Advertising
Advertising

All Young People Should Learn These 6 Money Tips

All Young People Should Learn These 6 Money Tips

In today’s world, one of the most important things a younger person can do is start to learn how to manage their money wisely. It is too easy to get buried in debt, and it seems almost impossible to get out of it. By checking out these 6 tips, you can get yourself on the right track to financial peace of mind.

1. Create a budget, and stick to it!

You will see this tip on any blog you read, and there is a good reason for that. Make sure you actually write down your budget, and prioritize everything. This may help you keep from dipping into your bill money or your savings account. Another tip you can try is to over budget if you can. This way, if something unexpected happens, you wont have to go over your budget, but if there are no surprises, then you have extra money left over.  For more tips on budgeting, check out MintLife Blog.

Advertising

2. If you don’t have a savings account, then start one.

Its very important to have a savings account for emergencies. I was always taught to try and save up at least 3 months worth of pay, just in case you lose your job, or have to take time off. I understand its hard to just stash that much money away all at once, but a little money here and there can really add up. One easy way to build your savings without even noticing is to have an automatic transfer set up from your checking to your savings. If you have direct deposit, then you can have, for example, $25.00 switched out automatically, and you hardly notice. For more information about savings accounts, click here.

3. Beware of Credit!

Credit is such a powerful tool to use in the financial world and can really help you when purchasing a new vehicle or home. It can also be fatal to your finances. According to research done by Debt.org, the average credit card debt of young people between the ages 18-34 ranged from $3000-$5200. In today’s world, they make it too easy for people to get a credit card or some kind of “buy now, pay later” deal. While it may sound like a good idea at the time, it is what really hurts people years down the road. People think they have all the money in the world and swipe that card like they will never have to pay it back when, in reality, they do have to pay it all back, plus interest. If you do use credit, make sure you have the cash to back it up.

Advertising

4. Live within your means.

Try to keep your cost of living below how much money you actually make.  Suze Orman, a financial guru also suggests cutting your spending by 10%. By doing this, you will end up with extra money at the end of the month even after all your bills have been paid. This also means that if you get a promotion and a raise at your job you should try to continue to live the way you have been before. This means you will have even more money to save at the end of the month. If you unnecessarily increase your cost of living and you lose your promotion and raise, you just might not be able to afford everything anymore. So its best to just play it safe.

5. Invest in your retirement.

If you start putting money into a 401k or an IRA while you are still in your 20’s, you will have contributed more money overall than you would have if you started in your 30’s or 40’s. This also means your retirement will have had more time to collect interest and make you more money. If you want to learn some good tips on how much you should contribute, check out this link.

Advertising

6. Invest in health insurance.

Health insurance is a must. If you don’t get it through your employer, you should try and get it from somewhere else. According to a survey done by The Common Wealth Fund, nearly 2 out of 5 adults between the ages of 19-29 where without health insurance for all of 2011. Sixty percent of those claimed to have not gotten needed healthcare because of their inability to pay, and half of them reported problems paying medical debt (see more at The Commonwealth Fund website). If you have some sort of coverage, you can drastically reduce the cost of medical bills and keep yourself out of debt in the unfortunate event that you need to seek medical care.

Keep these 6 money tips in mind when managing your finances. You will be a lot better off in the long run if you take control now, rather than being at the mercy of debt collectors!

Advertising

Featured photo credit: http://pixabay.com/en/users/itkannan4u-151888/ via pixabay.com

More by this author

Michael Daws

Aircraft Painter, Sports & Lifestyle Blogger

20 Things To Make A Relationship Last 5 Ways to Deal with Snow Runoff in the Garage 25 Different Ways To Eat Hummus. #5 Is Absolutely Authentic! 25 Creative Products That You Never Knew You Needed 10 Shocking Health Benefits of Juicing, With Recipes!

Trending in Money

1 How to Nix Your Credit Card Debt in Less Than 3 Years 2 Top 5 Spending Tracker Apps to Manage Your Budget Smart in 2019 3 How to Use Credit Cards While Staying Out of Debt 4 How to Use Debt Snowball to Get out from a Financial Avalanche 5 How Personal Finance Software Helps You Get More Out of Your Money

Read Next

Advertising
Advertising
Advertising

Last Updated on April 3, 2019

How to Nix Your Credit Card Debt in Less Than 3 Years

How to Nix Your Credit Card Debt in Less Than 3 Years

Debt is never a fun thing to be in. But, there are many actions that you can take that will help you rid yourself of the burden of debt once and for all.

By coming up with a set plan, eliminating your debt can feel much easier than constantly thinking about it.

This post will provide some tips on how you can do this to help you nix your credit card debt in less than 3 years.

Hint: there are ways that are easier than you think.

1. Consider Consolidating Multiple Credit Cards If Possible

This may not be applicable to you, but if you have multiple cards – it is something to consider. Keeping up with multiple bills is time consuming.

