Young adulthood is one of the most important periods in a person’s life. During this phase, your career goals will become clearer, you’ll begin to realize what you want out of life, and your responsibilities will increase exponentially. With financial insecurity running high, it’s become more important than ever for young adults to make the most of their resources. Even if you parents taught you about financial responsibility, it’s easy to fall into a number of traps once you’re out on your own. Young adults looking to protect their personal finances should take heed of the following pointers.
Think Each Purchase Through
Once you’re living on your own and earning a decent amount of money, it can be very tempting to make large purchases on a consistent basis. Pricey electronics, cutting-edge gadgets and new cars are just a few of the luxury items that many young adults purchase without a second thought. However, it doesn’t take long for such purchases to make a dent in even the most robust savings accounts. With this in mind, make a point of carefully thinking through each large purchase you’re tempted to make. Nothing is more aggravating than having your savings depleted by an unnecessary impulse buy.
Of course, this isn’t to say that you should never treat yourself. After all, what’s the point of earning money if you can never enjoy it? However, instead of impulsively buying expensive items, you should take the time to mull over each prospective purchase. In many instances, you’ll discover that you don’t need—or even really want—the item(s) in question.
Put Away Money Every Month
You never know when you’ll be struck by a financial emergency. Whether it’s sudden job loss, car repairs or damage to your home, it’s important that you prepare yourself for such catastrophes. This is where building your savings comes into play. To ensure that you have a financial cushion to fall back on in tough times, place as much money as you can into savings each month. Knowing that you have money you can rely on in the event of an emergency can provide tremendous peace of mind. Additionally, opening high yield bank accounts will help you earn interest on your steadily-increasing savings.
Budget, Budget, Budget
No matter how financially responsible you think you are, failing to write up a monthly budget can have a substantial impact on your personal savings. In the absence of a budget, keeping track of how much you spend in a given month can prove incredibly difficult. That being the case, carve out some time to sit down and create a manageable monthly budget that you believe you can stick to. This will ensure that you’re able to keep track of your spending and help you avoid any unpleasant surprises when you receive your credit card bills and bank statements.
There’s little wonder as to why so many young adults accrue massive debt. In addition to many areas seeing a heightened cost of living, managing one’s finances can be difficult for those who have never been fully in control of their money. Fortunately, keeping debt at bay doesn’t have to be an uphill battle. In the quest for financial security, a little bit of willpower and fiduciary knowhow can do young adults a world of good.