Young adults who are somewhere between going through their college life to getting through the “in-between jobs” status are mostly starting to grasp the concept of finance. It is therefore not surprising to see a lot of them having no clue on how to manage their finances much less have a financial future goal of some kind. But nevertheless they learn fast and so even if they make mistakes along the way, their innovative minds come up with wonderful ways to pick themselves up from the fall. And before you know it, they’re back in the game!
Still, everybody needs a staging area where they can start in life, right? So here are 8 tips that can help you with your finances.
Implement Self-Control in your Life
It used to be that when I hear about the word “self-control” it automatically triggers a thought about controlling my anger or impulses to be angry at things and people. But after a while my father taught me that self-control is applicable on so many things and not only on anger. The most significant thing I’ve learned about self-control is learning how to delay self gratification. Yes, every time you see something you like and that thing has a price tag, your body’s chemical reaction goes into overdrive pulling you into a single direction – to buy that item that your eyes desire.
Unfortunately, instant satisfaction also means you lose money or worse, you’ll owe money to someone or the bank and that’s not a good thing. If you’ll wait until you actually have money to buy the things you want, then you’ll see how convenient it is than the alternative. You’ll also develop the habit of being frugal as you learn to delay gratification.
Be in Control of your Financial Future
It is said that if you don’t make choices in life, then the choices make you. Well, this couldn’t be any truer for some people. I’ve seen a lot of people complain about how their lives ended the way it did and how much they hate their current situation. They struggle in life to become financially free, in fact, if I didn’t know better I think they would give just about anything to have a wonderful lifestyle. Don’t be like those people! I assure you, if you do not take responsibility for your future now, it will be lifetime of regret afterwards.
Educate yourself on how to do financial planning and personal finance and if you have to, then hire an expert financial advisor to help you manage your finances. They may be expensive but they are a worthy investment for sure.
Keep Track of your Money
You may not know it but if you don’t look, you’ll realize sooner or later that you’re losing more money than what you’re earning each month. You do your own bookkeeping and keep a record book of all your expenses every month, then match it against your income to see if you’re on the thrifty side of life or you’re living life in excess. It is as they say, “a penny saved is a penny earned,” but I would like to add to that and say that you should invest all those pennies you’ve saved and get a good return on your investment afterwards.
Initiate a Bank Savings Exclusively for Emergencies
If you’ve already heard about the story of the ants and how they save for the rainy season, then you must also know that it is a good thing to save money for emergency situations. It would be good to have more than just one savings account, and prepare one that will have enough funds exclusively for emergencies. Even if you have healthcare insurance it is always a wise decision to have spare money just in case your healthcare provider, by technical default on their policies, will refuse to cover the costs of your medical ailments. In most cases actually they refuse to pay for certain diseases.
You May Also Want to Have a Retirement Savings Besides your 401K
This sub-topic coincides with the above and as you can see it is beneficial for you to have multiple savings accounts. Normally, if you’re an average worker in the United States, then you’re entitled to a 401K benefit which is essentially your retirement package. Now there’s nothing wrong with the 401K but if you want to amp your life just a little bit when you retire – perhaps you have a major goal or dream that you want to accomplish and it requires some money – then having a savings account that’s also exclusively for retirement is the best way to go about it.
Observe your Tax Obligations
Basically there’s nothing you can do about the taxes that you are required to pay to the government as it is the law of the land. Even switching careers for a much higher compensation the additional income isn’t exactly as you thought it would be. Also different states have different tax laws and percentage amount levied on your average income, so it may not be profitable at all to switch careers immediately without considering these things.
If you can’t change how things work in one place, then maybe you can move to a country that charges lesser taxes on its citizen and work and live there! Singapore, Panama and Andora are just among the countries/states that charge very low income tax rates for workers and therefore it is logical to move to such countries if you really want to save more money.
Guard your Health
While you’re still young you may feel invincible; however, we humans being made of flesh and blood, sooner or later, will be vulnerable to injuries and sicknesses. It is therefore prudent to prepare for untowards incidents that will compromise your health; or better yet, you guard it! Why invite diseases into your body when you can live a healthy lifestyle and prevent them from ever invading system. But considering all things you may also want to get a healthcare insurance instead of spending a lot of money for a minor bone fracture or chronic fatigue or something.
Protect your Wealth
Protecting your wealth means getting insurance for all the things that you’ve acquired through your hard-earned money. So you should get mortgage insurance, house insurance, car insurance and even investment insurance. Life is much like a computer algorithm and you never know what will happen next even if you could make smart calculations about it, so it makes sense to be prepared for everything. Fires, burglary, accidents etc. could take all of your material possessions away in a blink of an eye! Being prepared means protecting your assets and it is a wise move.