The importance of personal finance knowledge to young adults
cannot be overemphasized. It is important for young adults to equip themselves
with essential personal finance knowledge to help secure their financial
future. Here are 4 money tips for
young adults.
Know Where Your Money Goes
One common thing with young adults is the complaint of not being
able to account for how quickly their money 'disappears' from their bank
accounts. A good solution to this is for young adults to pay more attention to
exactly how they spend their money, or where their money goes. The best way to
do this is to have a budget, and to be disciplined enough to ensure that the
budget guides every single Naira that is spent. Once this is done, young adults
will soon realize just how much of an impact small and seemingly 'manageable'
changes in spending will have on their finances; it will then be easier to
better manage expenses and keep recurring monthly expenses as low as possible.
Start Saving For Retirement Immediately
Because of the way compound interest works, the sooner a young
adult starts saving for retirement, the less principal will be needed to be
invested to end up with a reasonable retirement amount. This will make it
easier for a young adult to be able to call working an 'option' rather than a
'necessity' much sooner than expected. Therefore, young adults should ensure
they have a good retirement scheme going as early into their career as
possible.
Understand How Income Taxes Work
As a young adult, even before you get your first paycheck, it is
important you know how income taxes work. This is so that you will be able to
properly calculate if whatever starting salary you are being offered by a
company will be enough to meet your financial goals and obligations, after
taxes and the like have been deducted. Thankfully, there are plenty of online
calculators that can help with this if your math skills are not so great.
Paycheck City is one of such online calculators.
Learn To Be Responsible With Your Money Early On
There is a popular saying that goes along the lines of 'if you
don't learn to manage your own money, others will mismanage it for you'. There
is no financial tip more important than this one. You simply need to learn to
be responsible with money and take better control of your financial future.
Learn to read a few basic financial books to better understand how money works,
and use that knowledge to make money work for you. If you understand how money
works and know what you are doing with money early on in your life, you will be
able to avoid having to lament unnecessary 'stories that touch' to friends and
family when things inevitably go awry with your finances.
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