Personal Finance in Your 20s & 30s For Dummies book cover

Personal Finance in Your 20s & 30s For Dummies

By: Eric Tyson Published: 06-02-2021

The money lessons you wish you’d learned in school

Personal Finance in Your 20s & 30s For Dummies helps Millennials and Zoomers like you make smart financial moves. It’s not as tough as it looks to reduce and file your taxes, pay off your student debt, buy a home, keep a budget to save and invest wisely, or start that side hustle, just to name a few. With a little bit of focus, you can start a clear path to financial freedom and avoid mistakes today. Your future self will thank you.

This edition is full of updates for the 2020s; wrap your mind around your investment opportunities, the realities of making a second income, higher ed options for career advancement, and lessons learned from the COVID-19 pandemic. If you’re in need of financial guidance—and who isn’t?—this is the book you need.

  • Pay off loans, manage your credit, begin the home-buying journey, and more
  • Set realistic money goals so you can create a solid path for financial success
  • Make smart decisions to beef up your bank account and investment portfolio
  • Protect the money you have today and learn how to put your money to work for the future

Get ready to turn up the volume on your financial know-how and stop worrying about money!

Articles From Personal Finance in Your 20s & 30s For Dummies

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36 results
36 results
Personal Finance in Your 20s and 30s For Dummies Cheat Sheet

Cheat Sheet / Updated 03-10-2022

Everyone needs to know how to manage their money. Having that knowledge and know-how early in your life pays bigger dividends over the decades of your adult life. And everyone makes mistakes, so Personal Finance in Your 20s and 30s For Dummies can help you minimize bad decisions and maximize good ones.

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Personal Finance in Your 20s and 30s: Types of Banks

Article / Updated 08-12-2021

Nowadays, there are multiple avenues to choose from when it comes to picking a bank. Are you more of a local, national, or digital type of customer? Find the benefits to each option below. Online banks Although traditional banks with walk-in branch locations are shrinking in number because of closures, consolidations, and some failures, online banking is growing — and for good reason. One of the biggest expenses of operating a traditional retail bank is the cost of the real estate and the related costs of the branch. Online banks generally don't have any or many retail branches and conduct their business mostly over the Internet and through the mail. By lowering their costs of doing business, the best online banks may offer better account terms, such as paying you higher interest rates on your account balances. Online banks can also offer better terms on loans. (The only downside? No lobby means no basket of free lollipops.) Online banking is convenient, too — you can conduct most transactions more quickly on the Internet, and by banking online, you save the bank money, which enables the bank to offer you better account terms. And because online banking is generally available 24/7, you don't need to rush out at lunchtime to make it to your bank during its limited open hours. (Note: Traditional brick-and-mortar banks now generally offer many online services.) According to a recent customer ratings' summary done by Consumer Reports, the highest-rated online banks are (in order, starting with the highest rated): USAA, Schwab Bank, Everbank, Discover Bank, Ally Bank, State Farm Bank, Capital One 360, and E-Trade Bank. Brick-and-mortar banks The most obvious choice for banking is using a local bank you pass by on a regular basis. Although these types of banks are conveniently located, these banks may not be the most cost efficient. You can find two main types of brick-and-mortar banks: Small-town bank: These banks only have a handful of branches. Some of the tellers may even remember your name and face. Hours are generally limited, and you may face extra ATM fees for using ATMs that aren't at one of the bank's branches. A sometimes attractive, "small-town" banking option is credit unions. To join, you generally need to work for a particular employer (such as General Electric) or industry/occupation (for example, teachers). Thanks to a federal government exemption on income taxes, credit unions tend to be able to pay higher interest rates on deposits and charge lower rates on loans. Don't assume, however, that a local credit union always has the best deals; be sure to comparison shop. To locate credit unions near you, visit the Credit Union National Association (CUNA) website for consumers and click on the "Find a Credit Union" link or call them at 800-356-9655. Big banks: Such banks tend to be regional, national, and sometimes even multinational. You may recognize their name from extensive advertising campaigns. They tend to have extensive ATM networks, which may reduce your ATM fees, but you pay for it in other ways, such as through less-competitive terms (interest rate paid, service fees levied) on checking and savings accounts. Be sure to comparison shop among several banks and scrutinize their fees and interest rates on their checking accounts and any other type of account you may be interested in.

