably.
If you have a different career planned in mind, search how you can get to that career in the most affordable way possible. There are definitely open possibilities.
Being Financially Stable for an Emergency
Emergencies can happen anytime. They are very uncertain. But even during emergencies, money plays a significant role in survival. If situations get tight, creative thinking is the key. To survive, one should definitely think practically and make the decision that’s best for them and their family. Creativity includes decisions such as selling old clothing and accessories or having a yard sale. Small things can lead to big steps. There are other ways to pay for an emergency. This knowledge could help you out in a big way when the unexpected happens.
Being Wise With Your Finances
Handling finances the right way is one of the common things most people struggle with. A lot of individuals don’t realize that what they’re spending their money on can be a waste. For instance, individuals sometimes tend to buy expensive clothes and shoes for their children. But little do they know that their children will eventually grow and the clothes won’t fit anymore. Children grow very fast; therefore, expensive clothes are definitely not a necessity. A wiser decision would be to save for their education. This is a simple example of how we tend to not be financially wise.
With just a little planning and forethought, you can be wise with your money and always have it when you need it. And isn’t that what we all want?