It will depend on the balance you have on each. Consolidate ones you can but do not do it to the point that you get too close to the maximum limit. Also, it is ideal to pick the card with the lower interest rate.

Consider if there are any fees or alternatively, rewards, with transferring a balance to another card. Watch out for fees. Note that some cards offer rewards for transferring a balance to them. This is extra cash that can help go towards paying off your debt.

Advertising

Having one or two cards can make nixing your debt much simpler than keeping up with the balance of a bunch of cards. Keeping track of paying the minimum towards a bunch of cards is time consuming. Spend the time to consolidate instead to make the overall process simpler going forward.

My tip: Have one main credit card. Have a second one that you use for necessities – such as groceries or gas – that offers rewards for those purchases (a lot of cards do) and set the second one on auto-pay. You should be able to pay off a smaller amount on auto-pay if it is a necessity. If you think you cannot, then you may need to cut down a lot on expenses.

Why do I suggest doing this? Having one thing set to auto-pay is one less thing to think about. One less thing to waste time on. Same idea with consolidating to one main card. Tracking down too many is a hassle.

2. Try to Pay the Full Balance You Spent Each Month at the Very Least

You need to pay off the amount you are spending each month when that bill comes in. This is the amount you spent THAT month.

Do not let the debt keep accruing while you work on paying any unpaid debt that has accrued. It will become a never-ending battle. Try as best as you can to be current on paying for each month’s expenses when that month’s bill comes out.

If this is a strain, consider why. You may need to cut expenses. Or you may need to consider other cards. Or look at where this money is going.

3. Pay Extra When You Can – Every Small Amount Counts

This cannot be emphasized enough. If you are looking at a lot of credit card debt, it can look daunting, but each extra amount that you can put towards the debt will really add up – no matter how small it is.

Advertising

It does not just reduce the principal amount that you have left to pay off, but it reduces the amount that is collecting interest. You will always save money with that reduced interest.

4. Create a Plan on How to Pay Extra

Back to the main point, having this plan is giving you one less thing to think about.

This plan should be a plan that works for you. If it does not work for you, your spending habits, and your views on debt, then it will not be an effective plan.

For instance, if a set plan of an extra $50 (or another amount that you know you can afford) works for you, then do that. Set that aside every month and pay that extra amount. Treat it like a bill. Choose an amount that works for you and pay it like clockwork as though it was a bill you had to pay each month.

Little amounts will not nix it entirely, but they will help tackle it and having a set plan can make it less of a chore. Creating a new plan of how much to put towards it each month is an unnecessary added stress.

5. Cut out Costs for Services You Do Not Use

If you are signed up for subscriptions that you do not use because of some free trial or for some other reason, cut it out. Your overall financial position will look better.

In turn, that will make cutting your credit card debt easier. Look at your statements to find these expenses. If you do not use them, you may forget you are paying some unnecessary amount each month. Cutting it out can really add up in savings that you can put towards other needed expenses.

Advertising

6. Get Aggressive About It

Consider these points:

Depending on the interest and the level of debt, you may need to give up a few indulgences. For example, instead of ordering delivery or going out to eat, cook at home. Everything adds up.

Other things may be more of a sacrifice. It may be a trip you wanted to go on, or a daily latte habit you’ve picked up. In these instances, consider how important it is to you and if it’s worth the sacrifice. And if it is a costly expense, think whether you can wait to indulge.

Cutting an extravagant expense can really help make a dent in your overall debt. Try not to add to debt when you are trying to pay it off. It will be a never-ending battle. Make it less of a battle with these tips and it will feel easier.

Bottom line: Do what you can to make this process easier for you. Implement steps that do this. It takes time now, but will help overall. Also, keep track of your spending and paying down of your debts. Which is the next point.

7. Reevaluate Your Progress at Set Intervals

Doing a regular check-in can help you see your efforts pay off or maybe indicate that you need to give this a bit more effort. If you check every 3-6 months, it will not feel so much like a chore or feel so daunting.

By doing this, you will be able to better understand your progress and perhaps readjust your plan. Bonus: if you see it pay off, it will feel great to do this check-in. You will get there.

Advertising

Finally (and most importantly)…

8. Keep Trying

Do not get discouraged. Pushing it off will make it worse. Just keep trying.

Once your debt becomes lower, each monthly payment will reduce the balance more. Why? You are paying less towards interest. It will be a snowball effect eventually and it will become much easier to manage. Just get to that point. And know once you do, it will feel easier and motivating.

Start Knocking out Your Debt Today

The best way to eliminate debt is to get started right away. Begin by implementing the above steps and watch your debt just melt away. Try out some of the above strategies and see what works best for you. Soon you’ll be on your way to a debt free life.

More Resources About Better Money Management

Featured photo credit: Pexels via pexels.com

Read Next