When you are young, balancing between earning, spending and saving money is always a difficult problem. Please understand that you can’t rush if you want to get rich. You have to have a medium-term spending plan with clear priorities, avoid binge-spending, especially buying unnecessary items.
1. You cannot get rich in no time
Everyone wants to become rich quickly. But if you don’t have a billionaire father, remember that the spell here is working hard. Patience is a virtue, and you will be rewarded if you have it. The fast road to get rich always leads to failure.
2. Learn how to use credit cards
Credit cards can be a great way to learn how to save money while many consider it as a magic card to help them spend money without thinking. And when the maturity date comes, they find it hard to arrange money to settle the debt. Moreover, smart spending also helps build your credit score in the eyes of banks, making it easier to borrow or mortgage in the future.
3. Keep track of spending habits
Young people tend to spend a lot of money on useless things such as beer and wine. However, it is important to know that when you get older, keeping track of your spending is crucial. So, learn how to save money and think about what you need, not what you want.
4. Share costs with your roommates
Obviously, living alone always has advantages such as privacy and comfort. But if your finances are limited, think about living with roommates. As a result, the rents and even money for meals will be significantly reduced. Besides, you will also feel less lonely when having someone to talk to every day.
5. Be aware of fees and charges
If you use an ATM card, you will enjoy the convenience of being able to withdraw money wherever you want. But don’t forget to pay fees. Similarly, fees of credit cards and annual fees may be low with each transaction, but if you total them, you might consider keeping money by yourself and learning how to save money instead of having banks kept the money for you.
6. Don’t rush to buy a new car
When starting to have a good income, many people will think about changing their vehicle. This is understandable because expensive cars are too attractive to resist. However, think carefully before you make a decision. Fees such as registration, maintenance, gasoline and insurance will be issues you need to consider first when buying a car.
7. Learn to prioritize expenses
Many kinds of expenses will appear each month such as credit, electricity, water, Internet or instalment, etc. So, learn how to save money by prioritizing and having detailed plans to pay your expenses which immediately affect your life and your credit score in the future.
8. Save money for emergency situations
Having your car broken, being fired or suddenly getting sick for a long time are always things you don’t know when they will happen. Therefore, have your own fund for such situations – from 3 to 6 months of income, for example. Also, make sure you don’t use money from this fund – because it’s something you rely on to take care of yourself during “dark days”.
9. Set up medium-term goals
Ask serious questions about your plan in the next 5 -10 years and set goals that need to be completed. Besides getting married to your high school girlfriend, travelling to Europe or learning to save a decent amount of money is also should be taken into consideration. Don’t hesitate to spend a certain percentage of your monthly income, don’t be afraid to invest in stocks or bonds. They will bring better income than regular savings and also help you perceive the philosophy that you are not able to get rich quickly.
10. Save money for retirement
Next, learn to save money as early as possible so that you can get a decent amount of money when you retire. This is a long-term plan that is often overlooked by young people. However, keep in mind that it is never too early to start saving for retirement. Choose suitable options for saving method, including using insurance funds because they have high-interest rates and sometimes still allow you to withdraw money early for emergency situations.