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Exploring Entrepreneurial Options in Your 20s and 30s

Article / Updated 02-20-2018

Small business has generated more wealth than investing in the stock market or real estate. You can invest in small business by starting a business yourself, buying an existing business, or investing in someone else's small business. The following sections give you an overview in doing so. Starting a small business When you have self-discipline and a product or service you can sell, starting your own business can be both profitable and fulfilling. Before you start, consider the following: Determine what skills and expertise you possess that you can use in your business. You don't need a unique idea or invention to start a small business. Begin exploring your idea by first developing a written business plan. Such a plan should detail your product or service, how you're going to market it, your potential customers and competitors, and the economics of the business, including the start-up costs. Of all the small-business investment options, starting your own business involves the most work. Although you can do this work on a part-time basis in the beginning, most people end up running their business full time — it's your new job. In most people's eyes, starting a new business is the riskiest of all small-business investment options. But if you're going into a business that uses your skills and expertise, the risk isn't nearly as great as you may think. Many businesses can be started with little cash by leveraging your existing skills and expertise. You can build a valuable company and job if you have the time to devote to it. To begin your own business, check out the latest edition of Small Business For Dummies (Wiley). Purchasing a small business If you don't have a specific product or service you want to sell but you're skilled at managing and improving the operations of a company, buying a small business may be for you. Finding and buying a good small business takes time and patience, so devote at least several months to the search. You may also need to enlist financial and legal advisors to help inspect the company, look over its financial statements, and hammer out a contract. Good businesses don't come cheap. If the business is a success, the current owner has already removed the start-up risk from the business, so the price of the business should be at a premium to reflect this lack of risk. When you have the money to buy an established business and you have the skills to run it, consider going this route. Although you don't have to go through the riskier start-up period if you buy a small business, you'll likely need more capital to buy an established enterprise. You'll also need to be able to deal with stickier personnel and management issues. The organization's history and the way it works will predate your ownership of the business. If you don't like making hard decisions, firing people who don't fit with your plans, and getting people to change the way they do things, buying an existing business likely isn't for you. Some people perceive buying an existing business as being safer than starting a new one. Buying someone else's business can actually be riskier. You're likely to shell out far more money upfront, in the form of a down payment. If you don't have the ability to run the business and it does poorly, you have more to lose financially. In addition, the business may be for sale for a reason — it may not be very profitable, it may be in decline, or it may generally be a pain in the neck to operate. Investing in a small business If you don't want the day-to-day headaches of being directly responsible for owning and managing a business but you do like the idea of profiting from a successful one, then investing in someone else's small business may be for you. Although this route may seem easier, few people are actually cut out to be investors in other people's businesses. The reason: Finding and analyzing opportunities isn't easy. Are you astute at evaluating corporate financial statements and business strategies? Investing in a small, privately held company has much in common with investing in a publicly traded firm (as is the case when you buy stock), but it also has these differences: Private firms aren't required to produce comprehensive, audited financial statements that adhere to certain accounting principles. Thus, you have a greater risk of not having sufficient or accurate information when evaluating a small, private firm. Unearthing private, small-business investing opportunities is harder. The best private companies that are seeking investors generally don't advertise. Instead, they find prospective investors by networking with people such as business advisors. You can increase your chances of finding private companies to invest in by speaking with tax, legal, and financial advisors who work with small businesses. You can also find interesting opportunities through your own contacts or your experience within a given industry. Consider investing in someone else's business only if you can afford to lose all of what you invest. Also, you should have sufficient assets so that whatever money you invest in small, privately held companies represents only a small portion (20 percent or less) of your total financial assets.

