In this article, we want to show you 5 useful financial tips that any young adult should follow to avoid any serious mistakes that millions of people made before.
1. Value the significance of money
Although people often say that money can’t buy happiness, they must admit that it would definitely make them feel comfortable. Therefore, it is advisable to place a value on every buck you pay and understand that each transaction is also a trade-off.
For example, if you are considering buying a new car at the price of $20,000, then you should calculate how much time it would take you to earn that money. Is it really worth traveling on a luxurious yacht when your saving fund is running out of money? These questions will help you make wiser and better financial decisions.
2. Be responsible for using your credit card
This is probably one of the most important things to avoid financial hardship as young people tend to spend recklessly on parties, traveling or clothes and find it stressful to pay later. Thus, always keep in mind to spend responsibly and try to set a specific goal for saving money. Otherwise, you will heavily depend on future earnings to pay interest and today’s purchases. Believe it or not, that is not a pleasant experience for young people at all.
3. Get a college degree
It’s not always true, but for the majority, the college education is a major investment as it significantly correlates with our level of increase in future earnings.
If your family can’t afford this, then you should try your best to make your dream come true even when it means doing a part-time job or taking out loans.
A good way to save on tuition fees is to attend a community college for 2 years, and transfer to a university. With a good degree and perfect skills, you can easily pay off your debt within several years of working.
4. Choose a partner wisely
Don’t only pick a boyfriend or girlfriend who has the same values on where money is considered. It’s also important to look at moral and ethical values. At the very least, you should spend enough time to get insightful understanding of your partner.
Passion is essential, but trust is even more so. If you marry an overly critical wife who’s always complaining about your spending, for instance, it will eventually result in bad financial decisions.
5. Plan your retirement on the first job
If your employer offers a retirement savings plan, also known as 401(k), grab the opportunity immediately. Normally, it’s advisable to spend approximately 7% of your earning in earlier years, and gradually increase until it reaches 15%. This will help you enjoy your final years without any financial hardship.
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GUIDE: all about budget planning
- Michel Fleuriet
- Publisher: McGraw-Hill Education
- Edition no. 2 (12/20/2018)
- Adrian Docherty, Franck Viort
- Publisher: Wiley
- Edition no. 1 (02/17/2014)
- Martin Mayer
- Publisher: Dutton Adult
- Edition no. 1 (05/21/1984)
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- Kenneth M. Morris, Virginia B. Morris
- Publisher: Fireside
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GUIDE: about budgeting n’ lowering bills (FREE forms)