Until personal finance becomes a subject in high school or college every young adult needs to learn how to manage their finances. Unfortunately, most don’t and as a result go out into the world without any idea on how to manage money. Here are a few tips to get your started:
It is important to learn the art of delayed gratification. It will make managing your finances and saving money that much easier. Credit cards make it very easy to buy something immediately, even when you cannot afford it. Avoid those traps and only buy something that you have the money for. If not, then save up and buy it.
Setup an emergency fund
One of the smartest mantras in personal finance is “pay yourself first”. Regardless of how much your commitments are, always put away something. The starting point is your emergency fund. Set yourself a target of an emergency fund that will cover your expenses for three or six months. Once that target is hit, then look at other saving accounts.
Start saving for retirement
Thanks to compound interest, the sooner you start saving the less money you will have to contribute to hitting your retirement targets. The sooner you hit your retirement target the sooner working becomes optional and you can do anything else you want. Some companies provide retirement plans for their employees. This is beneficial as the money goes in pre-tax and some even match your contribution.