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10 Things to Know About Apps in Your 20s and 30s

Article / Updated 02-06-2018

At the risk of starting with the very basics, apps are to smartphones what software is to personal computers. As you spend more time on smartphones, more programs — known as apps — are being developed to run on your phone. Most apps are offered by large companies as another option for their customers to be in touch with and interact with what they offer. The financial institutions that you do business with — banks, mutual fund companies, brokerage firms, and so on — are a common example. Following is some advice for how to make the most out of apps and sidestep common app pitfalls and problems. You may well get what you paid for with "free" apps Though they haven't gotten the attention that computer viruses, computer malware, and computer ransomware attacks have garnered, similar problems have arisen with smartphone apps. The worst of the lot can end up tracking and spying on you. Some are a scam and/or some sort of virus or malware. In addition to those issues, you should also check out the background and agenda of any company offering a financial app and how it may be making money from the app. Most apps are nothing more than glorified advertising from the company behind the app. Sure, they may dangle something seemingly helpful (for example, offering a free credit score, stock quotes, and so on), but ultimately you should uncover what their agenda and reputation is. Many free credit score apps, for example, make money from affiliate fees from credit cards they pitch you. Do your homework and research an app before downloading and beginning to use it. Check with more than one independent source and read independent reviews, especially those that are critical and less than flattering. And stay far, far away from the many apps that claim they can show you how to make big bucks doing very little from the comfort of your own home. Conduct and manage financial tasks You can use apps to do more and more tasks that previously needed to be done online and through a regular computer. The dizzying pace of technological change continues as many smartphones function as mini-computers in your hand. The best apps can help you perform common financial tasks such as Getting better value when shopping for a specific product or service Tracking where you're spending money weekly and monthly Checking your banking account balance Doing basic investment research Although some apps are provided free of charge by companies that are seeking to promote their own services, others charge modest fees (like a software company does) because the app is all they are selling. Use apps only from legitimate companies with lengthy track records You will notice that most of the companies recommended in this chapter are fairly large companies with lengthy track records of success. For sure, technology is disrupting and changing many industries and companies. But, that doesn't mean that you should only do business with firms that exist solely online, in the cloud, and so on. Research the history of companies that you are considering doing business with. When seeking the link for a mobile app, get that link and download the app from the company's website so you're sure you are getting their actual app rather than a knock-off or a fraudulent one. Consider the alternatives to an app Before downloading and using an app, you should question the need for it and consider the alternatives. Remember that the company behind the app wants to tie you to it so you'll buy more and spend more with them. Is that your goal? You likely have your phone with you all the time. Do you really want this app running and in your face all the time? Maybe, maybe not — think about it and examine the alternatives. Keep focused on your spending Some folks need and want extra help and hand-holding when it comes to licking the problem of overspending or simply feeling on top of where their money goes and doing something constructive about it. Many websites and related apps purport to address this problem but in reality have massive conflicts of interest through the kickbacks (affiliate relationships) they have with companies that they direct business to. Advertising is also a common problem. There are some apps that to date have overcome these problems, but things can change, so don't take my current recommendation in this space as a forever endorsement. That said, the Goodbudget app is simple and practical. The basic version provides you with up to one year of expense-tracking history in ten main categories (envelopes). There is also a paid or premium version ($45 per year), which provides up to five years of expense tracking with unlimited categories as well as email support. Start with the free version and then deciding in the future whether an upgrade is worth your while. Be leery of apps that have you store your credit-card information in the app (for example, games, iTunes, and so on) so you can automatically charge purchases. For some folks, this can quickly lead to overspending. Settle up with friends but beware fees Going out with friends or doing other activities often involves spending money. So long as you can afford these outings and you're hitting your savings targets and goals, great! Regardless, though, make sure everyone is paying her share. Sometimes you may have to cover for someone who is low on cash or left his wallet at home. Other times, one of your friends can help you out. Apps like Venmo, Square Cash, Gmail/Google Wallet, and PayPal can help you get paid and allow you to pay others to whom you may owe money. Pay close attention to possible fees, especially when using a credit card. Venmo, for example, hits you with a 2.9 percent fee on credit-card transactions but doesn't charge a fee for other transactions, including usage of debit cards. PayPal has no fees on direct money transfers but does charge for debit and credit-card transactions. Save money on commonly purchased items Some apps are simply designed to save you money. GasBuddy, for example, will show you the price for gasoline at various service stations in a local area. It's free for consumers to use. Especially when going on lengthy car trips, car tolls can add up quickly. Tollsmart Toll Calculator is a low-cost app that enables you to compare toll costs for alternative routes. The Waze app can help with navigating traffic. Somebody should really combine a navigation app with the information from a toll app so that drivers can select routes that save time and money! CamelCamelCamel is a price tracker that scans items on Amazon, shows you their price history, and sends you alerts when a product you're interested in drops in price. PriceGrabber scans items everywhere online, although its website is much easier to use than its app. Tap into the latest economic and financial data The St. Louis Fed's signature economic database — FRED, which stands for Federal Reserve Economic Database — is accessible through an app. Here's a rare case where you can have a wealth of data on the economy and financial markets at your fingertips and never be bombarded with ads or plugs to buy things. Invest with confidence Of course, many banks, investment companies, brokers, and so on have apps. So if you have a favorite investment firm or bank, check out what it offers. For its broad array of cost-effective funds with solid long-term performance, I use Vanguard's app. Just because you have an app that gives you 24/7 access to your accounts and financial market data doesn't mean you should obsessively follow these things. Doing so will likely make you a worse investor.

