Financial Aptitude Handbook For Young Adults

By Medha Roy Chowdhury | May 28, 2019

Do you want to have a strong financial footing in the long run? The key to mastering a strong financial game is to take your finance seriously right from when you reach your teens.

A teen’s financial journey truly begins in childhood, when as a kid he or she learns how his/her parents spend considerable time and efforts for earning money. As a kid, you must have also been used to getting a small allowance at the end of each month.

Remember those days when you were asked to run an errand or finish a household chore in return for a toy you so dearly wanted? Well, don’t get your parents wrong? All your parents wanted was for you to understand the importance of saving money and the need to use it wisely. However, even though our money lessons begin early in childhood, we agree that distinguishing between needs and wants can be quite challenging!

Additional Reading: Money and Kids – What to teach at what age?!

We’re here with financial lessons for young adults. If you’ve just stepped into adolescence and wish to cultivate healthy personal habits, look no further! These pointers are sure to help you understand the fundamentals of money.

Step 1: Budgeting

How many times have you heard your parents say, ‘Learn to live within your means?’

Well, self-control is the key to keeping your finances in order. Yes, paying for your impulsive buys with your parent’s Credit Card can be convenient, but it’s better to wait until you’ve saved up enough money. Why, you ask? Small moves such as this will help you gain control over your finances and manage your money better!

If you feel unsure while making a budget for yourself, Instead of relying on others for advice, take charge and read a few basic books on personal finance. Instead of relying on advice, we suggest that you take charge and begin by reading a few books on the basics of personal finance.

What works for your siblings or friends may not be the perfect solution for you. Once you’re acquainted with the fundamentals of finance, don’t be afraid to use tips and tricks that work best for you.

Additional Reading: How To Help Your Children Understand Budgeting

Step 2: Tracking

Once you’ve set up a budget, you’ll realize how important and tough it is to make sure your expenses aren’t exceeding your income. Try making small and manageable changes in your everyday expenses without disrupting your budget. A few bucks saved here and there will pile up over the course of the month and is sure to go a long way!

Additional Reading: Time To Tell Your Teenage Kids To Get Personal With Their Money

Confused about how to know where your money is going? Yes, undoubtedly tracking your every spend may seem tedious. But once you keep at it for a couple of months or even a few weeks, you’ll begin spotting a trend. This will surely give you a better idea of your cash flow and your recurring monthly expenses.

Step 3: Building

‘You are your most important investment!’ Ever heard of this credit mantra? This oft-repeated proverb is time tested and when taken seriously, it can help you attain financial nirvana in the years to come.

No matter how limited your allowance may seem, if you’re able to set aside even a tiny sum from it in a Savings Account each week, you’ll be amazed at the sum you can build over time.  Start small, even if it means saving a couple hundred bucks each month! This sum of money should be directed at your emergency fund!

Getting into the habit of treating this monthly savings as a non-negotiable expense and setting it aside is one of the surest recipes of fiscal freedom later in life! If you want to strengthen your financial game and let your money grow over a period of time, you can even consider parking it in a Fixed Deposit.

Additional Reading: Tips To Prep Teens For Better Finance Habits In The Future

Step 4: Upgrading

As you get a grip over your finances, it’s time to prep for a more financially secure future. Soon, you’ll step into adulthood and the menace of bills will come knocking at your door! Worry not! The pointers above are sure to give you a head-start into financial well-being.

Additional Reading: 7 Tips For Teenagers To Make Money

Gradually, try understanding the need for Insurance and foraying into taxes and maintaining a good Credit Score. If it’s too much to process, don’t panic! Financial habits don’t come easy. It’s a skill that we master over time, and most often, by making mistakes on the go!

Additional Reading: Wonder Years Or The Blunder Years? Teens And Money Management

Personal finance is such an integral part of over lives that it should be a part of our academic curriculum! However, money management doesn’t have to be a scary thing. If you’re new to finances, do give us a shot. We’ve got everything financial covered under one roof!

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Category: Teens & Money UCN
Medha Roy Chowdhury

About Medha Roy Chowdhury

Square peg in a round hole, Medha reads whenever she gets the chance to. She is happiest when travelling and dreads having to choose between the hills and the sea. Dog lover at heart, she is in pursuit of adopting a few canine friends someday. Weird as it may be, she bakes when stressed. Previously a Market Research Editor by profession, she takes a keen interest in finance. When she is not reading, you’re sure to find her with her ukulele.

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