Helpful Budgeting Tips For Young Adults

For most young adults, when the time comes to face the facts with finances they are not prepared. The truth is that budgeting is not a no-brainer, but it isn’t necessarily hard either. Unfortunately, personal finance courses are not yet a required course in high school or college, but they should be. Instead, many Americans are left to learn through a bumpy trial and error. This too, is not necessary. If you are willing to do a little bit of reading in order to get all the facts straight, you can transition into financial independence easily and without fear. If you don’t learn how to manage your money now you may be faced with crippling financial crises in the future.

Learn self control. It is far better to save up for a purchase than to use a credit card and get it right away. Do not make a habit out of using your credit card; if you already have this habit, it is time to break it. It is best to only use your credit card if you can pay off the balance at the end of the month. In some cases it is ok if you can manage to pay off the balance within three months, but no more than that. If it takes more than three months to pay off, you can’t afford it so you shouldn’t buy it. Credit car interest will stack up and you will end up paying far more than you originally intended.

Take control of your financial future. Learning to manage and take care of your own finances is crucial. If you don’t other people will and they may do so poorly. Take charge of the situation by reading books and talking with a knowledgeable friend or family member to get some advice. You need to understand how money works if you are going to make it work for you.

Know how much money you have in regards to how much money you need. The most important component of a healthy budget is making sure that your expenses do not exceed your income. Try to keep your monthly necessities as low as possible in order to save money. It can be helpful to get a notebook or make an excel sheet in order to keep track. There is no shame in being responsible.

Know what you spend your money on. For many people a lot of money gets spent that is unaccounted for. While you may still only be shopping for items within your “needs” it is important to keep track. Again, having a small notebook to jot down all your purchases as they occur, along with the amount is a great idea. This way at the end of the month you can add them up and see where there is room for change.

Use automatic bill pay. Many young adults are facing real bills for the first time in their lives. It can be difficult to keep track of when different bills are due on their different pay dates. Instead of risking forgetfulness, getting behind on important bills and accruing late fees, sign up for online bill pay. Most every online banking system has an option to set this up. Take the little bit of time it takes to set up online bill pay and have all the major ones automatically withdrawn each month. This takes a huge weight off your shoulders and all you need to worry about is having enough money in your account.

Start a savings account. Savings are always a good idea to have. Whether they are for something specific, or just because, you should have them. Ideally you should calculate a specified amount into your monthly expenses that will automatically be transferred into a savings account. Just make it happen so that you can get into the habit of saving now.

Get health insurance. It is important that you have health insurance in case of an accident. Even the most simple trips to the hospital can wind up costing thousands of dollars. There are numerous individual health plans out there that are affordable; you just need to take the time to shop around. Accidents do happen and it is far better to be prepared with adequate coverage than risk going into debt.

Guard your wealth. Getting renters insurance if you are renting a house or apartment is a great idea. This will protect your belongings from things like burglary or fire. If this seems like a tricky expense to manage, most insurance companies offer discounts when you combine policies. By putting your health, renters and car insurance into one policy you could wind up saving some money.

Each of these things will keep you on top of your personal finances. While this may initially seem like a lot, it is really quite simple and will keep you out of difficult financial situations. Work to build these habits now so that you can live a financially sound life free of debilitating money worries.

–
About the author: Jenni Sunde is a freelance fashion writer and pop culture junkie. Jenni specializes in all things lifestyle-related. From home and design to health and beauty. With her love of art and all things beautiful, she delights in sharing her sense of style from her life to your computer monitor. Her title pegs her as an editor at a website that specializes in providing people with car insurance quotes, but her passion leads her into writing with a little more substance and a lot more heart.