During childhood, we rely on our parents to teach us everything we need to know to become adults – but many of us enter adulthood without a good understanding of how to manage one of the most important aspects of modern life; our own finances. Many young people have never been taught how to budget, invest money, manage debt or plan for retirement. Below are a few basic concepts which will help you on the road to financial freedom.
Financial advisors are not just for wealthy people
Getting advice from a financial advisor on how to manage money is not only something the wealthy do. A good financial advisor can help you reach your financial goals by guiding you on how to invest your money. Starting to invest early is key to your long-term financial success. See the top saving habits of wealthy people.
Budgets are freeing, not constricting
Budgets can help you manage your money more effectively, giving you more freedom in the long run. By managing your money consciously, you will be able to save and invest more money, that in turn can be used for your personal goals such as starting your degree or going on a once-in-a-lifetime trip. Learn how to create your own personal budget.
Build a good credit record
We are becoming increasingly dependent on using credit to make purchases. A good credit record affects the cost of credit - whether you’re contemplating buying a house or want to upgrade your car. Businesses and banks want to know that you will be able to pay back the loan. Your credit record will impact the interest rate you get charged on the money that you borrow - the worse your credit record, the more interest you will pay.
If you're having trouble making ends meet, it boils down to simply earning more or spending less
Don’t spend more than you earn. Sounds logical, right? People often overextend themselves and live beyond their means. We understand that it’s hard, but try to not spend everything you earn. Put money aside for those unexpected expenses. Tip: The bigger you can make the gap between what you earn and what you spend, the faster you’ll be able to reach your financial goals (if you save and invest the surplus money).
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