Financial Advice For Young People is a topic that I wished I could have explored a bit earlier in my life, anyways I still don’t regret much. I am writing this to help you get an ideas on how to manage your financial state as a young person.
Have you ever wondered what is the secret of the “Rich people“?, You have probably heard people saying that rich people are evil, they don’t respect the poor. Being rich is through luck, while poor people know the essence of hard work.
Bull sh*t. if you have the same mentality then you can leave right now, this article is not for you. But, If you are still wondering what
“I want to know about money”,
“How money works “
“How to get financially independent”
Then you are welcome. This happened to me a year ago, I was really dumb, I did not know the power of controlling money or the principle that lies behind financial independence. You know, schools and colleges don’t teach you “How to manage your money and truly find your freedom”.
But I will not blame them.
it all really depends on “How hungry you for the knowledge that will make you financially independent”. Here I will share my insights and what I have learned learning from tons of books, watching countless videos, and squandering money.
Consumerism in Young People
Why you buy things that you don’t need?, So, a year ago, I wanted to buy a mobile phone, I really don’t know why. But it looks cool to get you hands-on new stuffs in the market. Right? In the end, I bought that mobile phone and really I regret those steps. you really need to break things down.
Nowadays people are affected by consumerism
Consumerism is a social and economic order that encourages the acquisition of goods and services in ever-increasing amounts. With the industrial revolution, but particularly in the 20th century, mass production led to overproduction — the supply of goods would grow beyond consumer demand, and so manufacturers turned to planned obsolescence and advertising to manipulate consumer spending. ( Explained More Below ).
Consumerism is young people is quite common, as due to social exposure to ostentatious lifestyle which is leading youth to follow a blind path of materialism. Without knowing the actual purpose behind their action, young people are buying things to impress others and elevate their lifestyle.
in other words, television and internet commercials force you to buy things that you don’t need. Commercials force your brain to think that there is something missing in your life and you can only fill that up through buying more and more things. I have been in the same trap.
Solution — Don’t buy things that you don’t need.
If you are still confused about what to buy. Then just for a second imagine that on one of your hands there is a $200 purse that you want to buy and $200 cash on the other.
Now close your eyes and try to make a choice between these two. If you choose $200 cash over the purse then you don’t need to buy that fancy stuff. This is a psychology trick to let your brain understand which one is more important in the present situation.
What’s good about money?
money is good for solving problems.
Money is the medium by which earthly success is measured
Money makes possible the enjoyment of the best the earth affords.
Money is plentiful for those who understand the simple laws which govern its acquisition.
money helps you to solve big problems of this earth, although there is nothing evil about money. People who use money as a tool decides its alteration. Never term money as Evil, it brings down your mindset, as you know to acquire money first you have to develop a mindset which money welcoming.
7 Financial Advice For Young People
1. Solidify your purse
Start with saving your money for a greater purpose, don’t waste money in buying things frequently. For every $10 you earn try to save $1, in other words, your savings should be 1/10th of your income. Use the 7/2/1 income rule in which use 7/10th of your income to save or invest and use the 2/10th of your income for daily expenses, at last, the 1/10th of your monthly income goes for emergencies, you can alter the segmentation accordingly.
2. Control the expenditures
you have probably realized that at the end of every month your expenses exceed your savings. Never confuse the necessary expenses with your desires”. Prepare a budget where you should maintain a separate column for expenses and incomes. Spend on enjoyment and leisure but with a strict budget until you learn “how to grow your income”. Save or invest First then spend.
3.Make your income multiply
This is the third rule for personal finance which is to collect more assets and reduce your liabilities. Use your money to create another source of income, a stream of wealth that will flow constantly.
the middle class will waste their money on useless things that don’t add value to your income at the end of the day.
While rich people allow their money to buy more assets and creates income streams that matches their qualities.
in other words — Money compounds as you keep building your assets.
4. Guard yourself against loss
All losses can be avoided and losses that incur willingly decline your income. Invest your savings only on those assets that you understand and believe in. Don’t play with money by listening to others’ opinions.
Take calculated risks.
don’t take financial advice from people who are not rich, learn from those who are already rich. So-called financial advisor, do what is best for them nit you, so think which one you choose as your financial pillar.
5. Make a profitable investment
Anything that adds up to your income is a profitable investment. Don’t use all of your income on budgets and expenditure, put aside some of your money to tests, and try different investment opportunities.
6. Ensure a future income
Before deciding anything always think in the long term. Building wealth is a long term game, impatience is cursed for those who want to be financially independent. as things are always uncertain, You can also, set aside money for insurance purposes that save you from future misfortune.
7. Increase your ability to earn
Start gaining new skills that have the capability to earn your income. “The more wisdom you know, the more you may earn.”
the man who seeks to learn more of his craft shall be richly rewarded. — The Richest man in babylon
these are the 7 money management skills you should learn and should with everyone who needs to learn personal finance.
Does money bring happiness?
I would refer to my own experience. don’t confuse with money and happiness, money might give you the things that make you happy for a temporary period. It can bring your cars, a mansion, and whatnot. Money does not automatically give you happiness. Instead, money gives you access to many things that can lead to happiness.
happiness is a long term pursuit, be happy even if you haven’t earned your expected income. And always seek improvement.
You decide the rest. comment below out of which 7 personal finance techniques you like the most.
Recommended Reading >> The Psychology of Money Book Review & Summary-