Many young adults in their 20-30s make money mistakes due to lack of complete knowledge, resulting in serious blunders further.
It is important to understand their finances, and keep a proper tab on it.
Check out these 5 common money management mistakes freshers wish they realized in their Early years.
- Splurging to relieve from stress:
Many freshers or recently employed people who experience the independence of earning their own money feel spending on them and have a “Live life king size” attitude. It is also an age where a person goes into an emotional trauma and has a habit of spending on themselves too much money to feel good. They mix their emotions with money which is dangerous.
At times when they are swayed in emotions, they do not understand how much they are spending and they end up in shopping those things as well, which they seldom use.
Ultimately when they are broke or short of cash they realize this and feel guilty.
- Not having emergency savings:
When recent freshers or graduates start earning, they hardly think of any savings or emergencies. Their needs are limited to only food bills, house rents, clubs parties, etc. That’s it.
However planning for the future and cushioning yourself from the uncertainties’ can help you keep in a secured position, down the line.
- No Investments:
There is no specific age of start investing but it is beneficial for you if you start investing your money at an early age, as it may ultimately be advantageous to you.
It is important to make investments with proper knowledge or under the guidance of an expert.
Because making a wrong investment or it giving low returns will be a waste of money and nothing else!
You should be careful enough and make prudent decisions regarding this.
- No long term financial goals:
“Your actions today, will speak for you tomorrow.” Most people in their 20-30s don’t have long term financial goals, like starting their own company or buying a car, etc. Identify your goals/dreams right before the time passes away and start saving towards it from now onwards.
- Running for Money:
Many people take job with a good wage rate, turning down positions which actually have a huge potential but are low on income.
It is important to understand that your income level depends on your skill-set it will rise gradually sometime in future surely, but once the time passes away the skills cannot be acquired again later.
“Take time out to acquire skills in present and they will feed you in future.”