It’s okay if you just started earning and don’t know how to deal with money. Schools don’t teach us how to manage our basic finances. Financial literacy is very important and If you learn it at a young age, it will be easy for you to save money for your major goals in future. The younger you are the more time you have for savings and investments. It’s great because the sooner the better!
If you are looking for debt advisors, you can reach out to Debts Advice. They are the best Debt Advice Experts in London.
In this blog, we will tell you how to smartly handle your finances at a young age.
Watch out for yourself while spending
Shopping websites are delusional, you may find a number of products appealing, but you don’t need them. It’s so easy to click on something and it reaches your home, right? But also empties your pockets. Ask yourself twice, do you need that new pair of shoes or the latest gadget? You are earning yourself now, so calculate everything and note down how much you spend over a month. Being honest with yourself will always help you in managing your finances.
Beware of distractions
There are several financial advisors in the market these days. They can distract you and make you fall into their traps. Their misjudgments can be harmful to your financial stability. Remember that if you don’t learn to handle your money, someone can misguide you and take a profit from it.
Save for a bad day
Everyone knows that life is unpredictable but still avoids preparing for an emergency. Saving money can help you get out of such conditions. It is not only helpful for emergencies but also for our goals like a trip to the same tourist place, higher studies, first car etc. Save at least 10-20 % of your monthly income. You can use this amount whenever you need it.
Learn Debt Management
There are mainly two types of debts which you can go through.
Necessary and unnecessary debt. If you have saved for higher education and there is inflation in tuition fees, you might need an education loan. This comes under necessary debt. On the other hand, buying gadgets like a smartwatch, or a smartphone on EMI at high-interest rates comes under unnecessary debts. EMI looks very convenient but it can lead you to debt later on. Also only get a credit card when you know how to handle one. Pay your bills on time and stay out of debt.
Know the Taxes
Learn how taxes work in your country and how it affects your overall income before you get your first salary. Knowing about income tax is very important whether you are working as a regular employee or a freelancer. Calculate whether your income will give you sufficient money after taxes.
How about Healthy Investments?
People usually learn about investments when they are around their 40s, but it’s a plus point if you start investing at a young age. First of all, read and learn about it. Investing contains risk, so only do it if you are brave enough. You can invest in gold, fixed deposits etc.
Use credit cards safely
If you don’t know self-control then credit cards could be a little harmful to your financial status. Debit cards deduct money from your existing amount, but credit cards have interests in them. If you don’t know how to handle money and you are an impulse shopper then credit cards can get you in high debt. So be wise and use credit cards safely or avoid using them.
If you are already in debt and looking for debt management then you can contact Debts Advice. They will give you the best Debt Management Plan in London.