Manage your Finance at an early stage in Life

A young adult is someone who has probably just walked out of college and has taken his/her first step into the real world. When a person like this gets their first salary, they are usually confused about the correct way of spending it and henceforth dealing with the following salaries. It is extremely important to be aware of the correct method of finance management in order to be successful in life and also to have a secure future. Thus, here are a few point solutions to adequate management of money in a youth’s life:

Step 1: Learn Self Control:- Unless you are aware of the skill to control one’s emotions and desire for spending money on unwanted things, it is extremely difficult to learn the right technique of financial management. It is necessary to learn to prioritize your needs and wants to be able to control the unwanted expenditure. It is easy to purchase goods on credit but do you really want to pay interest on a pair of jeans or a box of cereal? Doesn’t it seem more sensible to purchase these things with cash? If you want to keep your credit cards for the convenience factor or the rewards they offer, make sure to always pay your balance in full when the bill arrives, and don’t carry more cards than you can keep track of.

Step 2: Take Control of Your Own Financial Future:- Understanding how money works is the first step toward making your money work for you. If you have the ability and the brains to earn money then why to leave the burden of managing that money on someone else’s shoulder! It is always nice to take advice from our elders but it does not make sense leaving your financial decisions on them because after a point of time everyone needs to learn. It is even more senseless to leave these significant decisions on any commercial firm because they cannot understand the importance of things in your life. Aide is always welcome but not the final decision. Thus, learn to take charge of your own life.

Step 3: Know Where Your Money Goes:- Spending money like a blind and careless person after having gained so much education all your life is foolish. It is extremely essential to keep a check on where your money is going and the best way to do that is through budgeting. Once you do this, you’ll slowly start to make changes in your daily expenditure which will have a huge impact on your future life as a whole.

Step 4: Start an Emergency Fund:- “Pay yourself first”, a mantra that no individual must ever forget. Emergency is a situation that gives no invitations before occurring and thus unless you have saved up something for such situations, you can never be sure. Thus no matter how much you owe in student loans or credit card debt and no matter how low your salary may seem, it’s wise to find some amount – any amount – of money in your budget to save in an emergency fund every month.
This does not mean that you stock this money under your mattress; instead put it in a high-interest online savings account, a certificate of deposit or a money market account. Otherwise, inflation will erode the value of your savings.

Step 5: Get a Grip on Taxes:- Even though income taxes seem very complicated it’s important to understand how they work even before you get your first paycheck. When a company offers you a starting salary, you need to know how to calculate whether that salary will give you enough money after taxes to meet your financial goals and obligations. Fortunately, there are plenty of online calculators that have taken the dirty work out of determining your own payroll taxes, such as Paycheck City. These calculators will show you your gross pay, how much goes to taxes and how much you’ll be left with, which is also known as net, or take-home pay.

Step 6: Guard Your Health:- Insuring your health is as important as listing down your important expenditure and thus you must start paying your monthly health insurance premiums right from the beginning to safeguard yourself from paying a thousand rupees for a small thing like a broken bone or even a serious injury in an emergency situation, where you could be low on cash.

If you can successfully follow the above steps, there is no doubt that you will never have financial problems in your life. Thus, manage your money and stay happy in life.

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About Shreya Arora

Media Trainee at Symbiosis Institute of Media and Communication, final year. Aspiring to be a Journalist.

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