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Getting Your Career Going in Your 20s and 30s

Article / Updated 02-06-2018

As you transition from school to the workforce, you can maximize your chances for financial and career success. This article discusses arranging your finances and making decisions to further invest in your education and training. Putting everything in order If you just graduated from school, or you're otherwise in the your early years in the workforce, your increased income and reduction in educational expenses are probably a welcome relief to you and your family — but they're no guarantee of future financial success. Here's how to start on the path to financial success when you first enter the job market: Avoid consumer credit. The use and abuse of consumer credit can cause long-term financial pain and hardship. Shun making purchases on credit cards that you can't pay for in full when the bill arrives. Here's the simple solution for running up outstanding credit-card balances: Don't carry a credit card. If you need the convenience of making purchases with a piece of plastic, get a debit card. Get in the habit of saving and investing. I'm often asked, "At what age should a person start saving?" To me, that's similar to asking at what age you should start brushing your teeth. Well, when you have teeth to brush! You should start saving and investing money from your first paycheck. Try saving 5 percent of every paycheck, and then eventually increase your savings rate to 10 percent. Ideally, you should put your savings into retirement accounts (through an automatic deduction) that offer tax benefits, unless you want to accumulate down-payment money for a home or small-business purchase. (You're probably not thinking about buying a new home or retiring, though, if you're just entering the job market.) If you're having trouble saving money, track your spending and make cutbacks as needed. Get insured. When you're young and healthy, imagining yourself feeling otherwise may be difficult. But because accidents and unexpected illnesses can strike at any age, forgoing health insurance coverage can be financially devastating. When you're in your first full-time job with limited benefits, buying disability coverage, which replaces income lost because of a long-term disability, is also wise. And as you begin to build your assets, make a will so your assets go where you want them to in the event of your untimely passing. Educating and training your way to career success The Bureau of Labor Statistics has data that clearly demonstrates that the more education a person has, the more money the person makes and the less likely the person is to be unemployed (see the most recent full year's data and chart here). Now, you must be careful applying group data to your own situation, because assuming that more education is always better would be inaccurate. But the data clearly shows that more education is generally better, as it enhances your employability and income-earning potential and reduces your chances of being unemployed. Investing in your career Plenty of people succeed in their careers. What do they have in common? They invest in their careers, and you can and should do the same. Some time-tested, proven ways to do that include Networking: Some people wait to network until they've been laid off or are really hungry to change jobs. Take an interest in what others do for a living and you'll benefit and grow from the experience, even if you choose to stay with your current employer or in your chosen field. Online services like LinkedIn enable you to network and see what jobs you may qualify for. Making sure you keep growing: Whether it's reading high-quality books or other publications, taking some night courses, or listening to good podcasts, find ways to build on your knowledge base. Considering the risk in the status quo: Many folks are resistant to change and get anxious thinking about what could go wrong when taking a new risk.

