As the title suggests, this article is for the young adults and the new graduates who frivolously disburse money and leaves their future behind. In reality, there are a number of youth you want to have a control over their finances and start saving as soon as they can.
Financial priorities of the Americans, whose age is between 18-34 years, do not seem to be different from the older adults. 49% among them want to own their home and 48% want to reduce the debts that too through regular payments and 39% of the youth want to start an emergency fund.
In order to save money, the young adults must start figuring their regular spending. People need to rethink a lot about their spending. When you think of the place where your money is going – like buying lunch, eating out, going to the multiplexes, will make you spend a lot. To break it down you need to calculate in a simple way – like $10 for a one-day lunch, $50 a week and $ 2,600 a year.
That does not mean you are not going have any fun if you are thinking to go on a vacation once a year or blow a few bills on those boozing party-nights, can be easily achieved with the help of budgeting. Budgeting and savings is not going to hurt the bank account.
Keep a Wiggling Room
The main key is to live on less than you earn. You have to keep the wiggle room for one self and so you do not need to spend close above the limit. If you are able to get the next paycheck, then you should save more. You need to save at least three percent to ten percent and spend less.
Learn To Save More
If you can save a few dollars at a time, it is better to do that. As you are able to start the career, you need to pay the student debt and planning a major purchase like a car or the home can make it difficult to save. One of the best tricks is to budget down the savings, before you get accustomed to spending every month.
Prepare the Emergency Funds
According to the rule of thumb, an emergency fund should be three times the monthly expenses are you are unmarried and six times if you are married or if you have children. It is better to open a high interest savings account to earn the extra money through interests.
It is better to organize the debt according to the interest rates and pay off the debt, those with higher interest rates at first. You may also adopt the option of consolidating the debts under one single loan, that too with a lower rate of interests.
Make payments timely, when you can pay more than the minimum payments. If you miss a single payment, it will be hurting your credit score and hence you should avoid all those heavy costs.
Think About Spending Diligently
On an average, you spend $10 on the everyday lunch and $2,600 a year as we calculated above. If you are earning $30,000, a year then you can save up to 9% of the salary, by making the lunch at your home and all you need is to bag it. Saving on this simple expenditure can save a lot of money, which you can contribute, to an RRSP (Registered Retirement Savings Plan) or TFSA (Tax-Free Savings Account).
This is the perfect guide for the young adults who really want to make their savings large and make themselves financially stronger.
Author’s Bio: Samantha Will is a financial analyst for appointment setting call center in the United States that facilitates many small business organizations. She maintains her financial blog where she shares major financial advices to entrepreneurs, companies and individuals to have a stronger financial background.