LITTLE ROCK, Ark. (KTHV) -- Financial literacy is an important, lifelong personal finance skill that everyone should have because it fosters careful spending and informed decision making. Here are five financial numbers you should know.
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1. Credit Score - This impacts many facets of your life - including getting a loan for a car or house and being approved for a credit card. Experts recommend checking your credit report at least once a year to catch errors or identity theft.
2. APY - Your annual percentage yield is your yearly compounded interest - generally associated with a bank account. Every year, your financial institution will pay you a certain percentage of the money you keep in an account and the APY determines how much you receive.
3. Mortgage rate - This is the interest rate charged by a mortgage lender, regarding home ownership. If you happen upon a lower rate, consider re-financing your home to save money. Before you make your decision, calculate the "payback period" because re-financing fees can be expensive.
4. APR - Your annual percentage rate is the interest that you pay a financial institution or creditor on loans or credit cards. If you know you won't be able to pay your credit card bill in full each month, choose a card with a lower APR.
5. 401K Fees - This is a retirement savings plan sponsored by an employer. It lets workers save and invest a piece of their paycheck before taxes are taken out. Taxes aren't paid until the money is withdrawn from the account.