10 Useful Money tips for young adults
Navigating personal finance and investments as a young adult can be challenging. No one prepares us for the world after varsity. Where mortgages, car payments, rents, bills, and everything in between sorely depends on you.
A world where money decisions have long term consequences. Young adults are thrusted into the personal finance realm with little to no knowledge of what to expect.
In this article we will try to bridge that gap. We will discuss useful money tips for young adults. The do’s and don’ts. While this article might not solve all your financial predicaments, it will surely give you a step into the right direction. So buckle up
10 useful money tips for young adults
1. Don’t use credit for non essential items
Having access to a credit card for the very first time is exhilarating. It is also one of those things that can turn into a nightmare pretty quick. Using your credit for miscellaneous things that singular seem like a small amount but cumulatively it is a lot will lead to a financial disaster.
No credit at all is always better. However we live in a world where it is almost impossible to not have credit. So you have to use it wisely and only when it is absolutely necessary.
A good way to avoid taking out unnecessary credit is building an emergency fund for the unplanned emergent expenses. You should also have sinking funds for big purchases.
2. Live within your means
Simple mathematics tells us that if you spend less than what you have, you have some leftovers. It is this simple math that you should apply to your life. Live below your means and spend less than what you earn. This will ensure that you have money to save and invest.
I am not ignorant enough to ignore that inflation and stagnant wages have made it difficult for most young adults to save money. With the cost of living skyrocketing and wages remaining the same, living below your means seems unattainable. However, you can start a side hustle to complement your wages and budget accordingly.
3. Budget your income every month
“Failing to plan is a plan to fail”
If this is not your first article by me then you will realise my emphasis on budgeting. And for a good reason too. Planning for every penny you earn will always ensure that you get the best out of the resources.
4. Pay yourself first
The concept of paying yourself first was made popular by the likes of Robert Kiyosaki in his book ‘Rich dad, Poor Dad’. It is on the basis that you should invest a certain percentage of your income after tax. Before you even spend it. Tih is to ensure that you invest and not spend money
5. Talk to your loved ones about money
In most communities money talk is taboo. People are not comfortable discussing finances even with their loved ones. But you need to break that barrier.
There is a proverb in IsiNdebele that says “Indlela ibuzwa kwabaphambili”. Which roughly translates to “Seek guidance from those who came before you”.
There is wisdom that comes with age and experience. Tips that only a person who has been through something will know.
Ask for advice from those you trust. Ask questions. Study their spending and investing patterns. Seek knowledge. Let them in on your financial goals. They might bring in a perspective you never would have considered.
6. Never stop growing your financial knowledge
Investing in your personal finance knowledge will keep you on top of the game. You will learn the financial markets trends and know which decision to take. Information is always power. Invest in your personal growth.
Read: 10 valuable Personal finances lessons from popular books
7. Don’t try to keep up with everyone
Keeping up with Jones is the surest way to keep you broke. Everyone has their own journey and their own stories to tell. Things they do not share on social media. Trying to keep up with what they share and all the trends will bleed your pockets dry.
8. Consistency triumphs everything
When it comes to personal finance and reaching financial freedom, steady does it. You have to be consistent with your investments, financial habits such as budgeting, and understand that financial freedom is achieved over time. There is no magic wand that will get you desired results.
Consistency is key.
9. Build your long term investments
There is no better time to start than now. Start investing in your future and retirement. Ask your employers about your Pension fund and retirement contribution options. In a case where you can, match your employer's contributions and get the best out of it.
Here is a detailed article on building a retirement fund
