Financial Tips for Young People Personal finance has yet to be put on the National Curriculum, so the chances are you might be fairly clueless about how to manage your money once you've flown the parental nest. If you think that understanding personal finance is not important or too tough going, you're wrong. All it takes to get started on the right path is the willingness to do a little reading - you don't even need to be particularly good at maths.To help you get started, we'll take a look at some of the most important things to understand about money if you want to live a comfortable and prosperous life.
Learn Self Control
If you're lucky, your parents taught you this skill when you were a child. Keep in mind that the sooner you learn the art of delaying gratification, the sooner you'll find it easy to keep your finances in order. Remembering that although it is possible to effortlessly purchase anything on credit as soon as you want it, it's better to wait until you've actually saved up the money. Do you really want to potentially pay interest on a pair of jeans or a box of cereal years down the line?
Take Time to Learn the Language of Finance
If you don't learn to manage your own money, no one is going to help you and in some cases people will find ways to (mis)manage it for you. Don’t rely on others for advice, take charge and read a few basic books on personal finance. Once you're armed with personal finance knowledge, nothing will catch you out, from different mortgage types to knowing your consumer rights. Understanding how money works is the first step toward making your money work for you.
Work Out Where Your Money Goes
Once you've gone through a few personal finance books, you'll realise the most important thing is to make sure your expenses aren't exceeding your income. The way to do this is to budget. Not to mention, keeping your recurring monthly expenses as low as possible will also save you big bucks over time.
Save for a Rainy Day
One of personal finance's most important mantras is "pay yourself first". Even if you owe thousands in student loans or credit card debt, it's wise to find some amount - any amount - of money in your budget to save in an emergency fund every month. This can keep you out of trouble and help you rest easier if financial troubles are getting on top of you. Also it is a good habit to get into, try to treat it as a non-negotiable monthly "expense" and pretty soon you'll have more than just emergency money saved up!
Save for Retirement Now!
You need to prepare for your retirement well in advance. Because of the way compound interest works, the sooner you start saving, the less principal you'll have to invest to end up with the amount you need to retire. With retirement ages rising if you starting saving earlier the sooner you'll be able to call working an "option" rather than something you have to do!
Remember, you don't need any fancy degrees or special background to become an expert at managing your finances, anyone can do it!