Youth Goals

Developing good financial habits is important for young adults as they start to establish their financial independence and build a solid foundation for their future. Some key financial habits that young adults should focus on include: 

• Creating a budget: A budget can help young adults track their income and expenses, and identify areas where they can cut back in order to save money. 
• Saving for the future: It's important for young adults to start saving for the future as soon as possible, whether it's for a down payment on a house, retirement, or other long-term financial goals. 
• Managing debt responsibly: If young adults do take on debt, such as student loans or credit card debt, it's important to manage it responsibly by paying bills on time and keeping balances low. 
• Building credit: Building a good credit score is important for young adults because it can affect their ability to get approved for credit and the terms of the credit they are offered. 
• Protecting their finances: Young adults should also take steps to protect their finances by avoiding scams, keeping their personal and financial information secure, and making sure they have insurance to protect against unexpected financial losses. 

By developing these good financial habits, young adults can set themselves up for a strong financial future and achieve their financial goals. 

The time value of money is the concept that money is worth more in the present than it is in the future, due to the fact that it can earn interest or be invested to generate additional income. This means that a dollar received today is worth more than a dollar received at a later date. 
 
For example, if you have the choice between receiving $100 today or $100 a year from now, the $100 received today is worth more because you have the opportunity to earn interest on it or invest it in order to generate additional income. 
 
The time value of money is an important concept for young adults to understand because it can help them make informed decisions about their finances. For example, if a young adult is considering taking out a loan, they should consider the time value of money when deciding whether to take a loan with a higher interest rate but shorter repayment term, or a loan with a lower interest rate but longer repayment term. 
 
Overall, understanding the time value of money can help young adults make smart financial decisions and plan for their financial future. 

If you are considering buying a car with a loan, it's important to understand the process and what it involves. Here are some things to keep in mind: 

• Determine your budget: Before you start shopping for a car, it's important to determine your budget and how much you can afford to borrow. You should consider factors such as your income, debts, and other financial obligations when determining how much you can afford to borrow. 
• Complete a loan application: To apply for a car loan, you will need to complete a loan application, which involves providing information such as your personal and financial details, employment history, and credit history. 
• Wait for approval: After you have submitted your loan application, My Credit Union will review it and determine whether to approve your loan. This process can take a few days to complete.  
• Sign the loan agreement: If your loan is approved, you will be required to sign a loan agreement, which outlines the terms of the loan, such as the interest rate, loan term, and any fees associated with the loan. 
• Make timely payments: Once you have the loan, it's important to make timely payments in order to avoid damaging your credit score and incurring additional fees. 

Overall, buying a car with a loan can be a convenient way to finance the purchase of a vehicle, but it's important to be informed and to use credit responsibly in order to avoid financial difficulties. 
 

Your debt-to-income ratio (DTI) is a measure of your financial health that compares your monthly debt payments to your monthly income. It is expressed as a percentage and is used by lenders to determine your ability to take on new debt. 
 
To calculate your DTI, you add up all of your monthly debt payments, including things like your mortgage or rent, car loan payments, student loan payments, and credit card payments. Then, you divide this total by your monthly gross income (income before taxes) and multiply it by 100 to express it as a percentage. 
 
For example, if your monthly debt payments total $1,000 and your monthly gross income is $4,000, your DTI would be 25%. This means that 25% of your income goes towards paying off your debt each month. 
 
It's important for young adults to understand their DTI because lenders use it to determine their ability to take on new debt. A lower DTI is generally considered to be better, as it means you have a lower burden of debt relative to your income. However, a high DTI can make it more difficult to get approved for credit or result in higher interest rates. 
 
Overall, it's important for young adults to manage their debt responsibly and aim to keep their DTI as low as possible in order to maintain a healthy financial situation. 
 

Collateral is something that you pledge as security for a loan. If you default on the loan, the lender has the right to take the collateral in order to recover the amount owed. 
 
For example, if you take out a mortgage to buy a house, the house itself is typically used as collateral for the loan. If you are unable to make your mortgage payments, the lender has the right to foreclose on the house in order to recover the money owed. 
 
Collateral can also be something else of value, such as a car or a piece of jewelry. In these cases, if you default on the loan, the lender has the right to seize the collateral in order to recover the money owed. 
 
It's important for young adults to understand collateral because it is often required when taking out loans or other forms of credit. Understanding the concept of collateral can help young adults make informed decisions about their financial commitments and can also help them protect their assets.
 

Protecting personally identifiable information (PII) is important for young adults because PII can be used to steal their identity and commit fraud. PII includes any information that can be used to identify an individual, such as their name, address, phone number, social security number, and date of birth. 
 
If a young adult's PII is compromised, it could be used to open credit accounts, take out loans, or make purchases in their name. This can result in significant financial damage and can take a lot of time and effort to resolve. 
 
In order to protect their PII, young adults should be cautious about sharing personal information online or over the phone, use strong passwords for their accounts, and regularly check their credit reports to ensure that their information is being used correctly. 
 
Overall, it's important for young adults to understand the importance of protecting their PII in order to safeguard their financial well-being and prevent identity theft. 
 

