Every age and every situation has different demands on financial planning. There’s no all-round package, and each individual should plan according to their lifestyle. Unfortunately, many young adults are financially illiterate and think there’s nothing wrong with living from paycheck to paycheck each month. Although there technically isn’t, however, lack of proper planning leaves them in financial ruins later in life. With the following five financial tips for young adults, a more secure future is on the horizon.
1. Practice good debt management.
As a first time earner, managing debts is vital, be it a student loan or credit card debt. Bad debt management can lead to a ripple effect which will affect your overall credit score. Debt management does not mean you should altogether avoid loans. However, apply caution by paying attention to the interest rate, due date, and fees. You must also be honest about your living situation so that the lender can devise a helpful payment strategy.
Let’s say, for example, you live in Oregon or Washington, and you’re looking to invest in a new car. Your best bet for convenient and quick access to personal loans Oregon would be from a company like NW Private Lending. They offer fast and creative lending solutions to individuals. Additional charges include a 3-point origination fee on the total amount, a $650 document preparation fee, and 1% interest per month.
Essentially, a $1,000 loan from NW Private Lending means you must pay the additional fees and still be on top of your monthly payments (which includes a 1% interest fee). Sticking to an affordable payment plan means you’ll be able to manage your finances better to prevent any future debt. However, if you’re ever behind, a simple phone call to discuss your living situation will help. Companies like NW Private Lending are known for their win/win deals, fair treatment, and reputable decision-making.
2. Invest in yourself.
Remember, you are your greatest asset, so do not hesitate to invest in yourself. While you’re at it, think long-term. Investing in yourself does not mean you should buy the latest shoes or cars. It means investing in things that’ll benefit you in the long run. Such investments include your education, stocks, and cryptocurrencies like Ethereum, Bitcoin, and Litecoin.
As a beginner to cryptocurrency, it can’t be obvious to know where to start. However, sites like Trading Strategy Guides provide beginner-friendly and well-researched articles. With their help, you’ll be familiar with Crypto terms like blockchain technology, eos, wallets, miners, etc. You’ll go from beginner to pro status in a matter of hours.
3. Have a budget and stick to it.
When it comes to maintaining good financial health, a budget remains your biggest ally. A sound budget ensures your expenses don’t exceed your income, so you avoid unexpected debts. Many young adults (and adults alike), see budgeting as an inconvenience and underestimate its importance. However, budgeting helps you track expenses better. With this knowledge, you’ll then make adjustments where needed and meet those financial goals faster.
4. Avoid lifestyle inflation.
Most of us know we should save, budget, and invest. However, no one tells us how to adjust our finances when there’s a bump in our paycheck. When you increase your spending due to an increase in income, it’s a typical case of lifestyle inflation.
No one’s asking you to be a miser. But, while it’s okay to improve your lifestyle, remember that your tomorrow is a product of today’s decisions. So, learn to live below your means and spend wisely.
5. Set up an emergency fund.
Irrespective of how low your income is, learn to pay yourself first. It’s wise to consider emergencies like job loss, car repairs, or unforeseen hospital bills. Emergency funds help reduce financial anxiety and prevents you from dipping into your savings in the event of a crisis. Typically, you should set aside 3-6 months of your living expenses.