Personal finance isn’t just something middle-aged people get into when there’s nothing on TV. It’s good to look into personal finance as early as possible. That’s the sort of smart thinking that’ll put you in good stead over the coming years.
Yeah, planning for the future sounds dull and it’s such a long time away, anyway. But young adults have some major influence in the world of money – you guys have a massive amount of purchasing power, with a whole different set of priorities to adults. So, getting those personal finance habits nailed down will pay off right now (and not some far-flung future where everyone is grey-haired and cantankerous).
Create a smart budget
Sure, everyone should maintain a budget – which forecasts outgoings based on income, so you can keep track of your cash. But your budget is going to differ in a few ways from your parent’s, right? Fewer, smaller bills; less income; different set of spending habits, so you’ll need to tweak the layout of standard budget templates. You can use any number of apps (some of which link to your bank account), but you can just as easily cook one up in Excel that helps you stay on top of your money in a way that precisely works for you.
Take advantage of your age
Being young means getting ID’d, like, all the time. Turn that to your advantage by getting your hands on as many young adult discount codes and loyalty schemes as possible. Tons of companies out there, from banks to train lines, offer ways for your money to go further, with cut prices and money off discounts. Ok, it’s sort of a bit ageist. But in an ok way.
Be realistic – you’re gonna buy fun stuff
Looking after your personal finances doesn’t mean stowing everything you earn into a bank, never to be seen again (after mum’s taken your rent, obviously). The art of money management is being realistic – whether that’s accounting for that impromptu trip to the movies or unexpectedly paying out for a screen fix after you dropped your phone. Set a little money aside each week or month that’s dedicated to paying for all the fun stuff you can’t miss out on.
Start saving early
Save. Save. Save. People say how important it is, all the time – probably while using their credit card on Amazon. And they’re right (just don’t tell them that). Start saving as soon as possible; it’s easy since most online banking offers some sort of ‘online savings account’ that pays a fraction of interest annually. But if you really want to make your money work harder, search around for ones with higher interest rates. Like those loyalty schemes, you may find certain banks offer great incentives for young adults who take out a savings account with them – especially if you’re intending to leave it in the bank to accrue interest over a number of years, rather than just create a holiday fund.
Say no to credit cards… sort of
Credit cards a tricky thing to navigate – especially for young adults. If you’re old enough to have one, you need to seriously weigh up the pros and cons. On the one hand, if you use a credit card, you’re going to go into debt, which isn’t great. On the other hand, they can be useful to have if you need cash in an emergency, and they also help boost your credit rating. The best course, then, is to apply for one, then use it as little as possible, while always paying back to the full amount (not just the minimum amount, which accumulates a monthly interest). It’s a win-win.