Understanding Personal Finance

Personal finance encompasses budgeting, saving, investing, and managing monetary resources. Surprisingly, only 24% of millennials demonstrate basic financial literacy, according to the National Endowment for Financial Education.

Albert Einstein reportedly called compound interest 'the eighth wonder of the world'. Compounding can turn modest savings into vast wealth over time, emphasizing the importance of starting to save early.

Zero-based budgeting, a method where every dollar is assigned a role, often leads to profound spending insight. An app like You Need A Budget (YNAB) utilizes this method and can yield a 600% return on investment for users.

An emergency fund should cover 3-6 months of living expenses. Surprisingly, a Federal Reserve report found 40% of Americans wouldn't be able to cover a $400 emergency with cash.

Five factors affect your credit score: payment history, amounts owed, length of credit history, new credit, and types of credit used. A little-known fact is that closing old accounts can lower your score by shortening your credit history.

The debt snowball method involves paying off debts from smallest to largest, regardless of interest rate. This psychological win of clearing debts can be more motivating than tackling high-interest debts first, as with the avalanche method.

While many fear stock market volatility, long-term stock investments have historically returned about 10% annually. It's lesser known that dividend reinvestment can significantly boost long-term returns, thanks to the aforementioned compound interest.