The financial choices we make don’t only affect present us, but future us as well. And sometimes, even as adults, we don’t make the best choices when it comes to money. A lot of us have had to learn money lessons the hard way and while we can’t teach you everything (because we’re still learning ourselves) we can share with you some personal finance basics that surprisingly a lot of people don’t know. Let’s get started!
(image via: istock)
An emergency savings is a must. If COVID taught us anything, it’s that you never know when you could lose your job, but aside from job-related disasters, you never know when something will go wrong with your car, or your heating and/or air, or the dog, or the insert literally anything here. An emergency savings doesn’t make everything okay, but it takes the financial stress off of you so that you can fully focus on the situation at hand.
Another must? Living below your means. This can be difficult in today’s world when convenience tends to win over everything else, but we promise you that eating at home isn’t that bad. If you’ve got all the money in the world and can swing it, by all means, have at it. But for most of us eating out every night is out of the question, that Starbucks drink twice a day probably isn’t necessary, and maybe a limit of just one subscription box? Living below your means allows you some wiggle room with your finances, which we should all be aiming for.
Time for that ‘b’ word nobody likes: budget. Budgeting can be hard, and a lot of us don’t like the idea of limiting certain things such as streaming services or how often we get to do fun things. But budgets are really important for living below your means and saving money.
(image via: istock)
Don’t forget to pay yourself. After bills are taken care of and you’ve put a little cash in some type of savings account, give yourself a few bucks to do whatever you want with. If you decide that you would rather put a little extra in savings or a particular budget, then by all means do so. But if you’ve been eyeballing a new book or a new restaurant in town opened up that you’re dying to try, then go for it. The important thing is you’re not going overboard.
It is never too early to start saving for retirement. We get it, retirement seems like a really long time from now, but it’s really not, and you’re going to need money to live on. A lot of people think that if their employer doesn’t offer a program, then they simply can’t have a retirement fund and that’s just not the case. Look into both Traditional and Roth IRA’s if you aren’t offered a plan through your work, and if you are, you need to be on it.