Becoming an adult can also be associated with a number financial ‘firsts’ – for example, you may want to save up for your first car, or your first vacation. Or perhaps you have longer term goals in mind, like a house deposit or to start a family. At the same time, you may be paying rent, utility and other bills for the first time.
Learning to set specific financial goals can give you a clear sense of purpose, as well as a destination to head towards. It can be helpful to think in terms of short, medium and long-term goals. For example:
When you’re young, and you have lots of competing priorities, remaining focused on your savings goals can be hard. Here are three things you can try:
You may have heard friends or family members say that the key to managing money well is to ‘live within your means’, by making sure that your monthly costs and expenses are less than your income. If you can live within your means, then you should be able to stay out of debt and save for your future.
A good starting point is to learn to budget effectively. Creating a budget will help you to record your income and expenses, and monitor your spending, providing the peace of mind that results from taking control of your finances. There are plenty of mobile apps that can help you get in the habit of creating a budget and sticking to it.
If you need some help to put a budget together, you may find our article on creating a budget helpful. It shows you how to create a budget, identify ways to reduce spending and work out how much you can afford to save.
Most people borrow money at some point in their lives, whether it’s to buy a car, pay for a holiday, fund their education, or to buy a home. Managing your debts can seem challenging at times, but it is often easier if you have a plan for how you’ll repay them. Before you take on debt make sure you do the following:
Review the contract in its entirety. Be aware of the terms and limitations of your contract. If you don’t understand something, ask.
Make a plan to pay off the debt. Before you take on debt, make a plan to repay it. This will help you to stay on track and avoid any consequences of a missed payment.
Track it. As you take on debts in the form of loans, credit cards or bills, make sure you review your repayment progress regularly. Keep track of your credit score or rating, and monitor it for any suspicious activity. Report anything you don’t recognize right away.
Getting into the habit of saving money while you’re young is important, but it can seem difficult when you are managing debt repayments at the same time.
Consider making it a priority to repay high interest debt first, before putting aside savings. If possible, you should try and build up savings in addition to making those payments.
You may find this article useful: Save? Or pay off debt?