TMCC Financial Literacy Guide

9 or a higher education without taking out a loan. However, spending on credit for everyday items, clothes, tech gadgets, or vacations isn’t likely to help you achieve fnancial security— especially if this debt is charged to credit cards. Credit cards demand monthly payments and are known to have very high-interest rates—some even have interest rates up to 29.99% APR, making it very easy to spiral further into debt. Bottom line, if you don’t pay back the money you’ve borrowed on time, you can be sued, your house can go into foreclosure, and your car could be repossessed. The threat of these scenarios isn’t likely to make you feel fnancially secure. On the other hand, being debt-free can help provide a deep sense of fnancial security. Controlling Your Money If someone makes $100,000 per year but spends $110,000, are they fnancially secure? This person is digging themselves into debt and will struggle to pay their bills. So, if we want to learn how to become fnancially secure, we must frst learn to budget. Budgeting is the process used to control money – to tell it where to go, instead of wondering where it went. When you’re in control of your money, you’re far more likely to feel fnancially secure. When you consistently have money left over at the end of every month, you’re well on your way to achieving fnancial security. Build an Emergency Fund A good way to feel fnancially stable is to have an emergency fund. An emergency fund will be your safety net when emergencies happen—and they will happen, so plan for them. It’s hard to have peace of mind regarding your fnances if you keep going into debt because of emergencies, so putting some money in the bank is the frst step to fnancial security.