Whether you earn an income or not, it’s important to learn the basics of money management such as budgeting and savings, which are essential to managing money irrespective of the size of your income.
In a month, I will be turning the dirty thirty phase. While there are a lot of lesson my 20s presented to me, financial lessons were, by far, ones I enjoyed applying to my reality. With this said, here are the top 5 lessons to master before turning 30:
Make your money work for you
Always budget to save. While a budget can help you keep an eye on how much you spend from month to month, it but must also be used to facilitate savings. As you consistently depend on a budget to manage your finances, you get a better handle on your money which makes it easy to identify any wastage or expenditure on non-essentials.
Have financial goals and stick to them
Most young people believe having financial goals is something that starts once one has a secure permanent job and a large set of responsibilities. On the contrary, setting financial goals must begin early on in life and practiced throughout. Whether you are a student or just holding down a temporary job, know what you want to achieve with the little money you have. This is the time to start practicing basic money management skills such as savings, budgeting and living within your means.
Don’t bling with debt
At some stage in your life you will need debt, especially for big ticket items such as a house or a car, and this may require you to approach a lender for financing. Avoid taking debt just to match the lifestyles of friends or colleagues. For example, instead of a buying a big fancy vehicle as your first rather opt for a smaller and simpler car, this may leave you some room to save for a deposit towards your house. Just because a friend or colleague drives the latest car model and wears the latest clothing brands, it does not mean you must go the same route. Know what you want to achieve with your finances and never let your plans get derailed by other people’s lifestyles.
Protect your savings
Savings goals must be linked to achievable milestones, know what you are saving for and commit to it. For example, if you have set aside savings for emergencies be sure to use the money only when you have an emergency. This is about remaining disciplined to your savings goals to ensure you do not deviate from your goals.
Always review your financial position
You may have made the right financial decisions in life such as having a good base of savings, manageable debt and controlled spending patterns. However, this is does not mean you don’t, from time to time, have to review your finances because as external events such interest rate cuts may impact your savings for example.
What financial lessons have you mastered? Please share in the comments below