Tips to Help Young People Control Their Finances

Monday, April 30, 2018, 6:00 AM | Leave Comment

Turning 18 years-old is one of the biggest coming of age moments for most people.

While most adults still consider 18-year-olds to be teenagers rather than adults, by law, once teenagers turn 18, they gain the rights of any other adult. At this age, some people are already employed and living on their own, and others are living with their parents and may not have finished high school yet.

However, this is still a very early point in life and while everyone makes mistakes, it’s important to get on track and make the right decisions for the future as early as possible.

  • Choose Debt Wisely

    Young adults are typically not sufficiently prepared for the freedom they receive once they come of age. Young adults who apply for college right after high school immediately begin to receive a large number of credit card and student loan offers, which can be a tempting source of financial freedom.

    These can be used in moderation and for important purchases, but it’s not uncommon for the line between necessary and unnecessary to become blurred with borrowed money.

    • Credit Cards

      Credit Cards can be a blessing or a curse, but more often, they are a curse. They’re important to have in a pinch, such as if a car experiences a tire blowout, or for an unexpected medical expense.

      However, it’s crucial to remember that that money is borrowed directly from the bank and needs to be paid off as soon as possible to avoid building up debt.

      Nobody would borrow money from a bank for something they don’t need and can’t afford, but the personalization and ease of credit cards makes it very easy to forget it’s not the individual’s own money they are using.

    • Student Loans

      Student loans are the same kind of thing. At times, young adults are offered thousands of dollars in student loans and given free will of how to use them.

      While books and classes can cost thousands of dollars, occasionally some semesters are less expensive than others, and students have money leftover from loans that they simply end up spending on luxuries that are not even school related.

      While it may be tempting to spend leftover student loan money, students also have the option to return the leftover funds, which will eventually help to handle student loan debt.

  • Avoid Bad Habits

    There are many bad habits when it comes to how people handle their finances, and also bad life habits that can have long term effects on an individual’s financial state.

    These include not checking bank statements, ignoring bills, and forming money draining lifestyle habits.

    These all begin as minor offenses that can snowball into a situation that becomes much more difficult to handle than if these circumstances had been addressed as they came up.

    • Stay in Control of Statements

      It can be anxiety inducing to check bank statements, especially if a person is expecting to see something they don’t want to see, such as low funds, an overdrawn bank account, or more money spent on a weekend out than intended.

      While these situations can be stressful, keeping track of them will prevent exacerbating the problem, and will help a person remain accountable for their spending. Similarly, ignoring medical statements or old bills will make it difficult to achieve peace of mind — it’s better to simply take control of one’s finances.

    • Substance Abuse

      The beginnings of financial independence are also typically followed by the freedom to explore mind-altering substances.

      Consuming alcohol regularly can be a real money drainer, but this has the potential to cause more problems than simply taking some of a person’s expendable income.

      Drug and alcohol addiction costs thousands of dollars each year, and is known to put people in serious debt.

      Often, people will consume drugs and alcohol to cope with financial stresses, an unhealthy coping strategy that has the potential to turn into a vicious cycle of financial stress and addiction.

  • Budget for Happiness

    It’s important to have a budget to track spending habits. Financial responsibility is a huge part of everyone’s life, especially when funds are limited, and therefore, it’s important to know how much money to spend each month on various activities.

    While it’s important to spend money carefully to avoid debt, it’s also important to spend money on fun and relaxing activities.

    • Spend Money

      One way to budget for happiness is to say yes to new experiences. Set apart a portion of expendable income to be used on dinner with friends once a week, or on a trip to the fair.

      While these are unnecessary expenses, it’s important to reserve funds for blowing off steam as this is beneficial to mental health.

    • Save Money

      It can be difficult to save money when a person is having trouble making ends meet. However, if it’s possible, attempt to save even $50 or $100 each month so that in case of an emergency, there is a small reserve available.

      Most banks offer automatic transfer services, so there is no need to remember to do it.

It can be a struggle for young people who have very limited life experience to control their finances.

For many people, being financially responsible is something that only comes with time and hard lessons learned. Being conscious of what kind of debt one is accruing, as well as ways to lessen the lump sum one will eventually need to pay is one step toward financial stability.

Avoiding bad financial and life habits is also helpful in ensuring one remains in control of their finances.

Finally, budgeting for happiness and saving money will help balance out life’s stresses. While financial freedom may seem like something that comes with a credit card, it is only truly attained with financial stability and responsibility.

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