Financial Tips For The Younger Generation [Part 1]

More often than not, it is what people do in the early days of their lives that they will reap as consequences at the later years of their lives. Sadly, a lot of young people are not taught to manage their finances properly and they grow up being virtually clueless about what finance really means. There are more things to understand about money than can be taught in school and the young ones should be exposed to these details as early as possible so that it will help them to secure their future effectively. Here, let us look at some tips about finances to get handy with. Note, this can also be applied by the older generation because there is no time that is too late to turn a new leaf and to make your actions to count.

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1. Learn how to control yourself

This is the first and most important aspect of financial management. Self-control is very crucial when it comes to finances. A time may come when you will have a prompt to spend on vain things or on things that are not worthwhile maybe to impress someone or for other vague reasons, but it is through the application of self-control that you will be able to take a stand against that urge. If you cannot afford something today, do not allow yourself to be pressured into buying such thing. A friend of mine once said:

If you cannot buy something at least two times over, then you cannot afford that thing

What he simply meant by that is that you should not hang your bag in a position that is higher than your hand can reach. This also means that you should place yourself under self-control in order to protect your finances. You should cultivate the habit of self-control early in life so that it will guide you throughout your life. I have a friend that once told me that he resolved within himself that he will never buy anything on credit and he has formed it as a habit. What his present finances cannot afford, he will not borrow to afford it. That is his own way of controlling his spending. So you too can have your own way of self-control.

2. Do not let your expenditures exceed your financial income

I normally cite example with farmers whenever talks relating to income and expenditure are raised. If a farmer eats all his crops during the harvest season without reserving anyone for planting, when the planting season comes, he will have nothing to plant. And if he does not plant anything, then during harvest, there will be nothing to harvest. In the same way, when your income comes, you are not meant to spend everything but keep a part for investment and of course, for saving. At any point in your life, you should be careful when spending and do not allow your expenses to be more than your income.

To be able to achieve this effectively, you need to make a draft of what to spend, where to spend and how to spend. Get a budget and follow it well. This will help to eliminate impromptu buying and will also save you from entering into financial stress. Imagine if you exceed your present income on unworthy things and the next income takes a while, it will put you into financial stress. At any point, you should know where your finances go and what to spend on. Always learn to focus more of your expenses on your needs before your wants.

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3. Save for the future

If everything that comes into your hand is consumed in the now without making plans for the future, then you are not prepared for the future. It may interest you to know that the little savings you have today might be what will save you in the days of emergency. The truth is that you may not know when emergency will come, of course that is why it is called emergency. So in order to prepare yourself for emergency, you have to save for it. You may not be able to stop emergency situations from coming but you can get yourself prepared to face it. You can even set up an "emergency fund" which you will be saving up in case of eventualities.

You will agree with me that there is a level of peace of mind that comes when you know that you have some savings for emergency situations. As a matter of fact, there are some financial troubles that you can avoid if you have savings for eventualities. So whatever comes into your hand, you should make it a point of duty to put up some savings for the future.

Thanks for reading