Managing Money Tips – Young Adults
I know, I know, this post was specifically written for young adults. But as someone who’s lived through my 20’s, 30’s and is now halfway through my 30’s, I can safely say there are some great #managingmoneytips for any age in this contributed post. Then again, the earlier you learn to manage money, the better. You don’t want to land up where I did in my 30’s (jobless, kinda homeless and drowning in credit card debt), trust me.
Managing Money as a Young Adult
Managing money in your twenties can be hard. Suddenly having an income and bills to manage will be a culture shock, but with these handy tips, you’ll be a pro in no time.
1. Set goals
If you aren’t sure where to start with changing your financial habits for the better and knowing how much to save each month, come up with a goal. You and your family might be looking at moving house in the next year or two, you may want to get married, or you may simply want a holiday later in the year.
Work out how much money you need for your goal, give yourself a time frame and this will help you decide how much money you need to save each month. It will also give you the extra motivation to save.
For example, if you wanted to move house, you can save up 10% of your earnings for a year or two between you, and then put this towards your deposit, moving costs with International Removalists like Chess Moving, solicitors fees and everything else you need.
2. Use cash
One of the things which cause people to spend more money, in general, is the fact that everyone uses their debit or credit card online and in store.
However, when you are using a card to pay for everything you aren’t seeing the cash leave your purse. Bring cash out with you for a day and just see how it feels to buy what you normally buy during the day. You will immediately notice a difference and you will be likely to curb your spending due to seeing the cash leave your person.
3. Treat yourself
Being smart with money doesn’t mean that you suddenly have to become a hermit who never goes out and never does anything apart from eating in at home. You are entitled to a treat because you are being smart with your money.
Treat yourself to a meal out or a takeaway once a month, go on a little shopping spree on the city for the summer, or buy yourself and your family a new gadget for the house. The whole point of being careful with your finances is to allow you to treat yourself and not feel guilty.
4. Spreadsheet it
If you are a very visual person, you might benefit from creating a spreadsheet with your spending on. This can include all of the income you have every month, every bill, mortgage payment, car payment and every other expenditure you automatically have each month.
Once you see the value in this you will be able to see how much money you have left for savings, food, and lifestyle. Try to cut down on food and lifestyle a little and make more room for savings. Being able to see what you are spending will make you more conscious when you leave the house each day.
5. Emergency fund
Everyone should have an emergency fund to fall back on when times get hard, and you should start right away to ensure that you are safe if anything ever happens. Let’s say you go into work tomorrow and become ill or injure yourself, do you have enough money to support yourself for a couple of months? If not, you need to start saving up right now.
6. Reduce your bills
When we look through monthly spending, one of the things we don’t look to change is the cost of our energy bills. If your energy bills are looking pretty steep at the moment there are a few things you can do to reduce the cost.
- Firstly, you can have solar panels installed on your roof to decrease the cost of electricity.
- Secondly, you can start using less energy during the day and invest in energy-saving light bulbs for the space.
- Lastly, you can compare different energy providers online and look into switching your provider. You will often benefit from an introductory rate when you do switch so this will be a big benefit to your finances.
7. Overestimate your spending
One of the clever tactics you can bring into your planning for the month is to overestimate your bills and your mortgage payments.
Even if you know that to cost will be the same every month, add another $50 or round the figure up and leave this to the side, of spending a penny of it.
Over the months these small amounts will start to accumulate and you will end up with more and more money in your current account. Once the value reaches a decent figure you can transfer it to your savings account and start all over again.
8. Get everyone involved
If you want to make better money habits for the whole family, you need to get the whole family involved in your decisions. Sit everyone down one night and go through your bank statements to see where everyone is overspending and how they could cut down on costs.
You can give everyone a target to save by the end of the year, and this will motivate everyone in the family to get involved in your good money habits and to stay on track with their finances.
How are you doing on these 8 points? Have you set some goals, are you using cash instead of credit, do you have some savings stashed away?