Financial Advice for youngsters in 2019!

We can’t help wonder how in most of the educational institutions, Personal Finance & Management is not covered as a subject for students in high school or for young adults alike. Financial Management is not only supposed to be studied as a subject in a particular stream like commerce but this is one very essential life hack for one and all no matter what line of education you choose to get into.

A recent survey shows that young adults in the early twenties mostly have no clue of what to do with what they have earned unless they are lucky enough to get guidance from elders in the family or from mentors at work. Most of them just end up spending up over weekends and have no note of the same.

A habit formation to manage finances wisely can take you miles. As the good old saying goes by, every penny saved is a penny earned. If you have not started tracking your expenses or saved enough yet, it is never too late. Read on to know the baby steps you can take to start now.

1. Record your expenditures-

   For three straight months, write down every expense that you make. By the end of the third month, make broad categories of expenditures made. For example- food, medical, education fees, yoga class, stationary, parties, gifts et cetera. Create a pie chart to understand where have you spending the most. This will give you a very fair idea of how you are spending your money and where does your priority lie. You might also understand where you need to cut down.

2. Savings-

   They say it’s one-third of your income, but if not that much, a certain percentage of your income has to get into fixed savings that you will not touch and let grow for bigger things in life. This percentage definitely depends on your life circumstances.

3. Self-study –

   Study well about taxes and insurance. Sound knowledge of the tax system of your country and how you can be insured against emergencies and health problems is an important factor for every earning individual. Talk to your elders, read financial mags and find good resources to learn more on these topics and get your thoughts aligned.

4. Investment Options-

   According to your life circumstances, you can study the various investment options that are available in the market even online. You do not need any fancy courses or any hi-fi financial mindset to get yourself educated on investment options and on how can you multiply your money only by investing right. This being a broad topic, you never know how this might interest you and change your financial path.

5. Make a budget-

   Refer to point 1. The pie chart will be your guiding force for you to be able to make your monthly budget. Self-control, minimalism and saving every penny is a valuable characteristic to build. Drawing lines and making a budget for your month can definitely help you save.
   That is when you know that you when to say no for fancy parties or not buy those pairs of shoes!

6. Debt Management-

   While some are fortunate to not have the burden of student loan, many start the debt cycle as early as in the teens. Paying off your debt and ensuring that your credit limits are not out of control is one of the most important parameters of personal financial management.

Eventually, you will also know about appreciating and depreciating assets and where it is worth having debt and where it is absolutely not!

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