No matter what age you are there are important financial lesson that you need to master so that you can achieve your financial goals, whatever they might be. Some of those lessons are:
Sometimes it can feel like your money is like sand passing through your fingers. It’s so easy to spend but managing it and even saving it are a whole different matter. One of the hardest lessons but the most important one to master is your budget. Spending little bits here and there can amount to a significant amount over a month if you don’t keep track of it. It is worthwhile to keep a diary of your spending to see where you can eliminate any unnecessary spending. Set yourself a budget to operate in and shopping around before you buy will save you money that you can use to pay down debt or save towards a financial goal.
Setting goals and building your Financial Plan
Do you know what your financial goals are? If you don’t you should take some time to really think about them and once you have decided what your goals are, write them down, do some research to see how much they will cost you and work out how much you will need to set aside each month to realise those ambitions. Remember to review your goals and written plans on a regular basis to ensure that you are on track.
Reduce your short term debt
Short term loans, overdrafts and outstanding credit card balances generally incur high interest rate repayment rates. Having a goal and saving towards it makes more financial sense than having to make high repayments on a loan. If you are managing your budget then you may have identified some money that you can use to repay any short term debt off quicker.
Set up regular savings
Saving is a habit and the easiest way to establish this habit is to set up a direct debit or standing order that pays in to your savings accounts as soon as you get paid. You will find that you will adjust your spending habits to live on the money that you have left after this happens. Depending on your financial goals, you could set up a number of savings accounts or ‘pots’ and allocate them toward some short, medium and long term goals that you might have such as your ‘emergency’ fund, going on a big holiday or making a down payment on your first home etc.
Learn about investing
There are so many different options available to you to invest your money. Choosing an investment that is right for you is important. Investing doesn’t mean that you need a large sum of money to start. You could start with your regular savings and invest in a fund that suits your appetite and your tolerance to take on risk that makes your money work for you.
Start your Retirement Plan
It’s never too early to start planning for retirement. While it seems a long way off now, time will pass by very quickly and any amount that you put away now, could accumulate to a significant sum by the time you retire. Set yourself a target to put a percentage of your salary away each month so that as your income grows over time that your retirement savings amount grows too.