Money, Money, Money

By Casey Pontrelli on August 29, 2016

Financial health. Credit scores. Doing your taxes. These are all things that come with being an adult, but not many people know what they mean, or how to use them to their advantage.

There is a strong correlation between life expectancy and GDP, meaning that people in wealthy, developed countries have longer life expectancies than do those in poorer countries. This means that financial health is pretty closely linked to physical health. So, while financial health and all things involved with it may be intimidating or boring, it’s integral to our wellbeing.

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There’s also a strong link between debt and stress — a poll run by AOL and The Associated Press found that 44 percent of people with high levels of stress due to debt have suffered from migraines or other severe types of headaches, as well as back pains, ulcers, and heart problems. This link is an interactive infographic that goes more in-depth into the poll’s findings.

All that being said, it’s pretty obvious that we need to keep our debts low and our budgets balanced. But when the total student loan debt in America is $1.2 trillion, that starts to look like something that’s easier said than done.

The best way to arm ourselves against the stress-inducing headache that is money is knowledge — and I’ve done enough research on this topic to have a pretty impressive arsenal. So, let me hit you with some fact bombs.

Credit scores are a calculation that reflects how likely you are to default on debt. They’re based on credit history, current debt, total credit available, and how often you apply for credit. Payment history is taken into account, as is age. The scores range from 300 to 850, and the higher the score, the better the rating.

So basically, if you have a credit score of 830, you have great credit and can get a loan from pretty much anywhere because it shows you are great at paying stuff off on time.

You can see your credit score on a credit report. Here is a good, free credit report that will keep you notified of how your credit is doing.

If you have a bad credit score and want to raise it, not much besides paying off your debts and time can raise your score. Slowly but surely increasing the gap between the money you owe and the amount of available credit you have is the easiest way to raise that score. I know because that’s what I’m doing right now. Here are some other good tips on how to raise your score.

If you want to build a good credit score, here’s a good way to start: Get a credit card. But if you do this, you have to be sure to pay off the full balance (or at least the minimum payment) each month and on time! Also, don’t buy into temptation and keep your balance low. Even though it may feel like it sometimes, credit cards are in fact not free money, but technically unsecured loans and can have pretty nasty interest rates. Here are some more tips on how to get started on your credit score journey.

“Having a good credit score means you’ll have an easier time securing a mortgage when you want to buy a house, getting an auto loan, and securing lines of credit in general,” Julia Switzky, an accounting grad student said. “So, while credit cards may be a little scary, they can be very helpful if used correctly.”

Let’s switch gears and talk about doing your taxes.

I still don’t know why this isn’t something that’s covered in every high school or why this isn’t a mandatory class people have to take once they get to college, because taxes are something literally everyone who works (above the table) does.

The good news is, if you’re like me and just a college student who has one, steady job, or even a couple jobs throughout the year, taxes are actually really easy. Both Switzky and I recommend using Turbotax because it’s so user friendly — and it’s all online. It’s also free, if you fill out all the information on your own.

If you have a bunch of investments or nonprofits or things like that, there are plenty of people whose job it is to help with that. H&R Block is one of those places, but you have to pay for it.

Cal Poly accounting students will also do your taxes for free, every tax season, if you meet the requirements. Here is more information about the program.

These are just two things that can contribute to financial health — there are a lot of other things that go into it. But now that you know a little bit more, it won’t be as intimidating.

If you want to calculate your financial health, here’s a calculator made by CNN to do just that.

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