Money tips for young adults

Having a proper financial plan early in life is a major step towards financial freedom.

It is uncommon to see a 25-year-old saving to build a house. Neither is it common to see one saving for retirement. According to experts, what is common is young adults thinking of what car they will buy and what time they will get married, etc. Experts say many young adults erroneously believe that certain things such as building a house are meant for the elderly. Consequently, even when presented with a great opportunity to own a home, they let it pass believing there is still enough time for that.

This approach has cost many young people financial freedom as they found out too late that some opportunities are meant to be seized, regardless of when they come up.

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Apart from the basic tips on learning to budget, save and invest, the following money tips can help young adults better to handle their finances by keeping certain things in focus at all times.

Have a clear goal

Experts say in order to avoid wasting funds and to properly utilise money, it is important for young people to set a goals for themselves and find a purpose for their lives. To do this, there is the need for them to determine their talent and understand their capabilities as well as what they have the most pleasure doing. Apart from aiding them to understand what they want to do with their lives, it helps them to determine the best way to go about achieving that.

Self-control is important

According to financial experts, many young people believe that the key to financial freedom is the ability to earn a lot of money. They, however, stress that the reality is that it takes more than that. This, they say, is because for some people, the more they earn, the more their financial problems, while some others find a way to be financially stable even though they earn a little.

According to them, whatever is an individual’s earning, with self-control, the person can achieve a lot with it. To have self-control, they say an individual needs to learn to delay gratification. For example, a promotion does not have to be accompanied by a party; neither does it have to mean paying more rent for a duplex. If the additional earnings and funds for ‘the party’ are invested, experts are of the view that the future can be filled with parties and houses later with little or no risk of financial distress.

In essence, young adults must avoid buying items or spending money just because they can orthey feel they should do so. That can be achieved with proper budgeting and a good saving plan.

Keep the future in view, always

For some young people, it takes a while before their parents or guardians allow them to be fully responsible for their needs. It is not surprising to find young adults living with their parents for up to five years after they start working. Several of such people are not required to pay house rents or feed themselves, as their parents take care of all that.

Experts say such a period presents the individual with a huge opportunity to take major steps towards financial freedom. By keeping the future in view and realising that they would eventually have to secure their own accommodation, they could start saving towards owning their own homes or investing in a long-term instrument with the goal of financing a business, among other things.

If the individual were to rent a house at N150,000 per annum. In five years, he or she would have spent N750,000. That is just a moderate estimate for rent. When the estimates for feeding and utility bills are added, the amount would shoot beyond N1m. As little as that amount may appear to be, it can be used to finance projects that can help to secure the future financially.

Protect your health

From arguing over who can stare at the sun for a longer period as a child to ignoring a doctor’s directive, people tend to take a lot of health risks in their younger days. The implications of these actions are often not felt until much later in life and they could create serious financial troubles for an individual. Experts say it is important for young people to take their health seriously and ensure that they are prepared for a medical emergency as the cost of a minor medical treatment can run into thousands of naira, while the cost of surgeries could run into millions of naira. The reality is that many health problems can be avoided; exercising regularly and eating balanced meals and drinking a lot of water can go a long way in keeping an individual healthy. And once you stay healthy, you end up saving a fortune.

Take self-development seriously

The skills required to stay employable in the world today are ever-changing. According to experts, whether a young adult works for an organisation or runs his own firm, it is important for him to continually seek personal development. This, they say, is because an investment in self-development is sure to pay off. In today’s global world, it is difficult for a young adult to be a huge success without the ability to use certain gadgets and the social networks. Considering that most elderly people need to get training to adapt to the new world, young individuals cannot afford to ignore changes in educational or skill requirements. Neither can they afford to stop striving to function effectively at all times.

Keep records

This is one thing experts say young adults should strive to do at all costs. They stress that it is important to keep as much records as possible; from having a form of diary to keeping records of expenses, agreements or business deals and tax payments. When it comes to running a business, keeping up-to-date records plays a huge role in the ability to raise additional funds for the business and to manage it effectively. By keeping adequate records, a young adult is in a position to manage his finances, time and activities in a more effective way. According to experts, poor record keeping is the reason why many young adults earn millions annually, yet they have no clue about what they do with the money.

Have a retirement plan

Experts admit that it can be a bit tough for an individual who is just starting out to be bothered about an ‘exit plan.’ However, they say the benefits of doing so are numerous. For instance, they say a decision to start a retirement savings account early means the individual has a greater chance of taking care of his or her financial needs after retirement. They add that in the course of implementing a retirement plan, the individual is also likely to get an insurance cover and write a will; all of which are important in today’s world.

- Simon Ejembi/Punch

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