Young adults need to understand that credit is a tool that can be used to help them achieve their financial goals, but it is important to use credit responsibly. Some things that young adults should know about credit include: 

• Credit is not free money: When you use credit, you are borrowing money and will be expected to pay it back with interest. 
• Credit scores are important: Your credit score is a measure of your creditworthiness and is used by lenders to determine your eligibility for credit and the terms of the credit you are offered. A higher credit score can make it easier to get approved for credit and can also result in lower interest rates, which can save you money over time. 
• Credit can be used to build a positive credit history: By using credit responsibly, young adults can build a positive credit history, which can be beneficial when it comes time to apply for loans or other forms of credit in the future. 
• Credit cards can be a useful financial tool: Credit cards can be a convenient and secure way to make purchases and can also be a useful tool for building credit. However, it's important to choose a credit card that is right for your needs and to use it responsibly by paying your bills on time and keeping your balances low. 

Overall, it's important for young adults to educate themselves about credit and to use it responsibly in order to build a solid financial foundation and achieve their financial goals. 

Credit and debit are two different types of payment methods that young adults may use when making purchases or paying bills. Here is a brief overview of the differences between credit and debit: 

• Credit: Credit refers to a type of payment in which you borrow money from a lender, such as a bank or credit card company, to make a purchase. When you use credit, you will be required to pay back the borrowed amount, plus any interest, at a later date. Credit can be used to make purchases or withdraw cash at ATMs, and it is often available through credit cards or credit lines. 
• Debit: Debit refers to a type of payment in which you use your own money, rather than borrowing from a lender. When you use debit, the funds are transferred from your checking or savings account to pay for the purchase. Debit is often available through debit cards or ATM cards, and it is a convenient way to access your own money without carrying cash. 

It's important for young adults to understand the difference between credit and debit because they are different payment methods that have different implications for their finances. Credit can be a useful tool, but it's important to use it responsibly in order to avoid getting into debt. Debit, on the other hand, is a way to access your own money without incurring debt. 
 

Credit bureaus are important to young adults because they collect and maintain credit information on individuals, which is used to create credit reports and credit scores. Credit reports and credit scores are used by lenders to determine an individual's creditworthiness and the terms of the credit they are offered.  
 
For young adults, having a good credit score and credit history is important because it can affect their ability to get approved for credit and the terms of the credit they are offered. For example, a higher credit score may make it easier to get approved for a loan and can result in lower interest rates, which can save young adults money over time. On the other hand, a low credit score may make it more difficult to get approved for credit or result in higher interest rates. 
 
In addition, credit bureaus also maintain information on an individual's payment history, which can affect their credit score. For young adults, it's important to pay their bills on time and avoid defaulting on loans or credit card payments in order to maintain a good credit score. 
 
Overall, credit bureaus play a critical role in the credit process and are important for young adults to understand as they begin to build their credit history. 

 It is important for young adults to establish credit because a good credit history and credit score can have a significant impact on their financial future. A good credit score can make it easier for young adults to get approved for credit, such as loans or credit cards, and can also result in lower interest rates, which can save them money over time. MY CREDIT UNION offers a “share-secured” Visa product that is an excellent way to establish credit (and improve your credit score).  

It is important for young adults to check their credit report annually for several reasons: 

• To ensure accuracy: Credit reports can sometimes contain errors, such as incorrect account balances or payments that were not recorded properly. By checking your credit report annually, you can catch any errors and dispute them with the credit bureau in order to have them corrected. 
• To monitor for fraudulent activity: Checking your credit report annually can also help you catch any fraudulent activity, such as unauthorized credit accounts or charges. By catching fraudulent activity early, you can minimize the potential damage to your credit score. 
• To understand your creditworthiness: Your credit report provides a detailed overview of your credit history, including your payment history and credit utilization. By checking your credit report annually, you can get a better understanding of your creditworthiness and identify areas where you may need to improve. 
• To stay informed: Checking your credit report annually can help you stay informed about your credit and make more informed financial decisions. 

Overall, it's important for young adults to check their credit report annually in order to maintain a healthy credit score and protect their financial well-being. 
 

Having bad credit can be costly for young adults in a number of ways. Some of the potential costs of bad credit include:

• Higher interest rates: If you have bad credit, you may be offered credit products with higher interest rates, such as credit cards or loans. This can result in higher monthly payments and more expensive borrowing costs overall.
• Difficulty getting approved for credit: If you have bad credit, you may have difficulty getting approved for credit products, such as loans or credit cards. This can limit your financial options and make it more difficult to achieve your financial goals.
• Higher insurance premiums: In some cases, insurance companies may use your credit score as a factor in determining your premiums. If you have bad credit, you may be charged higher premiums for insurance products, such as car insurance or homeowners insurance.
• Difficulty renting an apartment: Some landlords may check an applicant's credit history as part of the rental application process. If you have bad credit, you may have difficulty finding a place to rent. 

Overall, having bad credit can be costly in a variety of ways and can make it more difficult for young adults to achieve their financial goals. It's important for young adults to understand the importance of maintaining a good credit score and to use credit responsibly in order to avoid the costs of bad credit.