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Seek Value for Your Education Dollars

Article / Updated 02-06-2018

You and your family probably don't have an unlimited supply of money to spend on furthering your education and training. So, just as with buying anything else — computers, clothing, and so on — you should look for value when spending your education dollars. Value means getting the most (quality) for your money Keep the following pointers in mind to ensure you get value for your educational dollars: Realize that you don't always get what you pay for. Just because you spend more for education doesn't mean that you'll get better quality than something costing less. For example, the best state colleges and universities offer better value to in-state residents than do some private colleges and universities. Look beyond sticker prices. Because of the availability of financial aid, including grants and scholarships you don't have to pay back, you can't simply compare the sticker price of various schools and assume that the price is your actual cost. Apply to a range of schools, apply for aid, and then compare your bottom-line cost at each school. Be careful when examining rankings of colleges and which colleges' graduates earn the most. Lots of data and rankings on the best colleges and universities are available. One challenge when evaluating such data is that many of the highest-rated schools are private and quite expensive, and they selectively admit the most qualified candidates. So their graduates tend to earn more. Be sure to compare what each school provides and what each costs after factoring in financial aid awards. Consider employer assistance. Check out what education assistance your employer may offer. Just be sure that it makes sense for you and your career to stay with that employer for whatever additional time may be required. If you have specific fields of work in mind, research what education and training best prepares you. Talk to folks currently in those fields and consider training programs as well as technical training programs where appropriate. Considering a liberal arts education and alternatives First it's helpful to define what is generally meant by a "liberal arts education." My alma mater, Yale University, defines a liberal arts education as one that teaches students to think critically and express themselves clearly. Yale asserts that a liberal arts education is a solid foundation for all professions and can help students lead successful and meaningful lives. That sounds all well and good, and for some people, a liberal arts education may be a good fit. But for others, in our increasingly competitive global economy, I think there are some potentially better alternatives to consider. Also, please keep in mind that many folks like myself, who attended the leading liberal arts colleges and universities, end up going on to graduate school for advanced degrees, for example in business, law, medicine, and so forth. For some folks, a liberal arts degree can be a significant waste of time and money. Trade or technical schools (including community colleges) can provide specific training in particular areas such as automotive technology, carpentry, computer-aided drafting and design, computer information systems, or manufacturing technology, or prepare you to become a dental technician, medical assistant, nurse, paramedic, or physical therapist. Solid technical training has the advantage of providing skills that should lead to jobs upon graduation. The counterargument to getting technical training is that you're more limited in the range of work you can potentially be considered qualified to perform. And what if, for example, you are trained to be an auto mechanic and then end up hating the actual work after a few years of employment? Also examine the various surveys that are done from time to time identifying occupations where the demand for new workers is exceeding the supply of such workers. For those who like to think opportunistically, consider the recent analysis done by The Conference Board that shows future labor shortages that are expected to cluster around three major occupational groups: "Health-related occupations: The same aging of the U.S. population that will curtail working-age population growth to as low as 0.15 percent by 2030 is also driving up demand for medical workers. At the same time, high education and experience requirements limit entry into the job market. The result is a dearth in many healthcare professions, including occupational therapy assistants, physical therapists and therapist assistants, nurse practitioners and midwives, and dental hygienists. Among doctors, optometrists and podiatrists are the specialists most at risk of shortage, with the general physicians and surgeons category not far behind." "Skilled labor occupations: These jobs typically require more than a high-school education, but not a bachelor's degree. Unlike healthcare, the primary driver of shortages here is not increased demand — employment growth is expected to be low in the coming decade — but instead a rapidly shrinking supply of young people entering these fields as increasing numbers retire. Skilled labor occupations most at risk include water and wastewater treatment plant and system operators, crane and tower operators, transportation inspectors, and construction and building inspectors." "STEM occupations: U.S. policymakers have long been concerned about shortages in science, technology, engineering, and mathematics (STEM), but many of these fields rank surprisingly average in a national context. Moderating the risk of shortages is the relatively high number of young entrants compared to baby-boomer retirees, as well as the large proportion of new immigrants in STEM jobs. Moreover, strong productivity growth means that output will continue to expand in areas like information technology, telecommunications, and high-tech manufacturing even as workforces in these jobs are expected to shrink. Nevertheless, certain STEM fields — including mathematical science; information security; and civil, environmental, biomedical, and agricultural engineering — do face significant shortages." Learning the world's number one universal language: Business Everyone can benefit from gaining background about business. It's the universal language of the workplace. Even if you want to work for a nonprofit, you should understand concepts such as revenues, customer acquisition and service, marketing, expenses, financial statements, and so on. If you've already completed your college degree or are attending a college that doesn't offer business courses, don't despair. You can learn about the world and language of business in numerous other ways: During the summers of your latter years of college and immediately after, go to work in business. Find the best organizations that you can, work hard, and be a sponge, soaking up all you can. Read the best business books and publications, especially those on small business and entrepreneurship if that's what you're most interested in. Among books that I recommend are those written by James C. Collins, my Small Business For Dummies (coauthored with Jim Schell and published by Wiley), the classic How to Win Friends & Influence People by Dale Carnegie (Pocket Books), The Greatest Salesman in the World by Og Mandino (Bantam), and How to Win at the Sport of Business by Mark Cuban (Diversion Publishing). Inc. Magazine is a monthly publication that has lots of worthwhile content, in print and on their website. Take some free or very-low-cost online business courses from leading colleges and universities. You can do this through Coursera (which offers online courses from top universities like Northwestern, Stanford, the University of Pennsylvania's Wharton School, and Yale), EdX, MIT's OpenCourseWare, and Udacity. Also check out the short courses/videos offered by the U.S. Small Business Administration. Watch the best business television shows. Among those worth checking out are Shark Tank and The Profit. If you're willing to spend money and want to take courses online, check out those offered by some of the leading online colleges, institutes, and universities (such as Kaplan and University of Maryland).

