Being a young adult is such an exciting time in life as new found freedoms and responsibilities arise. The pursuit of careers, relationships, first house, and FUN is on the priority list and financial decisions at this point in life can be crucial to financial success throughout life. Let me assure you that if you learn negative financial habits as a young adult, the results may haunt you for life.
It is important to learn and understand the value of money. Money is valuable. Knowledge and behavior you learn as a young adult have the potential of sticking with you throughout your life. Because of this, you will want to acquire wise financial habits if you want financial freedom.
There are a few very important financial tips for young adults. If followed, they will give you the necessary tools to live a life free from the bondage of excessive debt and the stress of living paycheck to paycheck. You don’t have to be a financial genius to have a savings account that actually has tens of thousands of dollars in it or a retirement account that will allow you to retire early. What you do need, though, is serious determination and commitment to follow sound financial advice day-by-day, week-by-week, and year-by-year.
The first tip I’d like to share concerns budgets. I can’t emphasize enough the importance of creating a budget and sticking to that budget monthly. Too many people simply spend more than they earn and resort to using credit cards to cover expenses and desires because their money has run out. This is not wise, as credit cards, though sometimes used to build up credit, normally end people up in a heap load of debt with high-interest rates. Effective budgeting will help you know exactly how much money you’ve got coming in and how much you need to cover your monthly expenses. Sit down as soon as you can and make a list of income and expenses and see what you come up with. Make the numbers work for you and if you have to cut down in some areas, do so. Be sure to allocate money for savings monthly as well because you want to have a reservoir of savings and add to it monthly.
A second tip for young adults is to learn about checking and savings accounts.; If you don’t have a checking account, open one up at a local bank and ask for one that does not require a minimum balance and has online banking. Once you’ve opened your account, keep track of transactions diligently so that you do not bounce a check. I know this can seem tedious, but let me tell you that the day you bounce 3 or 4 checks and have to pay over $100 in EXTRA fees is the day you kick yourself for not following this tip. Whether you use your debit card or write a check, record it immediately in your transaction register so that you don’t forget.
The third tip for financial freedom as a young adult is to avoid unnecessary debt. The pressure to buy this and buy that to look cool or purchase your girl or guy gifts so that they will adore you can be quite strong, but I’m telling you that if you cannot afford it, don’t do it! Put as much money as you can into your savings account and be sensible with purchases. You will get credit card offers in the mail and so many young adults snatch the opportunity and pretend like that card is like cash but I assure you that it is not and the purchases you make with credit cards come with hefty interest rates and can accumulate very quickly. Before you know it you could have accrued $3000 in debt and not have the money to pay it off at the end of the month. Let me say it again; avoid unnecessary debt. That $35,000 truck that you think you desperately need might not be such a wise choice unless you are making 6 figures and are debt free. Don’t let your emotions make your financial decisions. Think things through before purchasing them.
You have the opportunity to live a financially free life if you will put into practice simple financial tips now. If you’ve already made some bad decisions, it is not too late to begin being financially responsible and changing your financial future. You can do it.