7 Tips For Teens and 20’s to find financial freedom
Contributed by: Patricia Sanders, a freelance writer. She is associated with Debt Consolidation Care Community. She loves to write on various topics, especially finance. Her writing gives useful suggestions and financial insight to solve their problems.
How can teenagers stay top of their finances?
It needs no mention that we all love money and love to spend it. What you must think is whether you would love to have a little money now or later? If you’re just in your teen’s or 20’s, knowing and understanding the significance of money is very crucial. Making the transition from a high school student to a college student can often become confusing. Apart from a lot of changes, there comes a huge amount of responsibility. You will start facing financial challenges and tackling them is your responsibility.
Save money successfully in your 20s?
Twenties is the right time to practice good financial habits. Because at this age, everyone should prioritize their money to make a smooth financial life. If you have a habit of spending more than what you earn, it would be really difficult for you to fight debt. The major reason that people incur debt is they don’t know how to live within their means. If you have a couple of credit cards in your hand and indulge in heavy shopping without thinking about future consequences, then you’re in trouble. Once you fall in debt, you’ll realize how difficult it is to get rid of it. It is better that you start building new habits to become a money saver.
Some good financial habits help you to stay financially independent not only in your 20’s, but throughout your life.
- Determine your cost of living
Make a clear list of the mandatory monthly expenses so that you get to know where your money is going. Things like transportation, utilities, parking school supplies, debt repayment will fall into this category. Once you get a clear picture of where your pennies are going, you can clearly understand the significance of managing your finances on your own.
- Set up a milestone
You should have some reasons to save money. Think of what do you want, your goals, a home, financial independence, or freedom from student loan debt? Take your first step and achieve them, one step at time. Your desire will inspire you to save money and thus you can build good money habits as well.
- Give yourself a deadline
Always fix a date by which you can meet your goal. This will give you a push to save money. Think about your goal once a day. This will motivate you can avoid big expenses and stay within your budget.
- Create a budget and modify accordingly
Budgeting helps you spend less than what you earn. This helps you to save more as well. As you spend less and save more, you incur less debts and even if you do incur some, you’ll have the money to pay those off. You’ll have to make a list of your income and your expenditures in order to create a budget. A budgeting calculator can help you prepare your budget. If required, you’ll have to analyze and also modify the budget from time to time due to the changes in your income and your spending.
- Use your brain
Sometimes, trick can help us to save money even on a tight budget. You just need to use your brain to find out some ways. For instance:
Coupons are a great way of saving money. You can collect coupons from newspapers, magazines and even some websites, which allow you to download free coupons. You can use these coupons to buy items at a discount. Check out couponing websites, local couponing groups and even Facebook couponing communities for more information.
- Using cash for shopping as much possible
One of the major reasons why people get into debts is credit cards. When you have a credit card in your hand, you can barely resist the temptation of buying something that catches your fancy. This is easy to do without thinking whether you need it. Instead, if you use cash for purchasing, you would not be able to overspend much, even if you want to. Carrying a limited amount of cash prevents you from overspending.
Eating out, ordering food or buying lunch can make your wallet considerably lighter. It is better for you to skip eating out, except for those very rare occasions when you want to go out to celebrate a special event. You should also carry a lunch bag to work so that you don’t need to buy food.
- Setting up an automatic savings account
Set up an automatic savings account to avoid spending money on something else. You can ask your employer to directly deposit a certain amount of money from your salary into the savings account. Pay yourself before paying others. Start small with just 1%-2% of your salary. Once it becomes a habit, you’ll see how fast your money grows.
- Fight with debt
You should work on your financial obligations as soon as possible. The sooner you pay off your debts, the quicker you can start saving money. Try to pay the high-interest debts first. Fix your credit card and student loan debts now.
- Give priority to your career
Take your job seriously because your profession will give you a smooth financial life at the age of 30. A good job is a steady source of income. Work hard and acquire advanced skills in order to stay financially secure in the long run.
Remember, less is more. Become more disciplined and lower your expenditures as much as possible to save money. In addition, lower the usage of credit cards as these incur higher debts. This way you can discover your own path to handling money.