Most young people tend to be less than careful with their money. They will often buy on a whim and worry about how to pay for something later. That type of behavior will cost a lot of money over a person’s lifetime. Here are some ideas for being more frugal.
You can save money by reducing expenditure. Sit down and make a note of where your money goes each month. Some bills, like rent and utilities, are unavoidable, but you will almost certainly find other expenditure that could be reduced or eliminated entirely.
If you are a student or have only recently joined the workforce, then you are unlikely to be checking out the best offers on the Chrysler 300 unless you have access to savings or finance. However, you might be wasting money regularly on other things. How much do you spend on food and drinks at cafes or restaurants? Work out how much you can save in a year by bringing your own coffee and food to college or work. See how much you can save by cooking at home rather than dining out.
You can save a lot of money by shopping around instead of buying things on impulse. This applies to everything from credit cards, to cars, electronics and household items. You can save even more by buying used items instead of brand new ones. Try to avoid the type of silly peer pressure that makes people splash out hundreds of dollars on the latest phone because it is full of features they will never use.
Make interest, don’t pay it
If you borrow money to buy a home or finance your education, paying interest is inevitable. However, you can avoid paying other types of interest. Credit cards are very convenient, but they also encourage people to spend money they do not really have. If you must use credit cards, pay the balance off each month. If you cannot control your usage and end up with credit card debts, stop using the cards immediately.
Many credit cards attract huge interest rates. For every dollar you spend, you could easily be repaying $1.35. Can you really afford this? By paying cash, or using a debit card, you can exercise better control over your spending and avoid paying interest.
Try to stash a little money away each month in a high-interest saving account. The best ones are those in which your money is locked away, and they also reduce any temptation you might have to dip into your savings.
Plan for retirement
There will come a point when you can no longer earn money through working. You will have to rely on the nest egg you have built up for your income. As people live ever longer, you could be looking at supporting yourself for decades after your retirement. It’s never too early to start putting money into a retirement scheme. The best ones are where the state or your employer offers incentives like tax breaks or matching contributions.
So, you now have some information that can set you on the road to careful money management. The key thing is to act on this information straightaway and start saving now.
Brandon Long works closely with graduates to get them on the right path for the rest of their life in terms of career, as well as offering financial advice and more.
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