From an early age, personal finance has been one of my greatest passions. I love educating people on ways they can become more financially free, so I’ve put together a list of what I believe to be the most important things everyone at any age should know about money.


10 Things Everyone Should Know About Money


1. The importance of paying off your credit card every month

A lot of people are against credit cards and say use cash only. I am for them (for the reward purposes) if and only if you follow the strict rule of paying them 100% off every month. Paying interest on them is crazy. It’s throwing money away. If you don’t pay them off every month, it’s a sure-fire way of getting into a life of debt.


2. Having a good credit score makes life easier

Having a good credit score can make your life so much easier when it comes to getting a mortgage, an auto loan, even a job or an apartment. Take the necessary steps to build good credit. View and track your credit report at


3. Know the difference between assets and liabilities

Assets make you richer, liabilities make you poorer. Aim for more assets. Let’s use a camper for an example. If you buy a camper to only use once or twice a year for your family camping trips, that’s a big liability. You’re spending money, and it’s not repaying you in return. If on the other hand, you rent the camper out during the weeks that you’re not using it, that baby turns into an asset. Invest in assets, and if you must buy liabilities, look for opportunities to turn them into assets.


4. Online savings accounts offer higher interest rates

Online banks are able to offer you higher returns on your money because they have lower costs due to the fact that they don’t have physical branches. While you may find that your local community bank offers you only around 0.10% APY on your savings account, online banks may offer you as much as 1.10% APY. That’s over 10x higher in this case! Some online banks you may have heard of include Ally Bank, GE Capital, American Express Personal Savings, My Savings Direct, CIT Bank, Synchrony Bank, Barclays, and Discover Bank.


5. You must live below your means in order accumulate wealth

Living below your means, simply put, means spending less than what you make. You should have money left over every month for saving or investing. Living paycheck to paycheck is not fun. Live a simple life and don’t try to keep up with the Jones’s because, quite often, the Jones’s are broke. Buy what you need, and be grateful for what you have.


6. The advantages of employer matching retirement plans

If your employer offers a company match retirement program, such as a 401(k) or SIMPLE IRA, take advantage of it. They are giving you free money. You may not want to have the money taken out of your paycheck now, but you will be happy you did later.


7. The benefits of investing in a Roth IRA

The money that you put into a Roth IRA has already been taxed. It cannot be taxed again. This means all the money that you take out upon retirement (age 59.5), even the gains, is tax-free. This rule is super beneficial, especially if you are in a lower tax bracket now than you expect to be when you retire.


8. Passive income is the best income

Passive income is defined as money that is received on a regular basis with little or no effort. In some scenarios, there may be a lot of effort upfront, making it not so passive in the beginning, but the work load fades over time. Some examples of passive income include stock or mutual fund dividends, rental property income, royalties from book publishing or patents, or affiliate marketing. Let your money work for you and create a stream of passive income.


9. Regular small expenses really add up

Are you aware of just how much you spend in a day/week/month? Do you account for the daily coffee and muffin that you might be buying? These are just a couple of the little expenses that add up to astonishing amounts over time. David Bach, author of The Automatic Millionaire, coined the phrase “The Latte Factor®,” which lays out the high cost of the regular small purchases we make. Using The Latte Factor® Calculator, by David Bach, I calculated that by cutting $3 a day from spending, and investing that money instead with an annual interest rate of 5%, over the course of 15 years, you would have $24,809.


10. Paying down principal can save you a lot of money in the long run

If you have a mortgage or auto loan, paying more than what you owe each month can save you a lot of money in the end. Even an extra $20 principal payment is well worth it. The dollar amount that goes to interest will be lower, and your loan will be paid off sooner.