Studies have shown that many young adults lack financial literacy. Learning about money management and income stability, making money mistakes, and affecting our future is necessary.
TPCN will like to help you with this learning curve by sharing 7 tips on avoiding money mistakes.
- Spending your salary
The 50/30/20 budget rule is a simple and easy rule to follow for more financial stability. Spend 50% of your income on rent, food, transportation, and bills, 20% goes to savings and debt repayment, and the other 30% goes to you and whatever you want. - Moving out early
Sure, it’s good to learn to fend for yourself and to learn independence, but you should be smart about it. Moving out would mean that you’d have to start paying your own rent and bills, you’d have to learn to cook for yourself, and your first home might not be as nice and cosy as the one you grew up in. These things should be considered when making this huge step in your adult life. And it is okay to wait a bit before moving out; once you have a decent, stable job with a decent and stable income, then you can feel a lot more comfortable moving out, as you’ll have the means to take care of yourself. - Trying to figure everything out at once.
Whether it’s college, work, paying rent, or all of that together, not many people find their calling and start their adult life on a high, and not many people have everything figured out.
Expecting your first job to be amazing, highly paid, and your ideal career, although that’s not the case in many instances.
Changing jobs, apartments and dealing with car troubles; These experiences will help in the end. It’s okay not to know where you’re headed or what you’re doing just yet: you will figure this out with time. - Avoiding risks.
You might not like your current job in retail or drive for Uber or Bolt, but you are too scared to quit because at least you have a stable income, and the job feels safe. However, if that’s not what you want to do with your life, you shouldn’t be afraid to take a risk, even if it’s an unpaid internship.
- Keeping up with wealthier friends.
It is important to know your limit and not get yourself into debt to match the lifestyle of someone wealthy. After all, success and money come at different stages in life for some people, and we need to be smart about them. - Not planning for retirement.
It would be best if you looked to put money into a retirement account as soon as you can because over time, it will gather interest, and you will find yourself with a lot of money to spend in your golden years.
- Ignoring Insurance.
It would help if you didn’t ignore insurance. For example, renter’s insurance will save you money in case of an emergency, like a break-in, a fire, or a flood. Medical insurance could potentially save you thousands of dollars in case something bad happens.
What is something money-related you wish you knew when you were younger? And what would your advice be to the younger people who are starting to learn all about money management?
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