At 20, in our youth, even with all the lessons we receive from our parents and our family, mistakes are also very important so we can learn what it means to be an adult. As much as these slips help us grow and understand more about who we are, we do not always have to wait for them to teach us. Especially when it comes to taking care of our own financial life, we can prepare ourselves and anticipate a more comfortable future.
Personally, I discovered in the twenties that when it comes to money, prevention is better than cure. After all, what we do in our youth is crucial to knowing how we will be at age 30. Below are the main lessons I have learned that are certainly useful for all ages.
Start saving early
It seems difficult, but in the long run, it’s the best thing to do. You will not be forever, and adulthood requires a great investment. Unforeseen are common and you need to be prepared for when they happen.
You may be surprised by a change of residence, city, or may need to pay debts related to your studies, to college. Maybe you need to take some expensive tuition or just want to take some traveling. There is no way to predict any of this, but there is a way to prevent it.
If you get some income now, save at least 30% of it every month. If it’s your parents who support you, try to cut down some expenses and start saving that money. Have a savings or a bank account where you can deposit all that fund. Believe me, it will be worth it.
Control your cards
The number of young people with credit or debit cards is higher each year. The number of Brazilians between 16 and 24 years old who had a bank account rose from 26% in 2008 to 40% in 2013, according to a survey by the Brazilian Association of Credit Card Companies and Services. It is a very dangerous situation, since it is very easy to lose control of the expenses on the card.
So if you can not live without a card, use it responsibly. Before leaving for a party or making a purchase, put a spending limit. It is very easy to be distracted and to waste more than you can. The best thing to do is plan and monitor your income and your bank moves daily.
Learn how to cut back on excessive consumption
Before you buy anything, think about it: do I really need this? One of my biggest difficulties was controlling my willingness to buy what I do not need. And this is, in fact, one of the greatest financial vices to overcome in youth.
Identify your addictions, what you spend most on your income. Reconsider your debts and think about the myriad of options where you could invest that wasted money. As soon as you start reducing your spending, you will realize that it is easy to detach from certain things.
Compare prices and rates
In addition to maintaining a security fund and reducing superfluous expenses, there are also other ways you can improve your relationship with money. One of the biggest allies in the domestic economy can be of great help when you consume any product or service: comparison.
Before closing any payment, look for other offers and analyze the different values that will appear, whether in physical stores or the internet. Another healthy way to choose how to consume is by the form of payment: avoid piecemeal and plan your finances to always pay cash.
Invising on what will you do good
Like I said, everything in our 20s is crucial when we get to 30. You want to be prepared for this phase of your life and so you better start now.
Keep your money an investment in education or, if you do not have a health plan, look for the one that best suits your needs. They look like things that will not affect you right now, but they will be essential in your future and will save you huge worries.
In order for you to be able to take all of these care without getting confused, look for some way to organize your spending and use a spending spreadsheet in which you can easily view them. After all, this will only work if you have control of your own finances.