Money Management Tips For Youth

(This article appeared in April Issue of Youth Eye)

You are freshly out of college, and you were recruited on campus by the top company in your batch. You are euphoric due to your newly found independent status. But don’t get on a money-spending-frenzy to flaunt to your peers.

Because you are just beginning, you have a much greater chance to prosper by applying sound financial principles. This can ensure you don’t get into the common financial problems most people face.

Given the tough financial scenario, Recession could be just a few months away. If you want to remain afloat and let your life runs a smooth course, keep the following tips in your mind:

No credit cards, please! Sure they are super-convenient. But they pose an unnecessary temptation to spend. Credit cards make it very easy to spend money you don’t have, so you end up paying huge interests at the end of the month. Use a debit card, or still better plain old non-plastic cash, so that you are aware of how much cash is still left and plan your expenses accordingly.

Emergency fund: Without an emergency fund in place, you will be living from paycheck to paycheck. You can fall back on your emergency fund in cases of crises. Any unexpected expense like accident damage or medical bills can easily derail your financial plans. Having an emergency fund equal to your six month’s salary is sufficient. Of course, you can’t build it at once, but you should definitely start saving towards it now. Drop by drop.

Minimalist Lifestyle: Minimalism is in, and it’s healthy for your finances. Living frugally doesn’t translate to living like a monk, or giving up all your belongings. Instead it focuses on cutting out the unessential stuff in your life to make space for the vital ones. If you don’t need a home-theatre, don’t buy it just because everybody does. As my favorite blogger, Leo Babauta of ZenHabits suggests, a minimalist cuts out the unnecessary expenses to live comfortably, well beneath your means.

Invest early: Yes, retirement is more than 30 years away. But plan for it now; as it is much easier to do now when you have no family responsibilities. With sound investments, you can even take an early retirement in your 40’s to enjoy life ahead.
Best Online Resources to follow for investment advice are Onemint.com, savingsandinvestment.net, and getrichslowly.org.

Invest in Your Skills: The best investment would be the one in your skills. Shift happens. Best jobs in 2012 didn’t even exist 10 years back. Since the job scenario is dynamically changing, it will pay huge dividends to be prepared for the upcoming challenges in your profession.

Replace Consumer Attitude by a Creative One: This is not merely a money advice. While buying new stuff can give you momentary relief from stress, creating something new gives a lot more satisfaction. Give back value to the society. The Internet has made it really easy to learn, develop and deliver your product to a wider audience than ever before. Plus, if you’re good at it, you can get a comfortable income side by side from your hobby.

It takes time to incorporate sound money management features in your life style. But the benefits are certainly worth it. You can enjoy your life to the fullest without worrying about the future.
Dear readers, please share your views :)