5 money managing tips every young adult must know!

How I wish financial management was taught in schools. Throughout our school and college lives, the focus is always on obtaining a degree and ultimately making money.

The “get rich” game comprises of two fundamental things- earning money and managing money. It is only much later in life, people start paying attention to the managing money bit. Obviously, not a good game plan. With unlimited youthful energy and capacity to earn more, students definitely need to learn about handling money matters early in life..

Since, we have no such subject, we decided to put together this article, especially for young people. Read on to know more.

#1 The budgeting bug!
Catching this bug early in life has amazing benefits. Chalking out a periodical budget and sticking to it is a sure shot way to manage your money and stay out of credit troubles and it is no rocket science. All it requires is an excel sheet, logic and discipline. Having your expenses laid out, planning and accounting for them will have half the troubles sorted there itself. As students, you must start with preparing a monthly budget and allotting pocket money under various headers.


#2 The card rules
Credit cards are great since they enable you to make an expense without paying for it at that moment. However, what nobody explains to young card holders is- how messy the whole credit card thing can get if you are unable to make a payment timely. You need to remember that credit card is borrowed money with a notorious rate of interest. Missing on credit card payments will not only cost you more but also create a negative impact on your credit history. Play by the rules when dealing with cards for maximum benefits.

#3 Create an emergency fund pot
It hardly helps if you start digging the well when thirsty. Instead, plan and prepare for the future. Set aside a fixed amount every month for an emergency fund. The rule for this fund is-Save and forget. Only in case of an emergency, dip into this fund. Very soon you will see the benefits of having this approach and start other funds of your own like home saving fund, vacation fund, retirement fund, etc.

# 4 Track your money
Don’t let the monthly dates decide how much money you have in your wallet! Often, people feel rich for a couple of days after salary day and broke towards the end of the month. Does this happen with you too? Also, people who exhibit this spending pattern will be unable to tell you the reason behind this behavior. Well, it is because they do not know where their money goes. Expensive coffees on the way to work, the things you don’t need but were bought because they were on sale, fancy dining, etc account to large chunks of money that go unnoticed. Knowing where your money is going will help you rectify the situation and stop that broke feeling from hitting you every month.

#5 Basic hygiene- pay your taxes and save
Sounds so simple and yet we have so many people going wrong in these areas. First let’s focus on taxes. Speak to a professional and learn about which taxes are applicable to you and how much you need to pay. Now that you know about it, start planning. When it comes to saving, find out how much you can spare every month into the saving pool post all the expenses. Make saving a habit. To keep yourself motivated, crystallize your goals and save for them. That feeling of accomplishment when you save and achieve them is unbeatable!

With the right attitude towards money, a disciplined approach and willingness to learn, you can pretty much handle your own money like a pro.

(Rajiv Raj is the Director and Co-Founder of www.creditvidya.com)

(Image: Thinkstock)