In a world where people use credit cards left and right and rack up debt at every turn, it can be challenging for young people to understand how to correctly manage their money. If you are in your twenties or early thirties and are struggling to understand and deal with your own personal finances, don’t worry! There are a few simple steps that, if followed, can help you to have a bright financial future. Whether you’re currently bogged down with student loan debt, have made dubious mistakes in your past, or have a perfectly clean credit history, it’s important to take action now, while you’re still young.
Recent graduates are one group that has been hit hard by these troubled economic times. They graduate all fresh-faced and bushy-tailed, hopeful that they are on to bigger and better things. Then, more often than not, they are faced with a world that isn’t eager to hire, and the loan bills start pouring in. if this describes your situation, you might be feeling hopeless and like your education was absolutely worthless. However, there is hope. If you can’t get employed right away, contact your lender. Most are willing to postpone repayment of your loans until a later date. Yes, this will cause your loans to accrue interest and be more expensive in the long run, but it can keep you from going into default and facing the many serious consequences that go along with that.
If you are able to land a job, even a low-paying one, work out a payment plan with your lenders. Even though you may be struggling to make ends meet, try your very best to put at least 10% of what you earn into a savings account. It might not be much but, over time, it can add up and help you in your future endeavors. You never know when you are going to need extra cash. However, make sure you don’t use your savings frivolously. Only dip into that account when there are no other options available to you and for emergency situations.
Make sure you keep your savings account with a reputable bank and that, if at all possible, you don’t switch banks. Even though it can be tempting to be lured to another bank with a fancy offer and lots of promises, it’s really in your best interest to stay in one place. This shows your commitment and stability, and can be especially important for those with no credit to their name. If you have a squeaky clean credit history, you can at least show a reliable banking background.Saving is a good practice for anyone, recent graduate or not. It is always a good idea, no matter what your station in life, to have a savings account. Do your very best to not touch the account unless you absolutely can’t help it. In fact, it’s really is in your best interest to simply pretend like the money isn’t there.
Another big issue faced by young people is credit cards and their management. In today’s society, it is so very tempting to “buy now and pay later.” The credit card companies make it seem so simple, but what’s also very simple is falling into insurmountable debt. While you shouldn’t avoid credit cards altogether, you should make every effort to use them as responsibly as possible. Credit cards, when used responsibly and paid on time, are a great way to start building a credit history. However, if you go all wily-nily with them and spend uncontrollably, they can quickly destroy your credit! Above all, just use your common sense and good judgment, and don’t bite into more than you can chew.
Byline: Aaron Gormley understands that personal finance is at the core of stability, whether it be personal stability or romantic, which is why he used to run a blog about finance as it pertains to relationships formed from online chat.
© 2012, Aaron. All rights reserved.