Understanding Bills, Credit Cards, and Banking: A Newbie's Guide

First, let me assure you that it's totally okay to be new! I was in the same boat once, and it can be overwhelming. But don't worry, you can learn a lot by asking questions and understanding the basics.

Ask Questions!

Feel free to call your bank or credit card customer service and ask for some basic guidance. They are there to help you and can provide clear explanations. If they can't help you, they might direct you to additional resources.

I'll guide you through some basic concepts, but keep in mind that this is a simplified US-based answer. For more in-depth information, there are many help sections, books, and blogs dedicated to financial management and personal finance. A great starting point is the Financial Independence 101 class, which I highly recommend you explore.

What is Money?

Money is something we all agree has value and which we use to keep track of who owes what to whom. In practice, money often exists as virtual numbers on computers, but it can also be metal coins or paper bills. What's important is that you can get it by providing something to someone else, and you can use it to get what you need from others or businesses.

As a newbie, it's essential to ensure that your source of income is enough to cover your basic expenses. If you're spending more than you earn, you might consider using budgeting apps or tutorials to help you understand where your money is going and how you can make changes if needed.

Banks

Banks are a place where you can keep and manage your money, much like a jar on your dresser. You put your money in a bank account, and it stays there until you take it out. However, it's not just about storing money; banks are businesses that earn money in various ways, such as charging interest on loans and paying a little interest on deposits.

To avoid unnecessary fees, make sure to follow the rules. Banks may charge fees for using another bank's ATM, keeping a low balance, or taking out more money than you have. If you're unsure about the fine print, a bank employee can explain your account fees and minimums. If you're looking for an alternative, you might consider a credit union, which is similar to a bank but community-owned and managed. They often have better rates and more accessible help.

Managing Bills

Most of your bills can be paid through your checking account, and it's becoming increasingly common to pay them online. To make this process easier, try to:

Keep track of when your bills are due. Know how much you need to pay. Pay to the correct person or organization.

This will help reduce stress and allow you to automate your payments so you don't accidentally miss any payments. If you ever have trouble paying or if you're a little late, don't hesitate to call the company and ask what to do. They may be able to help with occasional late fees or let you pay a little at a time until you're caught up.

Credit Cards: A Means of Payment

A credit card is a tool for making purchases, where the credit card company pays for it and then sends you a bill at the end of the month. You have the option to pay the full amount or a minimum payment. I strongly recommend paying the full balance each month by the due date to avoid accumulating debt and paying high interest on that debt. This practice will also help you build your credit score. It's not necessary to carry a balance to improve your credit score.

Debit cards, which you often get with a checking account, are not the same thing. Debit cards are not as secure as credit cards and do not build your credit score.

Sure, I've only scratched the surface here. There are entire books and resources available to help you dive deeper into these topics. I encourage you to read more, explore the Financial Independence 101 class, and ask more questions. Everybody was new to money at some point, and learning these basics can set you on the right path!