Many young adults get into debt due to the lack of education on personal finance.
The problem is no required subject in high school or college deals with financial literacy.
Our young adults are practically clueless when it comes to handling money the right way.
They encounter problems when they step out into the real world for the first time, and money management becomes an issue.
We share some tips for all young adults out there so that they can avoid the nightmare of having financial problems.
The first skill that you need to learn is how to practice self-control. Your parents should have taught you this when you were young.
If not, you need to learn the art of delaying gratification which would help in building the right financial foundation.
We are now in the internet age and online stores, you can easily make a purchase anytime you want to.
Paying for items on credit is ok if you have the discipline of paying your credit card balance on time. Having to pay interest or late fees on any of your purchases would deplete funds in no time.
Learn how to save up and make purchases using cash especially for large purchases.
Please don’t make it a habit of using your credit card all the time. Credit cards should be used for convenience and the rewards they offer.
Make sure that you always pay your balance in full when your statement arrives. Don’t keep cards that you can’t monitor.
If you don’t learn to manage your own money, other people may mismanage it for you.
Some of these may be commission based financial planners.
Others may mean well but don’t really know what they are doing when giving you financial advice.
Instead of relying on others for financial advice, you should take charge and learn the ropes yourself.
There are many personal finance books that you can read. Once you arm yourself with personal finance wisdom, you won’t easily fall into traps.
Whether it’s someone who wants to siphon your bank account or friends who want you to blow a huge amount of money with them every weekend.
Make it a point that your expenses never exceed your income.
This is where coming up with a budget becomes important. Budgeting is not as hard as it sounds.
Once you realize how much that cup of Starbucks costs you, you may want to make changes to your everyday expenses.
You need to keep your monthly expenses as low as possible so that you can have savings in your bank account.
Practice this discipline, and before you know it, you may have the cash for a new car or condo.
Buying in cash is always ideal compared to getting a loan. Loans may give you good terms, but there are interest payments that need to be made.
You may end up paying double for what you are purchasing if you are not careful.
Emergencies come when we least expect them. Having savings in the bank can help us during these trying times.
You can sleep better at night without having to worry about getting into financial trouble when these emergencies do strike.
You can consider your savings as an expense that you need to pay off every month. Place it in a high interest earning instruments like mutual funds, bonds or money market accounts.
Keeping your savings in your bank account will lower the value of your money due to inflation.
You need to start saving for your retirement right now. Take advantage of the law of compounded interest and look for an instrument where you can invest in your future.
Learn about taxes and how you can take advantage of preparing your annual return yourself. When a company offers you a salary, compute if you will get enough money after taxes that meet your goals and obligations.
There are tools like Paycheck City that helps you compute your own payroll taxes. These calculators will help you know your gross pay and net take-home pay.
It would help if you also guarded your health and wealth by investing in insurance instruments which can give you and your family peace of mind in any event.
You don’t need fancy degrees to learn about personal finance. Applying what we shared can make you prosper just like the guy with the hard-earned MBA.
About the Author
Michael is an experienced leader and innovator with a long track record of successfully developing brands online. His proficiency in growing as platforms, generating web traffic and global team building has aided in driving Newswire’s rapid growth. Michael strives to make press release Newswire the disrupter in the PR and Marketing space, allowing businesses to attract media attention without the need for high-priced agencies. For more info.CLICK HERE