Young Adults Must Take Control Of Their Finances

Wednesday, March 16, 2011, 2:00 AM | 1 Comment

Dealing with personal finances can be overwhelming at any age especially for young adults who are just starting out. The problem is the subject of personal finances and budgeting is not taught in school and colleges. So the young adults are quite ignorant about how to handle finances efficiently. Very few are trained practically at home how to go about budgeting and investing.

The first few years they seem to learn if at all from their own mistakes of spending more than they earn. Every one makes mistakes with their money. That happens at any age. However, you don’t necessarily have to learn from your own mistakes. You can learn from others’ as well.

The following mistakes are quite common and you should make extra effort to avoid them.

  • Avoid buying items you don’t need

    Don’t buy what you don’t need. Avoid buying on impulse. You pay interest when the purchase is made with credit card and when you can’t pay in full within the due date. You could be paying interest on that purchase for months or years to come.

    How to avoid impulse buying
    Research major purchases and comparison shop before you buy. Wait a day or two to think things over rather than making a quick and costly decision you may come to regret. And just be smart about how you repay.

  • Avoid getting too deeply in debt

    Taking on too much debt can be a drain on your mental and financial condition. Each year millions of adults of all ages find themselves struggling to pay their loans especially on credit cards.

    How to avoid deep debt
    Learn to be a good money manager. Recognize the warning signs of a serious debt problem. If you borrow money to make payments on loans you already have, and deliberately paying bills late, then you are getting into the problem of deep debt. You must stop buying more before you pay existing debt.

  • Avoid paying bills late habitually

    Once in a while you might miss paying a bill on time. We are all humans so that might be okay. Just don’t make it a habit paying every bill late. You not only pay more in interest but you pay late charges as well.

    How to avoid paying bills late
    Pay your monthly bills on time. Periodically review your credit reports from the nation’s three major credit bureaus. Make sure their information accurately reflects the accounts you have and your payment history.

  • Avoid having too many credit cards

    The more credit cards you carry, the more chances of you buying on impulse. Be aware that card companies still aggressively market their products on college campuses.

    How to avoid having more than 2 cards (4 maximum)
    Don’t sign up for a credit card just to get a great-looking T-shirt. You may be better off buying that shirt at the store.

  • Don’t avoid watching your expenses

    Make a budget and follow it. Use any method you want – computer-generated spreadsheets or hand-written notes.

    How to watch your expenses
    Make budget simple so you can always follow it for a long time. It doesn’t have to be intimidating or painful.

  • Don’t avoid saving for your future

    It’s important for young people to save money for their long-term goals. That may include buying a home, owning a business or saving for your retirement.

    How to save for your future
    Pay yourself first. Remember you always save when you save before you spend. You very seldom save when you spend before you save.

  • Avoid paying too much in fees

    You can pay $1 to $4 in fees if you get cash from an ATM that is not owned by your financial institution or is not part of an ATM network that your bank belongs to.

    How to avoid paying too much in fees
    Use your own financial institution’s ATM or the one owned by financial institutions that don’t charge fees to non-customers.

In a Nutshell
Even if you have advice available, it’s really up to you to take charge of your finances. It’s easy to become overwhelmed or frustrated. And everyone makes mistakes. The important thing is to take action.

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