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Changing Jobs or Careers in Your 20s or 30s

Article / Updated 02-06-2018

During your adult life, you'll almost surely change jobs — perhaps several times a decade. Hopefully most of the time you change jobs by your own choice. But in today's increasingly global and rapidly changing economy, job security isn't great. Downsizing has affected even the most talented workers. Always be prepared for a job change. No matter how happy you are in your current job, knowing that your world won't fall apart if you're not working tomorrow can give you an added sense of security and encourage openness to possibility. Whether you change your job by choice or necessity, the following financial maneuvers can help ease the transition: Keep your spending lean. Spending less than you earn always makes good financial sense, but if you're approaching a possible job change, spending less is even more important, particularly if you're entering a new field or starting your own company and you expect a short-term income dip. Many people view a lifestyle of thriftiness as restrictive, but ultimately, those thrifty habits can give you more freedom to do what you want to do. Keep an emergency reserve fund. You should have a "rainy day" fund to deal with emergencies and the inevitable curveballs that life throws your way. Keep it in a money market fund or savings account, and it should cover at least three months' worth of living expenses. Evaluate the total financial picture when relocating. At some point in your career, you may have the option of relocating. But don't call the moving company until you understand the financial consequences of such a move. You can't simply compare salaries and benefits between the two jobs. You also need to compare the cost of living between the two areas, which includes housing, commuting, state income and property taxes, food, utilities, and all the other major expenditure categories. There are various cost-of-living calculators online that enable you to compare different locations. Track your job-search expenses for tax purposes. If you're seeking a new job in your current (or recently current) field of work, your job-search expenses may be tax-deductible, even if you don't get a specific job you desire. If you're moving into a new career, your job-search expenses aren't tax-deductible.

