Today’s guest post comes from Joan Katz. It’s full of some really great tips that are easy to implement. Hope you enjoy it!When you’ve first gotten out of school and landed your first job, you probably thought the same way as other young adults your age would. You say, “Wow! I can’t believe it, I’m finally earning money on my own. Now, I think about things I want to buy for myself—the latest fashion I want to wear, the latest electronics I want to own, the food in the restaurants I’ve been longing to visit, I can finally do all of these!”
Tell you what, many young adults who are just starting to learn #adulting are falling into the trap of chronic money-wasting habits. That includes what we’ve just mentioned above—a shopping splurge on things you only want but don’t need at all. Yet, after the one-time splurge, almost nothing is left on the supposedly top priorities such as nutritious meals, health, bills, savings, investments, and the debt you need to pay as soon as possible.
Well, it seems that these young folks need a crash course with lots of expert financial advice. Money matters can be tricky. If you don’t know how to handle your finances well, money will control you!
That being said, we’ve rounded up timeless tips young adults like you should start following from now on.
Make a Realistic Budget
You’ve heard this good-old advice from your mother a thousand times. But, now that you’re on your own—you have work, you provide your needs, and you pay your own bills, this advice proves to be always useful. Taking a few minutes to jot down all your needs and the bills you need to pay, will help you prioritize your needs. Some of us tend to overspend if we don’t set a definite budget on our necessities. Also, we might end up using the money we should’ve allotted to our needs to non-essentials instead.
When you make a budget, you’ll have a realistic, reasonable, and balanced approach on how you’re going to divide your monthly salary for your month-long expenses and savings. And oh, making a budget doesn’t mean you’re going to deprive yourself of some things you want to enjoy, perhaps that book you’ve been wanting to read, or that really cute phone case you saw online. Rather, a budget will help you figure out how much money you can spend on your wants without neglecting your needs. In fact, at times, you’ll find yourself being surprised at how much money’s left for anything you want to enjoy after you’ve set your priorities. Check out these personal finance apps you might want to use right here.
Have a “Cash-Only” Motto
Many people find it tough to control their spending when using credit cards. Isn’t that a very common thing among many chronic money-wasters you’ll meet? It’s very easy to make a loan or credit but look at how hard it is for them to pay what they owe. That’s a very typical scenario already. But if you’ll be this kind of person, think about how it can possibly damage your reputation and how much stress you’ll have thinking about a giant credit card bill.
On the other hand, going cash only for all your transactions as much as possible will let you save a significant amount of money, plus you’ll avoid much stress. Knowing you are debt-free gives you a peace of mind, you can sleep sound each night!
Always Maintain a Savings Account
You’ve always known it’s important to have savings you can tap on. But, don’t rush opening a savings account in just any random bank. Giving it some time to research the options can make a huge difference. When choosing a savings account, consider how much you can earn from the interest rate. You’ll only have your money sleep in the bank if you choose a savings account with an interest rate that’s low. Why settle for that when you can go for a way better offer?
And folks, remember, your savings is meant for the rainy days such as when you get laid off. But take note, your savings for the rainy days should not cover your wedding, any other party, or your travel. Of course, you know too well that your emergency fund isn’t meant for those things. They should be different financial goals you need to save for specifically. An emergency fund is just an emergency fund. Learn other valuable personal finance tips in this article
Start Thinking About Good Investments Now
Many 20-somethings feel like it’s too early for them to start thinking about quality investments. They would rather use this time to enjoy life and spend their money on things they want. But hey, it’s better to start being practical this early. Your future self will thank you later for starting to save earlier on your retirement and for investing on things that would be useful in the long run.
And here’s a bonus tip, folks: Many have learned that living a simple life gives tons of benefits. Besides the fact that it’s practical, having contentment makes anyone truly happy.
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