Good Financial Habits to Develop
It is never too early to learn about managing money. Some parents actually teach their children from an early age. Perhaps they give the child a simple little job to do in exchange for their allowance? Maybe they encourage the child to save a little of the allowance each week towards buying something special that they like? It teaches them the value of money and it is a useful lesson during college years when they are almost on their own. They are likely to have a student loan to repay also direct $2000 instant money fastest sources as an assist but as they begin their careers there are a few rules that are worth following.
Credit cards are potentially dangerous for a start and that saving habit from childhood is worth reviving. It is tempting when you are finally earning to buy the things that you have never been able to afford before but you must ask yourself whether you can afford them now or whether they are just accessible because you have credit potential.
It is foolish to overstretch yourself by getting a new automobile if you don't really need one, or renting an apartment that is impressive but expensive, needlessly so. You also don't have to have the latest technology, every single new smart phone upgrade.
Everyone leaving college after successful graduation hopes of a good career. The recession has receded and employment prospects are fairly good. Most people can have the expectation of earning more money as the years go by. If you are in this situation then you should commit to saving a percentage of your income every month. Ideally you should ensure that amount is deducted from your checking account on the day your pay check hits your account so that you recognize you cannot access it.
Even though you may have a student loan to repay if you sit down with your figures you should be able to find the money to save.
You have regular bills to pay and you should ensure you do that. It is important that you do not defer payment or use a credit card to do so, thereby just shifting the debt elsewhere. That is extremely dangerous because you have to pay a high rate of interest on any balance that is outstanding at the end of the month. If you have already built up a balance you should get it paid off immediately. A personal loan is much cheaper and should be used to settle all such expensive balances.
It is worth checking on a periodic basis whether you have the best possible deal on your utilities, insurance or telephone network. Comparative websites do much of the initial work for you. If you can save money on any of these exercises then it can be put aside into the savings pot.
You should not wait until you get into financial trouble before you sit down and think about money management. Firstly you need to have a budget with income and expenditure listed and the latter prioritized. It is important that the budget is comprehensive down to spending on a sandwich and a coffee. That is the way to get the whole picture and therefore be able to make informed decisions.
You must then monitor actual against the budget you have prepared and make changes to reflect the current position each time.
There is little doubt that a credit card is convenient and for the purchase of some things like travel and accommodation, regularly bought online, a card is almost essential. However as already mentioned they are dangerous if used irresponsibly. You should not think that just because you now have a monthly pay check that you can spend what you want using a card. You will soon build up debt that can ultimately get out of hand.
Even experts makes mistakes in the stock market so although you should think about investment in general you should not get involved in anything that is high risk. You can always seek guidance and probably start with a 401k which your employer will contribute towards and in which there are tax advantages.
Down the line you may feel comfortable being more expansive and then switch back into safe investment the closer you get to retirement.
There is nothing wrong is having the occasional treat as long as you plan it and know how you are going to pay for it. It can be a vacation or some new furniture. As long as everything is done with thought and not on the spur of the moment things should be fine. You may need to make sacrifices elsewhere but if you are prepared to do it then there is nothing wrong.
Few people in their 20s think that retirement is anything other than remote. They have the whole of their adult life to live. However it does come and with life expectancy growing all the time there may be many years to fund without a regular pay check coming in. If you manage your money well from your 20s and maintain your good habits that retirement should be very comfortable.Read more Comments