If you are a teen, you are at the most critical point of your life. It is the point where you either make it or break it. Almost all life aspects are determined at this age. You start doing drugs at this age; you get destroyed by them in the foreseeable future. You begin a responsible living; you prosper at it in the future. Meanwhile, responsibility can be put in many ways.
You could be socially responsible, financially, family, education, economically, etc. in this article, we shall look at how you could be financially accountable to guarantee a brighter financial future, implying that you will not have untenable issues with your finances in your future life. It all comes back to teenage decisions you make.
They are the foundation of whatever you would be considering to build in the future. It all starts with financial prowess, for everyone wants to be wealthy, or at least be comfortable. You should always aim at getting low-interest loan rates. Simply check out Fortune Credit for affordable loan rates. Now, let’s talk about financial tips for your teen:
- Start saving culture early on
Culture is kind of a habit. It is a predetermined way of life where you follow certain norms and beliefs. If you were to start saving early enough, then you would make this habit a culture. At a young age as yours, you don’t really have many responsibilities weighing down on your shoulders.
Therefore, you can afford to put away something from your salary. As time progresses and responsibilities come raining down on you, it becomes challenging to save. But if you started at a young age, then you are used to this, and you would do it without even thinking about it. Hence it becomes an automatic response, making it easy to adjust to any economic condition that comes your way. Of course, you are not earning too much money at a young teenage age. But starting from the small you get makes you responsible enough to put away a portion of the larger you would get in the future.
- Time is a powerful tool
You may not understand it, but time is a crucial aspect of saving. For instance, if you had started saving at a young age and you deposited say $200, and this lasts for say 30 years in your account earning an interest of say 5% then at the end of that period you will have about $900. And, if you were making the same deposits monthly, then you are guaranteed a cool $350,000. Since you are likely to deposit more than $200 as time goes by, say you now deposit $1000, then you will easily be in seven figures by the time you are an adult. You also have to remember that the older you grow, the tighter it becomes to save up.
So, it is advisable to start saving early. Furthermore, you don’t really have to put away your savings in the bank account. In fact, the best and most convenient way of saving is by investing in bonds and stocks of companies. These securities would give a much substantial return compared to when you put your money to lie round in your bank account. Depending on the market set up, you are likely to double your investment in no time and become one of the corporate bigwigs in your early adulthood stages. But again, you might lose your investment. So, you have to get a financial advisor and make sure you invest in areas that are promising for investment is just but a risk-taking.
- Keep an eye on your expenditure
It doesn’t matter how much you earn doing your part-time or your full-time establishment. If your income is equal to your expenditure, then you need a reset on this particular subject. If this is happening to you, then the best explanation is that you don’t budget for your spending. Your total expenditure should never be equal or more than your income.
Now that you are likely to be paid in cash mostly, since your employment may not be permanent, or the gigs you do are not that lasting, it is hard to track your spending with this mode of payment – hence the importance of budgeting. You can also help the situation by opening a bank account to deposit the cash once you get paid, too, you can get a debit card and use it for your purchases. The bank can help you in separating the money for spending by putting a cap on the card expenditure so that you don’t end up using every penny in-deposit.
- Seek additional knowledge
Generally, you are never knowledgeable enough. Personal finance is a broad subject that you will probably not exhaust within your school syllabus system; that is why you should seek some more education from elsewhere. In this digital age, you can easily find these lessons online, seeking advice from your parents or choose your lender to provide enlightenment. You can, however, combine all three, and maximize on the knowledge they have to offer. You can as well learn from your friend or your mentor. Financial management is a skill and not a talent, so do not give up on trying perfecting yourself at this.
- Built a credit history
You may be thinking, maybe after paying up your student loans, and then you will have a good relationship with the lenders. Well, at some point, you would have had a long history with them, but again the history has to matter. For instance, you need to have taken multiple loans and repaid them at the right time. This shows you are responsible for you honor your financial obligations. The great healthy credit you build with the banks and credit unions would help you when you finally want to take out a mortgage for a house. Also, with good credit, you can get low-interest loan rates with ease.
The Bottom Line
By the end of the day, the best tip for financial freedom in the future lies with the decisions you make. If you are smart enough, there is no way you will prefer spending than saving or investing for the future. Still, you would know how to control your urge to not being left out by your peers. Let your pocket change speak for you and not your friends.