Doesn’t it feel great when you finally turn 18? You feel like you have got the freedom to direct life in your way. This is the most transient period of life, where you are up for various new life experiences. In the next 4-5 years, you would embark on a transforming journey from a student to a professional.
The Importance of This Age Group:
Though you will get myriad choices on how to live your life, 18-22 years is one of the vital age brackets in terms of financial conditions. This is the age group where you need to establish financial stability. At this point, it may be a bit embarrassing for you to borrow money from your mom and dad. So, you have to identify the pathways that can help you achieve financial freedom.
Financial Stability is Important:
As a young adult, it may be a bit challenging for you to know the right ways of utilising your money. Your parents may be experienced in various financial schemes and plans, but they may not be able to guide you every time about the perfect ways of saving your money. Plus, they may not be able to guide you in depth about the modern financial pathways that can offer you financial freedom even before you turn 25.
Easy Ways to Save Money As a Young Adult:
If you are looking for some easy ways of investing and saving your money from a young age, here are some beneficial tips:
- Create a Monthly/Weekly Expenditure Report: If you want to track where your money is going, you should not delay making a budget. A well-devised budget is an ultimate way to know about your financial progress. It will show you the amount you can afford to spend and how much you need to save. It can hopefully also stop you from spending on things that you do not need. For classified expenditure, you can segregate the budget into different parts like food, medicine, commute and entertainment.
- Get a Savings Account: As we discussed earlier, this is an age of various new experiences. One of them is to visit a bank and open your new savings account. Even if you currently have a personal savings account, there’s no problem in opening another one. Use this account to save a small amount from the money you receive. This can act as a financial cushion that you can fall back on in times of crisis. Save us as much as you can before marrying or becoming a family man.
- Invest Wisely: As you may know, investment is the ultimate way to get financial stability and independence. So, you must invest wisely, in credible sources. If you consider investing in shares, you should ensure to contact a financial specialist. Also, explore the road less taken. Mutual funds have been a popular option for investment nowadays. However, you should consider the challenges and risks posed by them. Another valuable piece of advice would be to invest after a thorough study. Don’t copy the investment strategies of your friends, and avoid putting a large amount in a single investment opportunity.
- Educate Yourself on taxes: At this age, you may not get an income that would be taxed. However, it is advisable that you know at least the basics of income tax and other important tariffs. You don’t always need a tax expert to tell you about these taxes, you can get most information online. However, make sure that you consult a credible source before accessing the information.
- Keep a Fund for Emergency: Keeping a fund separately for emergencies is useful financial advice that you will get. This tip will work especially now when the world is reeling from a pandemic. The economic situation is volatile, and the market is slowly getting its grasp back. It will probably take you a bit to get to your dream job. During this period, the emergency fund can help you. These can come as extra support when the economy is a bit volatile. Start saving today, in multiple ways of investment. You can also put your money in a separate savings account.
- Control Your Expenditure: This is the most basic tip about financial freedom that you can get from your elders. It is a basic exercise that will keep you on top of your financial status. All you need to do is to determine whether you really need a particular item. Judge about how this investment can help you in the long run. Then go on with the expenditure. This will help you to stop spending frequently and keep a tab on spending that you do not need.
These are some helpful financial advice that you should follow as a young adult. These will help you to save money from a young age and cushion you during hard times. With these steps, you would probably save up a lot of money when compared with your friends. It would be great if you get assistance from any financial advisor present among your peers. They will be able to nudge you in the right direction in terms of investing and saving money.