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The Young and the Unemployed

Article / Updated 02-06-2018

Your job search may play out like a daytime drama, which is no surprise if you're having a difficult time finding a job. But being unemployed means you need to be especially concerned with your personal finances. The following sections point out why unemployment strikes younger people harder and what you can do during this rough time. Understanding how joblessness can hit younger adults harder During the severe recession from 2007–2009, high unemployment rates were all over the news as the unemployment rate surpassed 10 percent in the United States. But that double-digit level of joblessness paled in comparison to the high level of unemployment for young people, especially those who were less well educated. Despite the multi-year expansion that the U.S. economy has enjoyed since 2009, the youngest adults (those under 25) have continued to have higher levels of unemployment than the rest of the working adult population. Adults without a high-school diploma have an unemployment rate far greater than the average, followed by high-school graduates who have no college experience. College graduates have by far the lowest unemployment rate. (The following figure helps you understand the rate of unemployment and average weekly earnings based on education level.) The typical out-of-work person tends to be young and not well educated. Although you can't do anything about your age, you can do something about your education. Accessing unemployment benefits If you're laid off and unemployed, you should collect unemployment benefits if you're eligible. You must be actively seeking employment and meet any other eligibility requirements in your state. The simplest way to find the state unemployment insurance office nearest you is to visit this website and click Unemployment Benefits on the home page. CareerOneStop operates this site — a U.S. Department of Labor–sponsored website that provides "career resources and workforce information to job seekers, students, businesses, and workforce professionals to foster talent development in a global economy." Unemployment benefits are provided at the state level, and each state has its own program. If you're turned down for benefits, be sure to clarify why, and don't be shy about appealing the decision if you feel there's a chance you may get approved if you're able to furnish more information. Taking action to stay on top of your finances when unemployed You can make the most of your finances and be best prepared to handle life's challenges if you stay on top of your financial affairs. That said, losing one's job often comes as a surprise and presents some unusual stresses. Here are some tips to keep in mind if you lose your job: Batten down the hatches. Evaluating and slashing your current level of spending may be necessary. Everything should be fair game, from how much you spend on housing to how often you eat out to where you do your grocery shopping. Avoid at all costs the temptation to maintain your level of spending by accumulating consumer debt. Work at your job search a few hours daily but not on a full-time basis. Searching for a job is hard work and creates stress for most people. You're probably not going to make the most of your job search by making it your full-time endeavor. Make some calls; arrange some appointments; send some résumés; and do some research on industries, companies, and organizations of interest every day. But I suggest doing so for no more than four to six hours per day. If you can find part-time or temporary work, spend some time doing that to earn some money and to break up the monotony of looking for work. Try to exercise regularly. Exercise clears the head and lifts your mood. Daily exercise is best, but if that's not possible, try to get some exercise at least every other day. Eat healthfully. As with exercise, eating a balanced and nutritious diet can go a long way toward maximizing your mental (and physical) health and outlook.

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Personal Finance in Your 20s and 30s: Brick-and-Mortar Banks

