Too many students are thrown into college with no understanding of how the real world works and are left to figure it out on their own. While the sink or swim method may be a lesson in tough love worth learning, it doesn’t exactly help young adults establish healthy financial habits. And once bad habits are formed it’s easy for them to follow you the rest of your life. So before you start down a bad, winding road, try making these few changes and sticking with them until they’re nothing but second nature.
- Insure Yourself. Insurance is one of those things that you don’t need until it’s too late to get it. Emergencies happen and without a safety net to catch you when it happens, you can find yourself in a deep hole that’s nearly impossible to climb out of. Because you’re young, you may feel invincible but it never hurts to err on the side of caution. Insure yourself while your rates are decent and prevent any calamities you can. If money is tight and the emergency circumstances arise, consider a short term loan company. They’re a useful source emergency funds. It’s not something you want to rely on for an extended period of time but because it allows you to get funds quickly and at any time of the day this loan type does have it’s advantages in specific scenarios. While insurance will protect you from the beginning, it is nice to know there are emergency options if something happens.
- Learn How to Budget the Right Way. Your twenties are a time of instant gratification. If something doesn’t serve to improve your life right away, it doesn’t seem worth it. But that’s exactly the reason you have to start building good money management skills as soon as possible so you’re less likely to form bad habits in the future. Learn how to create a budget for yourself and stick to it. Technology has made it incredibly easy to keep track of your money these days; check out this list of online budget helpers to help you create a plan that’s reasonable and attainable.
- Consider Your Credit. When you’re younger, credit seems like something you don’t have to worry about until you’re ready to make a big purchase, say a house or a car. But the truth is, every payment you make today will affect your ability to buy these things in the future, regardless of how much your future self makes. By being irresponsible with your money during your twenties, you’re making it much more difficult when you go to make those important purchases, at least at a fair interest rate. Do yourself a favor and don’t cause problems for yourself down the road by thinking you can make it better later.
If you start off on the right foot, you’ll have no problem getting ahead when those big ticket items start to loom. With a healthy financial history, you’ll be ahead of the game instead of trying to play catch up when things get tough. Spend responsibly and the world will be wide open to you.