Young adults in every era
struggle financially trying to make ends meet. While some are relatively
successful, others often plunge deeper and deeper into debt. Eventually, they cry out to God and others for financial management assistance.
These financial tips for young adults
can help! Consider the following suggestions for successful money management.
Organize your finances
Not every young adult knows how
to manage his or her money successfully. As a young adult, it is important to
learn how to organize your finances in a way that works. Your future, as well as
your well being, and that of your prospective, young family may depend upon it.
Are you planning to have children? There are important things to consider like
their education. Plan for these accordingly.
Document your income and expenses
Document your income so that
you know exactly how much money is coming in every month. Then, begin to
document your fixed and variable expenses. Note that your fixed expenses like
rent, car payments, insurance, heat and hydro are relatively stable and do not
change a lot from month to month. Variable expenses such as food, clothing
purchases and entertainment are more flexible. You should be able to juggle
these around, too.
Start a savings account
If you open a savings account
immediately, then you get into the habit of saving money. This is saving money
for the future, not money you can spend at random. Ten percent of your income
is a reasonable amount to save every month. If you cannot start with ten
percent, then save five percent and increase it when you are able to do so.
What is important is that you have started a savings account. Consider taking
out savings bonds or invest in long-term retirement or savings plans.
Build an emergency fund
When you establish an emergency
fund, it allows flexibility in case you encounter an unexpected emergency.
Emergencies do happen at the most inconvenient times. For example, you may have
a motor vehicle accident and have to pay a deductible. Where would you get the
money?
Purchase only what you need
Purchasing what you need as
opposed to what you want, allows you to spend your money more wisely. Young
adults often think that they have to have material things, but they
may not need them at all, or at least do not need them immediately. What you do
need must take priority. Do not fret about what other young adults have as they
may have accumulated massive debts.
Be cautious with credit card transactions
Credit card transactions
involve interest rates that are unexpected by the user. It is easy to use a
credit card, but when it is time to repay it, you may find yourself paying the
interest instead of paying the balance. Do you know what the interest rates on
your current credit cards are? If they are too high, you may be able to
consolidate them into one credit card with a lower interest rate. Talk to a
financial adviser. You may pay your credit cards off monthly, or even destroy
your credit cards if they become a financial burden.
Shop wisely
It is easy for young adults to
overspend, particularly when it comes to making initial purchases for your home
or young family. Plan to shop in such a way that you stay within appropriate
financial guidelines. You do not want to return your purchases because you have
overspent. Only buy high quality goods as they will retain their value over
time. Otherwise, you may find that you have to replace them.
Keep your receipts
If you make a practice of
keeping all of your receipts, you will know exactly how much you have spent on
your purchases. Keep receipts in a safe place and file them monthly. Remember
that you may need them when you are filing your income tax.
Coupon shopping
Coupon shopping can save you
dollars, but using coupons can entice you to overspend on items that you would
not ordinarily purchase, or may not use. Many online coupons may be
printed. Always check for validation dates, as they may not be honored
everywhere.
Avoid borrowing
Borrowing money often proves to
be a trap for young adults, as it is easier to borrow money than to pay it
back. Avoid borrowing from parents, family members or friends, as relationships
can deteriorate quickly if you are unable to repay your loans.
Consider giving a financial gift to God on a regular basis. Remember to include God and others in your financial planning, as giving to God reaps its own unexpected rewards. Being a young adult does not
mean that you have to struggle financially. What it does mean is that if you
are careful, then you will lay the foundation for a successful financial future
for yourself and your future family.
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