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Five things they don't teach you in school about

how to secure your financial future


(BPT) - Anyone over a certain age has heard about the “the three Rs” of education - reading, writing and arithmetic. The thinking is that if you graduate from school knowing how to read, write and solve basic math problems, you’ll have the fundamentals for a successful life. But these days much more is required, especially when it comes to making sure you have the financial resources to take care of yourself and your family.


Here are five things they generally don’t teach you in school but that everyone should learn.


1. Paying off debt. Recent statistics from the Federal Reserve show the average American household owes between $7,123 and $15,270 in credit card debt, and $32,258 in student loan debt. The Federal Trade Commission reports that many people face a financial crisis at some point in their life, whether due to illness, loss of a job or overspending.Regardless of what got you into trouble, getting out of debt is one of the most important things you can do to ensure a solid financial future. The FTC says an important first step is to create a household budget, making sure the amount you take in each month is greater than your expenses. Once expenses are under control, use extra cash to pay down credit card debt as quickly as possible, starting with those cards that have the highest interest rates. You may also want to consider credit counseling or debt management services, but be sure to do your homework to avoid scams.


2. Negotiating a salary increase. Companies are planning moderate salary increases of 2.9 percent for their salaried non-management employees in 2014, according to a survey of 910 U.S. companies by global professional services company Towers Watson. Employees shouldn’t sit back and expect a pay increase, however - especially if their performance has been outstanding and their responsibilities have increased - they should ask for it. When asking for a raise, experts recommend arming yourself with facts about your company’s financial performance and the salaries of others in comparable positions. And when you do request a pay increase, don’t say it’s because you need the money; instead focus on the value you bring to the company, such as increased profits or the acquisition of new clients.


3. Buying a house. With debts under control and a decent salary, many people start thinking about buying a home. Mortgage rates remain near all-time lows, so it’s still a good time to buy a house, but home ownership may not be for everyone. One of the first things you should consider is how long you plan to stay in the house. Because of the up-front costs of purchasing a home, including closing costs and real estate agent fees, you may lose money if your home value doesn’t increase enough to cover those costs by the time you sell. Many experts advise planning to stay in your house for at least three to five years, but a mortgage calculator can help you run the numbers. You should also consider other expenses like insurance, taxes, association fees and maintenance. And if you do decide to buy, remember mortgages vary greatly, so shop around to get the best deal.


4. Saving for the future. Whether it’s for a house, a car, child’s college education, or your own retirement, saving for the future can seem daunting if not impossible, but experts say it’s easier than you might think. It starts with creating a household budget so you can see where your money goes and eliminate unnecessary expenditures. Next is to adopt a mindset of “paying yourself first” - commit to setting aside a certain amount in savings each month and treat that as you would any other household bill that must be paid. Finally, start saving as early as possible to take advantage of compound interest.


5. Protecting your assets. Even if you’re debt-free, earn a good income and are diligent about saving for the future, few people could absorb the cost of a catastrophic event like a major illness or accident. That’s where insurance comes in. Insurance allows you to drive a car knowing that the cost of repairs or medical care will be covered in the event of a crash; own a home knowing that it can be repaired or replaced if it’s damaged or destroyed; and even get peace of mind knowing that your family will be taken care if something happens to you.


“Insurance is a critical part of any financial plan because without it, you could lose everything you’ve worked so hard for with just one catastrophic incident,” says Rick Burt, executive vice president of products, Erie Insurance. While car insurance and homeowners insurance are often mandatory, Burt recommends consumers also consider personal umbrella insurance and life insurance. “A personal umbrella policy gives you an added layer of protection beyond your auto and homeowners insurance in the event that you are sued due to an accident. And life insurance is essential if your family depends on you financially - whether you’re the primary breadwinner or the person who takes care of things at home.” For more information, visit

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