How money-smart do you think you are? I have a few numbers for you that might be a wake-up call!
A new Harris Interactive poll finds that only half of high-school students surveyed got questions right on a simple quiz about basic economics. And adults fared only slightly better, with a quarter failing the quiz completely!
You don’t have to become a financial expert to be smart about money. According to MSN Money columnist Liz Pulliam Weston, you just need to read, stay informed and be diligent about following some simple money rules. Here are a few of her suggestions:
- Learn the difference between “wants” and “needs.” Aside from food, shelter and clothing, everything else is a choice. Making smart decisions on a regular basis is how you’ll come out ahead in the end.
- Every financial decision has a cost – and a payoff. Sure, college will cost you thousands of dollars, but people with a college degree make an average of 70% more over a lifetime than those without one.
- You need to understand the miracle of compound interest. Let's say I give you a penny today, and promise to double the amount every day for a full month. How much money would I be giving you on the 31st day? A whopping $10.7 million dollars!. Of course, no one’s going to double your money every day. But this concept explains how people who save relatively small amounts over the years can build substantial nest eggs.