Article / Updated 02-06-2018

The most obvious choice for banking is using a local bank you pass by on a regular basis. Although these types of banks are conveniently located, these banks may not be the most cost efficient. You can find two main types of brick-and-mortar banks: Small-town bank: These banks only have a handful of branches. Some of the tellers may even remember your name and face. Hours are generally limited, and you may face extra ATM fees for using ATMs that aren't at one of the bank's branches. A sometimes attractive, "small-town" banking option is credit unions. To join, you generally need to work for a particular employer (such as General Electric) or industry/occupation (for example, teachers). Thanks to a federal government exemption on income taxes, credit unions tend to be able to pay higher interest rates on deposits and charge lower rates on loans. Don't assume, however, that a local credit union always has the best deals; be sure to comparison shop. To locate credit unions near you, visit the Credit Union National Association website for consumers and click on the "Find a Credit Union" link or call them at 800-356-9655. Big banks: Such banks tend to be regional, national, and sometimes even multinational. You may recognize their name from extensive advertising campaigns. They tend to have extensive ATM networks, which may reduce your ATM fees, but you pay for it in other ways, such as through less-competitive terms (interest rate paid, service fees levied) on checking and savings accounts. Be sure to comparison shop among several banks and scrutinize their fees and interest rates on their checking accounts and any other type of account you may be interested in.

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Personal Finance in Your 20s and 30s: Your Bank Account Options

Article / Updated 02-06-2018

No matter what type of bank you choose, make sure you have a firm grasp of the different account options. Doing so requires thinking about your banking needs and what's important to you and what's not. The following sections identify how you can protect your moolah with different accounts and access your money when you need it. Transaction accounts Whether it's paying monthly bills or having something in your wallet to make purchases with at retail stores, everyone needs the ability to conduct transactions. Two of the most common types of transaction accounts are checking accounts and credit cards. Checking accounts The most fundamental of bank accounts, a checking account enables you to pay bills (by check or electronic payments) and deposit money from your job (including through direct deposit). Interest paid is generally low or nonexistent, and you need to watch out for various fees. During periods of low interest rates, the fees levied on a transaction account, such as a checking account, should be of greater concern to you than the interest paid on account balances. After all, you shouldn't be keeping lots of extra cash in a checking account; you have better options for that. Debit cards are excellent transaction cards. They connect to your checking account, thus eliminating the need for you to carry around excess cash. They carry a Visa or MasterCard logo and are widely accepted by merchants for purchases and for obtaining cash from your checking account. Unlike a credit card, debit cards have no credit feature, so you can't spend money that you don't have. Because of bank regulations, bank customers must give their permission/consent in advance for overdraft protection and the associated fee from a debit-card transaction. (Check and electronic bill payments go through as they always have and can lead to an account being overdrawn.) However, you can rack up overdraft fees if your bank processes debit-card transactions that lead to your account being overdrawn. Credit cards These transaction cards, which are offered by banks with either the Visa or MasterCard logo, enable you to make purchases and pay for them over time if you so choose. (Discover and American Express also offer their own credit cards.) The credit feature enables you to spend money you don't have and carry a debt balance from month to month. Notwithstanding the lower short-term interest rates some cards charge to lure new customers, the reality is that borrowing on credit cards is expensive — usually to the tune of about 16 percent. The smart way to use such a card is to pay the bill in full each month and avoid these high interest charges. Options for getting cash You need a firm understanding of the different features of the transaction accounts your bank offers so you can easily access your cash. You may think choosing a bank that has a large ATM network is your best option, but think again. One reason that bank customers have gotten lousy terms on their accounts is that they gravitate toward larger banks and their extensive ATM networks so they can easily get cash when they need it. These ATM networks (and the often-associated bank branches) are costly for banks to maintain. So, you pay higher fees and get lower yields when you're the customer of a bank with a large ATM network — especially a bank that does tons of advertising. Do you really need to carry a lot of cash and have access to a large ATM network? Probably not. A debit card is likely the better option for most people since these cards are so widely accepted by retailers and other product and service sellers. Savings accounts Savings accounts are accounts for holding spare cash in order to earn some interest. Banks and credit unions generally pay higher interest rates on savings account balances than they do on checking account balances. But savings account interest rates have often lagged behind the rates of the best money market funds offered by mutual fund companies and brokerage firms. Online banking is changing that dynamic, however, and now the best banks and credit unions offer competitive rates on savings accounts. The virtue of most savings accounts is that you can earn some interest yet have penalty-free access to your money. The investment doesn't fluctuate in value the way a bond does, and you don't have early-withdrawal penalties as you do with a certificate of deposit (CD).

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