Financial tips, I wish I knew when I was young. Wait, do young people take advice? When you are young, you feel invincible and you think you know everything! Taking advice is hard at that age, but here goes anyway. I encourage making mistakes and trying different things, but preparing for your future is important too. I have put together five (5) important financial tips t hat all young people should embrace.
I grew up with parents who were very successful. I started “working” with them when I was four or five years old. It consisted of going to either my mother’s store or my father’s business to help out. Today, it would be called indentured servitude! I was not paid, not even an allowance and worked every weekend. It was a good thing I got to play with my friends during the week. At the time, I thought all children did these things!
I was learning and I did not even know it! Children learn through observation, role models, feedback, play, peers, and benefit from actually doing the work. In addition, I learned great social skills such as work ethic, communication, responsibility, self confidence, teamwork, flexibility and problem solving skills. Financial skills were just part of the rest of the experience. I want to share what I learned from them and over the years that will benefit all young people.
5 Financial Tips for young people
- School is your job – When you are in school get good grades. Simple enough! Every employer until you get experience in your career wants to know how you did in school. As an employer, I always asked to see a student’s transcript. Grades are important as one indicator to evaluate your success. The other is you attendance record. The habits you form over a twelve (12) or sixteen (16) year period is tough to break. The students with poor grades or attendance always say the work is different. I am not looking for all A’s, but I am looking for some success. More importantly, how do they handle a variety of decisions?
- Math is important – So many children do not like math because of a lack of skills. They think math is just numbers, but it is so much more! There are calculators, computers and smartphones for all of that. Right? Math prepares your brain similar to exercise for your body to handle complex thinking such as decision making, problem solving, calculations, logic, judgment, organization, play an instrument and sports. Athletes and Rock stars need math!
- Live within your means – Live on less than you earn! The only debt you should incur is when you buy assets. An asset is something useful or valuable you own that usually increases in value such as cash, investments, home, real estate, income property, art, etc. A college education is an asset that increases your income over time.
- Savings and investing – Start saving early and at a regular basis. Don’t stop there! You need to invest your savings so it will grow over time. Contribute to a retirement plan and save! Remember saving for your first car, prom or college? It was something you wanted and it was important to you. Saving for a first home, wedding, marriage, children or retirement. The reason is just a label to give you motivation! Retirement is not something a young person thinks about normally in their twenties, thirties, or even their forties! The earlier you save, the more choices you have later. Have you ever thought of financial independence or retirement in your thirties?
- Goals and plans – Goals and plans are part of life not just school. Young people have goals, but they are usually short term. Short term goals are expected to be accomplished usually in less than one year. These are goals accomplished in days, weeks, or months. It is not enough to simply set a goal. You have to establish a plan so you can monitor your performance. Long term goals usually take more than one year, often five, ten or more years in the future. Planning long term goals is even more important because it is usually many years in the future. A plan helps you stay on track to achieve your goals. Long term goals include college, graduate school, career, retirement and wealth to name a few.
Although these tips are intended for young people they apply to everyone. The sooner you adopt these tips, the sooner you will achieve success. When you are young you want to do everything and you should! Most people will work forty (40) to fifty (50) years, but your future is important too. What is your strategy for college and graduate degree, career, personal finance, marriage, and retirement.
Your grades help determine your future earnings, why not work at it? Math is more than numbers! If you lack the skills, it will affect the rest of your life. Make savings a priority and live within your means. Make savings a priority and learn how to invest. Last, goals are the things you want out of life. They should be important to you! Put together a plan to make it happen. It is not something you can catch up or make up later. If you have savings (including retirement) you have choices in life.
Young people usually do not look too far into the future, but they should. A typical interview question is where do you see yourself in five (5) or ten (10) years? It is not just an interview question! “If you fail to plan, you are planning to fail.” (Ben Franklin) It is not just a famous quote, it is true! You would not get on a bus not knowing where it is going, but you do not plan your future. These are financial tips, all young people should learn and use!
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