Personal monetary management can be challenging, especially when you are beginning your career and circumnavigating your independence. However, would you rather wait until you are over 40 years old to realize that you need a good financial strategy? Or would you do it as early as now, when you are young, energetic with fewer responsibilities, and with enough time to grow? Whether you are a Gen Z or Millennial, comprehending how to manage your finances early can establish a basis for monetary independence in the future. You do not need a complex strategy that makes you overwhelmed and tired, but a simple plan, that begins by conscious budgeting for your money to ensure saving, and investing for future monetary freedom.
Steps to Financial Management among Youths
Budgeting
It might sound boring, like why should you budget with the little money you got? There are many important issues like partying, going to new places, and buying new dresses. The list is endless, but I can assure you without budgeting, you are hopeless. Budgeting is crucial in effective money management. The 50/30/20 plan, where 50 percent of the money handles necessities like groceries, bills, and rent, 30 percent goes to wants like traveling, dining out, and entertainment, and 20 percent goes to debt payment and savings can help in effective financial planning. Using a budgeting app to help you stay on your proactive budgeting plan can help in accountability and consistent money management.
Savings
Youths always seem to have very little to save, but those small savings can add up to something significant with time. Setting aside at least 15% -20% of your revenue into savings can be very helpful in the future. Savings of about 6-7 months can be used for covering unpredictable life emergencies. Researching the best savings accounts that provide better interest percentages than traditional accounts can help in proactive saving.
Investing
Savings are crucial, but investments are more proactive in creating wealth with time. The earlier you begin the better, with the many advertisements on cryptocurrency, you could research cryptocurrency its advantages, risks, and disadvantages and identify the right measures to invest in such markets. The stock market is another good investment approach that is beginner-friendly and allows effective investment for all regardless of their financial amount. Business investments are also good measures, like investing in the beauty business where you could sell cosmetic products or offer beauty services. You could also sell clothes, shoes, and bags for men and females. Adopting a good investment plan can help you grow wealth.
Side Hustles
In today’s fast-growing economy, people need more than one financial source to survive. Supporting your permanent job with additional side hustles like online jobs like affiliate marketing, and selling handmade products like scrunches and handbags can help increase your income.
Financial literacy
Understanding finances, and how to manage your debts and budget can help make sound decisions regarding your income. Financial knowledge attained through blogs, and listening to financial expert advice can help know how to pay your debts, save, invest, and have more money for fun.
Generally, personal monetary management among Gen Z and Millennials is challenging. However, adopting the right financial management plans can help them become good monetary managers for their future financial freedom.