With easy access to loans and credit cards, many young adults find themselves in debt that they could have easily avoided had they used restraint and common sense. With online shopping, leisure activities, fine dining, travel etc., easily available, it is now wonder that many people spend more than what they earn. In the process they acquire debt that can affect them for years to come with their bad debt management.
Know Where the Leaks Are
It’s quite easy to monitor big purchases as they are not so easy to forget. The big flat screen TV you bought last month or that brand new vehicle you bought from the dealer are prime examples of big purchases. It is the small ones that tend to chip away at your finances very quickly than you would like believe. The Uber drive to work, the morning coffee routine, and the weekend getaway with college friends are small expenses that cost money. By keeping tabs on your leisure activities and lifestyle choices you will know where you need to cut on.
Establish a Small Investment Portfolio
Begin investing early. Do so by allocating a portion of your income or salary to a recurring deposit that provides a good interest rate than just an ordinary bank account. Once you learn that you can commit to this you can branch out to other financial products such as low-risk mutual funds or corporate bonds that give better returns.
Establish a Credit Profile
If ever you are eyeing a house or vehicle you will need to establish a good credit history first. You can develop a good credit history by making timely loan payments such as payments for credit card bills. Once you do so, you will create a positive credit rating that will qualify you for lower interest rates.
Develop a Financial IQ
Allot time to educating yourself about money and how to earn and respect it. It is easy to spend it no doubt but the hard part is to controlling how and where you spend your hard earned dollars so that you do not go from paycheck to paycheck trying to fend off your debts. Read books, check out online resources or talk to a credit counselor to help you understand how to manage whatever debt you already have and rein it in. By increasing your financial know-how you are making yourself less prone to mistakes that cost you more than what you actually have to pay for.