What I Have Learned
The three most important things that I have learned in this class is the importance of saving, how to use credit cards wisely, and how to separate my wants from my needs. I have learned that things can happen in life and that it is very imporatant to have money saved up in case of a financial emergency so that I can bounce back easily. Setting money aside is a key factor in being financially sound. Using credit cards is something my parents have advised me to stay away from unless absolutely necessary. Before this class I told myself that I would never use a credit card unless it was an emergency, but through this class I have learned that credit cards are a necessary evil. I learned that it is alright to use a credit card as long as I have the money to pay back the amount at that exact time. I learned that credit cards help you to improve your credit score, which in turn helps you to receive lower interest rates for when you want to buy a car or a house. Sometimes setting aside my wants from my needs can be difficult at times ,but through this class I have learned to prioritize in my finances. I have become better at choosing to spend money on things that I need rather than things that I want. I know the concepts that I have learned in FIN 1050 will help me to be successful in my financial goals!
What Concept Have I Learned That I Will Use Most In My Life?
The concept that I learned in FIN 1050 and will probablly use the most in my life is budgeting. Setting a budget is something I will have to do if I am to be financially successful. In my everyday life I will need to use a budget to keep track of my savings and expenditures. Even now I have started to get into a habit of setting a budget each month so that I can see where my money is going and to control overspending in some areas when I need to save in others. Budgeting greatly helps me to sort out my needs from my wants and I will definately continue to use a budget for the rest of my life.
What Concept Will I Use The Least In My Life?
The concept I will use the least in my life is filing for bankruptcy. I learned that claiming bankruptcy is not great for your credit score or your financial success. I feel that I am responsible with my money and through this class and the example of my parents I have learned the importance of living within your means and not overspending. There are people who have to claim bankruptcy, but I have learned that it can be avoided. Hopefully I will never have to file for bankruptcy ,but I know that if I am careful and I don't pile up debt on loans and credit cards, that I will be successful in avoiding this type of a situation.
Positive and Negative Effects of Credit Cards and Other Consumer Loans
If you asked someone to think of the first word that comes to mind when asked about credit cards, chances are they would reply debt. Many times credit cards are associated with debt. But are credit cards and other consumer loans really all that bad? In fact they aren’t. Credit cards and loans have positive and negative effects when used responsibly or irresponsibly. Some of both the positive and negative effects include easy access and financial help, improvement of credit score with lower interest rates, and unfortunately debt is tied in with the negative effects. By learning about the different effects of using credit, different choices can be made to prevent you from entering a never ending hole of financial instability.
Easy access and financial help are both positive effects of credit cards and consumer loans. In a world today where purchases can be made with the swipe of a card, using credit cards can seem so easy. Credit does provide easy access and almost anyone can apply for a credit card. Consumer loans further help many people pay for different expenditures. Student loans provide help especially for poor college students trying to pay their way through school. As I move closer to moving out and going to college, I will probably need a student loan to help me pay for my college education, since my parents aren’t paying for my schooling. Credit cards and consumer loans help many in this way.
In addition, credit cards and consumer loans have another positive effect because they provide for a way to improve your credit score, which in return helps you to earn lower interest rates. As I have stated before credit cards are a necessary evil. Everyone must use a credit card to help them gain credit. As you use a credit card and pay back the borrowed amount, you earn credit. Consumer loans on the other hand usually have monthly payments that need to be paid. When you pay those monthly payments on time you gain credit that way as well. The more credit you earn through paying bills on time and paying them back in full, the lower interest rate you can receive when you want to take out a car loan or a mortgage for a home.
While there are positive effects of credit cards and consumer loans, there is always a negative effect to them as well. If not used responsibly credit cards and consumer loans can pile up debt and lower your credit score making it so you gain the higher interest rates. Debt can become so overwhelming at times if not controlled. If this debt isn’t paid off, collateral can be taken away or even in more serious cases bankruptcy is claimed and the home is sold to pay off some of those debts.
In conclusion credit cards and consumer loans have both positive and negative effects to them. Credit is necessary in our world today. It is best to use credit cards when you know you have the means to pay off the borrowed debt and consumer loans when you can make the payments. Build up of debt can cause major negative effects if not taken care of or controlled, but if you’re responsible with credit cards and loans then you can be sure to prevent yourself from entering financial instability and a life of stress.
