7 Financial Tips for Young Adults

Financial Tips for Young AdultsBeing a 20’s something young adult myself, I know exactly how young adults think and managing personal finances is at the bottom of the ladder for them as far as their priorities are concerned. This is a major mistake that most young adults make, and if you too belong to this group, they you need to imbibe some financial knowledge in order to better manage your budding financial life. You can also look for online scratch cards to get the best deals before buying anything.

Here are a few tips that would surely help you in efficiently managing your financial life:

1. Cut down on your expenses

The first advice I would give you is to lower your expenses and try not to spend money on the latest fads just to boost your ego and feel good for a few days. By no means I am suggesting that you stop spending money on leisure, but you should spend a percentage of your money on that.

Even if you manage to save a few bucks every month initially, it will all count in the end as your money will be able to grow thanks to the power of compound interest.

2. Track Your Finances

In continuation to the point above, not only should you limit your expenses but also track the status of your finances. This includes knowing how much you are spending each month and consciously making an effort to find ways to reduce that amount, as well as plan your finances out every month.

3. Allocate Money for Different Aspects of your Life

As a young adult, we always want to enjoy life, thereby neglecting our financial status altogether. Please don’t make this mistake. You should make it a habit to allocate a percentage of the money you have at the starting of each month for different aspects of your life, such as eating & drinking, going out, entertainment, partying and so on. But the total amount should not exceed your budget; in fact you should allocate 10-20% of your money as savings and try not to touch that at all.

4. Use your Credit Card wisely

Let’s admit it – credit cards are the source of misery in our financial lives. The liberty of spending money, whether it be online or stores, doesn’t let us stop at anything. But you should always keep this in your mind. No matter how much you spend, it’s you who is going to have to pay for all this ultimately. So use it wisely. Instead of using your credit card at every available opportunity, use it only to buy something that you absolutely want at all costs.

5. Don’t Get Buried in Debt

As a young adult who has recently passed out of college, you’ll already be in a good amount of debt. Try not to increase this amount by purchasing big-ticket items that you can easily buy at a later stage in your life. For now, think about reducing your debt slowly and commit to a goal of being debt-free in a period of 4-5 years at the most. If you keep neglecting your debt for a few more years, believe me, you’re going to be under some serious stress, so try to eradicate debt from your life starting NOW!

6. Save Money At Every Opportunity

If you are in a habit of buying stuff regularly and just can’t stop doing that, you can at least try to save some money. Look for coupons or discounts on the stuff you want to buy and try to get the best bargain. It’s also a good option to buy used things as they are available much cheaper. If you like reading books, start buying used books from some local store or Amazon.com, instead of going for new ones. If you try to save money on each item you buy, you’ll be able to save a good amount of money every month ,which you can either invest or use to slowly pay off your debt.

7. Find Ways to Make More Money

Okay that doesn’t make much sense, does it? You worked your way through college by doing tedious chores to earn some part-time money, and now I’m asking you to do that shitty stuff again! Well, you don’t need to go through all that anymore. There are much better and easier (relatively) online jobs that can give you a cool second income. The best one among them is blogging – just choose a topic to write on and devote one or two hours everyday to write stuff that people read. Then you can monetize your blog with a variety of programs. With time, your income will start increasing and you’ll start earning some serious bucks! Do give it a second thought!

Image Credit: iStockphoto

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