One of the most effective ways of managing finances is to be financially literate. There have been multiple scenarios of people seeking advice from individuals who at some point misled them in one way or another. Don’t be one of them. Below are some tips you could follow to boost your literacy.
1. Be Humble
Young people tend to be overly excited when they receive what they believe is a relatively high amount of money (usually first salaries); as a result, they go around rubbing their ‘big money’ archive all over people’s faces, living a luxurious life. A young, financially alert chap should know that not everyone will be dearly happy for their earnings, but some of the people you tell are more likely to judge you for not lending them money yet notice you throw it away daily. It is therefore important to take heed that these excitements are temporary, our brains normally get used to new acquisitions, and you’ll soon notice it’s just normal to own such amounts of money. Don’t be overridden by excitement; “Behave like you cannot afford bread until they realize you own a bakery.”
2. Save and Invest
Opening a savings account is a very crucial point when it comes to managing finances, and the best part of it is that you get interest back! A young adult should know how the compound interest in these accounts works and acknowledge that the sooner one starts saving, the less principle they will have to invest to obtain the amount they need to retire. It would be best if you had your savings automatically set aside every time you receive salary payments.
Some people opt to hide money in their houses in the name of ‘saving’ which is rather ancient and conservative. One can rather invest the money in at least 15% growth stocks for a start and plan on shifting the investments to better stock-exchange markets to secure their future assets. Just let your money be in circulation so that it earns interest; you wouldn’t want to be a victim of inflation during your retirement.
3. Mind Your Health
As we all know, a person’s health is their priority, and it wouldn’t make sense for one to own billions of money when their health is unstable and deteriorating; desist from unhealthy habits like smoking, drinking, and taking drugs because these come with longterm illnesses like cancer and in addition, slowly sweep away your savings. Suppose you have enough money to cover your expenses and an investible income; apply for a health insurance cover to avoid wasting your savings on treatment. In that case, you can also buy a long-term skilled nursing insurance if you intend to go into a nursing home in your old age. However, according to the affordable care act (ACA) that was passed in 2010, a person under 26 can remain depending on their parent’s health insurance just to be on the safe side.
4. Tax
Any salary-earning individual needs to know the amount of money that is deducted from their monthly salary as tax. This allows you to account for the exact amount of money you will receive on your account after the taxes are deducted. These taxes vary according to a country’s economy and obviously the amount of money one earns. If you are unsure about how this tax issue goes, try downloading calculating tax applications online and find out more on your own after all; that’s part of the quest for financial literacy.
5. Time
Maximize the time you are supposed to be at work, try to beat deadlines, and avoid procrastinating responsibilities. By being an excellent time manager, you become more productive and can be able to spare a little more time away from work, therefore enabling you to relax. As a young earner, you should acknowledge that success is slow and steady progress. The famous Coca-Cola Company sold only 25 bottles in their initial year but look where they are now; Rome too was not built in a day. Things will get tough sometimes but hang in there! Be patient, it’s just a matter of time.
As you strive to thrive financially, dropping some vices may pull you backward. Avoid buying too many luxuries that you won’t even use, and cease from getting credits from different people. Adapt to a simple lifestyle!
What else have I left in this article? Let me know in the comment section below.
you can also check : never suffer from benefits of investing early again
