The sad thing about all of the schooling that we receive as kids is that rarely are we taught personal finance. Few of us know how to balance a checkbook and even fewer know how to budget. This is a shame because when we are younger, that is the time where we make the least amount of money and could benefit from learning those lessons not only for better controlling finances at a younger age but to set us up for financial success as we age.
Young adults in particular look at any and all income as completely disposable and spend it accordingly. It is rare to see a young person take their money and put it to responsible use. While it’s fine to have fun with some of that money, setting yourself up for a better future should be a priority as well.
Self-control is one of the biggest issues that many adults face when learning to control their finances and impulse buys are a huge deterrent to keeping your finances healthy. Getting a credit card and maxing it out or spending your check as soon as you get it may sound fun in the short-term as a young adult, but it can really hinder you going forward.
If you have to charge things to a credit card, make sure to pay them off immediately. Try to earmark some of your check towards savings – whether it’s to pay off student loans that will come due after graduation or saving for a rainy day. Anything is better than squandering it all immediately.
Save for Emergencies
When you’re younger, you feel like nothing can possibly go wrong but that couldn’t be further from the truth. Cars break down, things get damaged or broken, and you will need the money to either repair it or buy a new one.
Saving money towards an emergency fund will allow you to be prepared for instances like those and not be completely blind-sided when emergency expenditures arise.
Know Where Your Money Is Going
Don’t just pay everything the second it comes due – although that is a good practice. Pay attention to where you are spending your money and where you might be able to cut back. Doing this will give you breathing room with your finances. Many people have their paychecks accounted for before they ever receive them and it leads to financial stress.