Welcome to Financial Fitness
Where we educate teens and young adults about the world of finance. Our goal is to close the financial literacy gap by making complex financial concepts accessible to everyone. We know that learning about finance & economics can be overwhelming and confusing, which is why we have created a platform that is engaging and easy to understand.
Our blog covers a wide range of topics related to business, finance, economics, entrepreneurship, and personal finance news. We strive to make our content interesting by relating relevant news and pop culture to explain economic concepts and investment strategies.
Here are just a few things you can learn from our blog:
Improve your financial literacy and confidence in financial matters
Stay up-to-date on the latest financial and business news and trends
Learn how to apply financial concepts to real-life situations
Gain valuable skills that will serve you well throughout your life, such as critical thinking, problem-solving, and analysis
Develop a solid understanding of personal finance concepts, such as budgeting, saving, and investing
Learn how to manage your money effectively and make informed financial decisions
Understand the basics of business and finance, including supply and demand, inflation, and branding
Explore the complexities of economic and corporate finance theory, such as business strategy, operations and valuation
We believe that financial education is critical for teens and young adults, and we are committed to providing accurate and unbiased information. Our blog also delves into economic and corporate finance theory to give our readers a deeper understanding of the financial world.
Our blog is perfect for those who want to learn about finance (in a fun way!) and how it relates to their lives. Welcome!
Do you really have enough money to buy the new Playstation when it comes out this year? How much is your smoothie habit costing you in dollars or potential bigger purchases? Managing personal finances is an essential aspect of life, yet many people struggle to keep track of their spending and saving habits. People often overlook small purchases that can add up over time and prevent them from achieving their long-term financial goals. A lot of people simply don’t keep track of how they spend or save their money. But with some basic budgeting basics under your belt, and by making most of your smoothies at home, you’ll be on track to buying that Playstation.
Creating a budget is an essential step toward managing personal finances. It is a plan that outlines how much money one expects to earn and spend over a specific period. For teenagers, income may only come from an allowance or birthday gifts. However, creating a budget is still important. It helps to track your finances, prioritize spending, and save up money for future purchases. A popular framework for budgeting is the 50/30/20 rule, where you spend 50% of your income on your bare necessities, 30% on your wants, and 20% on debt paydown or savings.
Spending on wants is also an important aspect of budgeting which brings us happiness. If you are at a point where you cannot allocate enough of your budget to wants and savings, it may be that your needs are too high and you either need to scale back on rent, food, and clothing, or be honest and redefine a portion of your needs spending as a want.
Regardless of your income level, creating a budget is a worthwhile exercise that helps you prioritize your spending. The amount of your budget that you should allocate to savings is a personal decision, but the importance of long-term savings should not be dismissed. Savings can provide you peace of mind in the event of unforeseen expenses, like a car repair or a leaky faucet.
Setting realistic budgets and being mindful of small purchases can help you achieve financial success. A long-term financial plan is the ultimate goal of any budget, whether it is saving for a house, college tuition, or retirement. Your budgeted savings will be allocated to investments that will grow over time. We will have more on investing and the psychology of money in future blog posts so stay tuned!
Whiteside, Eric. “The 50/30/20 Budget Rule Explained with Examples.” Edited by Chip Stapleton and Ryan Eichler, Investopedia, 10 Oct. 2023, www.investopedia.com/ask/answers/022916/what-502030-budget-rule.asp.
ABOUT THE FOUNDER
Dawson is a student with a passion for economics, finance, and entrepreneurship. His mission is to incubate and stoke a love of business and finance, which he believes is a vital part of the world we live in today. This is why he created this platform.
He enjoys both creative writing and analytical writing - in fact, he has published his poetry and has forthcoming publications of other poetry and fiction. Dawson is also an event coordinator for a youth writers' collective.
In his free time, Dawson likes to fence, play the piano & chess (not at the same time), and compete in Spartan obstacle racing.
GET IN TOUCH
What is Money?
Whether we realize it or not, we use money pretty much every day. But what is money? Why does it have any value in the first place? From Wampum to Rupees, what exactly makes money valuable and how has this system of value changed over time?
At its core, money is an economic tool for trading goods and services. It gives us an accepted and universal medium of exchange. Money is also scalable, meaning it is possible to trade fractions of currency; whereas you can’t easily break bars of gold. In addition to being an accepted medium of economic exchange, money is also a store of value so you do not have to use it immediately. Lastly, money serves as a unit of account because it provides a common metric to measure the values of goods and services.
Money may be typically thought of as bills or coins issued by a government, but although that may be the most common form, money can be anything that is used as a medium of exchange. In the past, cattle and bags of grain were accepted as forms of money. Flash forward to today, and most money is exchanged electronically, so you could easily go days without handling physical money and simply use Venmo and Apple Pay. To further complicate matters, some forms of currency such as Bitcoin are not even issued by governments.
The advent of cryptocurrency is a far cry from how the value of money was previously derived, which was often tied to the number of a government’s reserves of a precious natural resource. The most noteworthy example was the gold standard, a monetary system in which the standard economic unit was based on a corresponding quantity of gold. No country currently uses the gold standard, with the US going off the standard in 1971 and Switzerland being the last country to remove it in 1999. All countries now use fiat money, which is money that is not linked to an external resource.
Money serves as a medium of economic exchange, a store of value, and a unit of account. If we did not have money as an accepted medium, we would be forced to resort back to a basic barter system. This, as you might imagine, would be a much more cumbersome process as would constantly need to find goods or services that a seller would be willing to accept to buy something. Good luck finding a boba shop that will trade a milk tea in exchange for cleaning a few windows.
Lioudis, Nick. “What Is the Gold Standard? Advantages, Alternatives, and History.” Edited by Michael J Boyle and Marcus Reeves, Investopedia, 30 Apr. 2023, www.investopedia.com/ask/answers/09/gold-standard.asp.
“What Is Money? Definition, History, Types, and Creation.” Edited by Caitlin Clarke and Jiwon Ma, Investopedia, 30 Nov. 2022, www.investopedia.com/insights/what-is-money/.
What is Investing?
One of the most essential parts of personal finance is investing. Although saving is crucial, it's not enough to save our way to retirement since inflation can reduce the purchasing power of our savings over the years. Currently, inflation is at a record high, making it more crucial to invest our money wisely.
There are various financial instruments available, but the best building blocks of investment portfolios are ETFs. ETFs are a diversified collection of stocks from different companies that we can purchase for a low cost. It also lets us lower the possibility of losing our initial investment - although there will inevitably still be risks in any form of investing.
So, when's the best time to invest? The answer is nearly always that we should start investing now! Every day, month, or year that we delay investing, it becomes increasingly challenging to achieve our retirement goals due to the power of compounding. The earlier we begin investing, the more time we have to grow our investments, and the greater the potential returns.
Investing is a critical step in securing our financial future. Although it involves risks, choosing not to invest could be even riskier in the long term since it lets you grow your savings much more consistently than just leaving it in the bank. Investing as soon as possible is essential to working towards our long-term financial goals and securing our financial future.
Hayes, Adam. “Saving vs. Investing: Understanding the Key Differences.” Edited by Anthony Battle and Pete Rathburn, Investopedia, 23 Feb. 2023, www.investopedia.com/articles/investing/022516/saving-vs-investing-understanding-key-differences.asp.