There’s nothing like the feeling of that first pay check! You’ve been relying on that allowance for far too long and now it’s time to see what this sudden, seemingly vast wealth can do for you. Truth is, not much, if you aren’t careful. What seems like a small fortune now may become small potatoes in the not so distant future. Here are six great money tips for young people.
6. Responsible Spending
One of the most important lessons for your financial future is to exercise some discipline in money matters. Right from the get-go, it’s important to begin practicing responsible spending habits. Oh, you can still have a lot of fun out of life, just be aware of how you’re spending your money and what you’re spending in on.
5. A Taxing Situation
Taxes? Who cares about taxes when you’re working that first job? Well, you should. Whether you’re working part time or starting out on your career, it’s in your best interest to learn the tax system where you are living. Find legal ways to hold onto your hard-earned money. As you grow into adulthood, believe me, you’re going to need every penny.
4. Save Yourself Some Headaches
With no financial responsibilities, it’s easy to think of that pay check as a horn of plenty while you’re in your teens. And it’s all too easy to fall into poor spending habits. Then when life begins nibbling away at your earnings, those habits can get you into deep trouble. So start saving right away. Even if it’s just a small portion of each check. Tuck it away in a savings account and forget about it.
3. Learn Patience
Youth is all about getting everything immediately! Patience is for the birds. But it’s also for the smart money earner. Just like you have to wait for payday, you should learn to practice delayed gratification. Before you open your wallet, make sure you are spending you cash on something worthwhile, something you really want. Impulse buys empty wallets and will keep them empty for years to come. Make sure you open yours for a good reason. Patience also comes in handy with investing! DRIP Investing may look like a waste of time, but time is what you have and it really adds up!
2. Credit Where Credit Is Due
If you just have to have some expensive item, pay cash. Credit card companies target young, irresponsible spenders with juicy credit offers. They want a card in your hand and debt on your back as fast and as soon as they can get it. Pay cash, always. This will teach you how to save while teaching you the value of those dollars. Instant credit is an oxymoron. Piling up debts with carefree spending in your youth can set you up for years of debilitating payments. Credit cards = Plague. Avoid both.
1. Long Term Investment
The best investment you’ll ever make in life is in yourself. We’re talking education here. In most cases, this will mean going into debt for those school fees. However, this is the kind of debt you want to have. Get a good education and the world is your oyster.
This is a guest post written by Andrew Salmon from Individual Voluntary Arrangement.
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