While it’s safe to say that learning doesn’t ever really end, there are also some things you wish were taught to you back when you were younger. This is especially so if you’re talking about finances. Because it’s always better to avoid financial mistakes from the get go — they usually have repercussions that hold us back in the long run.
There are benefits to having a good understanding of your personal finances from the start. With that, here are money lessons you wish you knew when you were younger.
The perfect time to start saving is NOW
The mindset that saving for retirement is something only wealthy, older people do is a myth. Saving up as soon as you are able is always the best personal advice anyone can give you from the start. Remember, there is no better time to start saving for your retirement than when you’re still in your youth. This is because you have more time to grow your wealth — regardless of how small your earnings are still.
The longer you wait to start saving, the more time isn’t on your side. This means you need a bigger amount of money to set aside in order to end up with a comfortable amount in the long run.
Always go for quality over quantity
Investments aren’t just stocks, bonds, and real estate. Your personal belongings are your investments as well. While you’re still young, make sure the things you purchase will last long. Take the time to research on items that are built to last to eventually spend less in the long run.
This may seem easy, but choosing quality over quantity takes a practiced eye, a lot of patience, and a pretty huge amount of discipline as well.
Setting a budget is important
It’s easy to indulge yourself especially if you’re still young and reaping the benefits off your first few pay checks. But budgeting is an important part of mastering personal finance. Making sure you’re still living within your means takes a lot of practice as well. So the earlier you start, the better.
And because you have a budget, this means you can still give yourself allowances to have fun and spoil yourself once in a while.
Have an emergency fund
If there’s one thing our current situation has taught us, it’s that it’s important to have an emergency fund. We all wish someone told us at a young age to set aside money in case of emergencies. That way, we would have to resort to debt to pay for medical, home renovation, car problem, and even personal emergency bills.
The goal is to have saved three to six month’s worth of living expenses to ensure you’re covered for whatever lies ahead.
Set clear financial goals
Even if you still know very little about managing finances, you can start setting financial goals. They can be as simple as owning a home in 10 years time, getting out of debt, building an emergency fund in two years. Just make sure to be realistic when setting these goals.
Always remember, though, that it takes more than money to be financially secure. Look back at your life and see how far you’ve gone. And while you’re at it, slowly tick off these 5 tips and you’re on your way to learning better money skills.