Some time ago we came across a teenager who was given a school-assignment wherein he had to interview 3 adults at different stages of their lives and ask them what personal finance advice would they like to give their younger self. Well, the answers that came were pretty interesting. We’ve done our bit to make them easy to understand and have provided those in the form of tips for your use here in this article.
Reduce or completely do away with impulse spending
Being reckless with your spending habits can lead to plenty of buyer’s remorse, frustration and guilt later, not to forget a huge pile of credit card debt. You must strictly follow a rule like this one: if something is slightly over your budget, wait for at least a couple of hours before purchasing it; if it’s way over your budget, extend this wait to at least 24 hours; and if it’s something way-way over your budget, delay the decision by at least a week. If needed you must read about other people’s spending habits and incorporate their strategies in your own financial plan.
Starting saving early
Kids when they are growing up save for a long time before spending any money. Young adults and teenagers should be encouraged to do the same. In fact, in some countries like in Canada kids can file taxes and create contribution room in order to start contributing to their retirement savings plans as soon as they start earning. As a result, they get an excellent start on building their retirement fund, before even starting their career and family. It’s important to keep aside a budget each month that should go into such a fund. Here’s a Forbes article that talks about why retirement planning should start in your 20s.
Understanding the workings behind credit cards
A great multitude of people perceive their credit cards as a sort of safety net. And often it gets too late by the time they realise that debt and credit cards are something that can get them into a lot of financial mess. The only way to escape their hold is by decreasing your monthly expenses and increasing your income. While it might mean that you’d need to make some drastic changes to your lifestyle, it would all be worthwhile in the end.
Get life insurance as early as possible
Investing into life insurance at an early age when you are healthy and the premiums are affordable and low is a very good decision. Several life insurance policies also contain a grandfathering clause; hence, if the circumstances change drastically in the future and your health is affected you might be able to benefit from insurance policies that you had purchased when you were young.
Conclusion
A personal finance advice that is often ignored by people of all age groups, despite being so relevant, is to carefully evaluate all financial decisions, and to seek advice before going ahead with any choice. It’s very important to seek help of people you can trust so that you can steer clear of any costly consequences later.
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