In theory, young adulthood is one of the best times of a person’s life. At this stage, people usually don’t yet have kids, so they have no one else but themselves to take care of. They also have no financial worries to think about other than their student loan.
But, in real life, young adulthood isn’t always a great time. Sure, people have more money during this compared to when they were students since they’re now working and earning a salary. The problem is that young adults are often plagued with bad financial habits that make life more difficult and even lead to their downfall. If you’re one of these young folks, here are some of the habits that might be killing your financial future:
Spending all your money on unnecessary things
It can be really tempting to buy that gourmet latte, that new smartphone, that designer bag. But do you really need it? If you don’t, you’re probably wasting your hard-earned money on unnecessary things.
This doesn’t mean you should live like a monk, though. The keyword here is moderation: if getting that daily latte leaves your money too tight, why not cut back and treat yourself to it once a month? You can brew your own coffee at home and bring it to work to still get your caffeine kick every day.
Failing to save enough money (or at all)
Overspending on non-necessities (as mentioned above) can leave you with less money for your savings. So, when you start cutting back on unnecessary expenses, you’ll have more money to put into your savings account. And make sure you do save it, not spend it anywhere else — having substantial emergency funds can mean the difference between sailing unharmed through financial problems and getting knee-deep in debt.
Neglecting your debt
Speaking of debt, it’s time to pay closer attention to it. Calculate all your debts (including student loans, payday loans, and credit card balances) and figure out how you can pay them within the shortest possible time. This can mean avoiding unnecessary purchases and paring down to the barest necessities so you can use all your extra money to repay your creditors. This can also mean getting a second job and using your earnings from it to clear your debts.
Relying solely on your job
This isn’t really a huge crime, particularly if your job lets you earn a large salary. But what you have to realize is that jobs don’t usually last forever; you’ll have to be incredibly lucky to be employed in the same company from your 20s up until your retirement. Because of this, it’s important to have another way to make money and earn additional income, such as a side business. This way, you’ll have the financial capacity to support yourself even if you lose your day job. You’ll also have extra earnings that you can use to pay your debts or increase your savings.
Don’t worry if you’re not a natural entrepreneur; there are many experienced business owners who are willing and eager to provide mentorship to newbies like you. With their help, you’ll learn how to manage your business and eventually make it successful.