Three Basic Principles of Personal Finance | Mint Personal Finance Tips Video

Transcript

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-Everything in personal finance can
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be distilled to the three basic principles.
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So number one is just spend less than you earn,
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which essentially means save money.
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Number two is make the money you have work for you.
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So once you’ve saved it, invest it.
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Make sure that it grows.
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Make sure that you take advantage of compound interest.
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And number three is, once you’ve saved and invested, protect it,
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making sure you have an emergency fund.
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So there are a lot of people who write in and say that Mint
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has helped them get out of debt.
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They had 5, 10, 15 thousand dollars worth of debt.
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And simply by seeing where they were spending
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all of their money and what their interest rates were
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and finding potentially lower interest rates,
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they were able to pay off that debt,
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often within six months or a year.
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-My sister-in-law introduced me to mint.com
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and basically just told me about this really neat website
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and said, hey, you should log onto mint.com.
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It’ll really help you track your spending.
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It’s very user friendly, time efficient,
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and it’ll give you access to your accounts
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much faster than any other way that you could possibly
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get into your accounts.
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The feature I like most about mint.com
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is that it will categorize your spending for you
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and really detail exactly where your money is going.
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And before, I really didn’t have a very good idea
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of exactly where all of my money was going.
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So it was a really eye-opening experience
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once I started using mint.com.
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And I believe that it identified some areas
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that I needed to be a little bit more
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efficient in with my money.
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-Since the early 19th century, the stock market,
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although it’s taken a big dive this year,
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has returned an average of about 7% return.
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And so if you put about $200 a month
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in for the next five years and you were 25 or 30
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when you started on that, you’d have about a million dollars
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by the time you retire.
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-I want to make sure we’re saving money.
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And we can retire when we want to retire.
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We’ve got life plans that we’ve worked
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with financial professionals on.
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And this is just a great tool to help us realizie and achieve
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those goals.
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-It’s really opened my eyes to the importance of investments.
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And boy, it really showed me that I
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need to become a little bit more conscientious about my savings.
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-It gives us a GPS of where we are now
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and where we want to go in the future.
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And it provides us the tools to get there too.
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And it provides the tools that we
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can customize in our own way.
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It doesn’t tell us exactly how we need to get there,
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but it allows us to decide what we want to do in a fashion
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that we like.
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That’s really big for me.
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-You never know when you’re going to lose your job
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or get into a car accident or need
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medical help or some sort of procedure.
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So we recommend that people have an emergency fund.
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And we recommend if you’re in your twenties
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and you don’t have a house or too
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many other financial obligations, about 10 to 15
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thousand dollars.
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And if you’re a little bit older, if you have a family,
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if you have a house, if job loss would be an even greater burden
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on you financially, you probably want $30,000 or more.
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And the last advice on preparing for the unexpected is only 29%
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of renters actually have renter’s insurance,
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even though you can get it for about $150 a year.
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And so, even if you’re paying that for five or 10 years,
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it’s going to be less than the cost of replacing
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a computer or a couch or your belongings
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if they’re lost, stolen, or damaged in a fire.
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