If there’s one requirement youths need to have in becoming a full-fledged working adult, it would be managing your own finances.
It’s among the first few experiences you will face upon landing your first serious job, especially when you no longer receive an allowance from your parents and are now getting paid on a regular basis.
Managing your finances in your early adulthood can be both fun and challenging, as you are most likely to use your salary to pay for many things, from new clothes, to flights and accommodation for your holiday, student loans, utility bills, and groceries.
However, there are many mistakes frequently made during this period that can send your finances on a downward spiral.
Recognising these mistakes will help keep your finances on the right track. Here are a few spending habits to avoid:
Not knowing where your money goes
If you’re not careful, you might be making so many purchases that you forget what you have been spending on.
So, the first thing you should do is to create an expense budget in order to see where your money goes and where you can cut back on your spending.
When listing your budget, you should include your fixed (e.g. monthly bills, loans) and variable (e.g. groceries, petrol, entertainment) expenses.
You can easily download budget apps on your smartphone where you can record your daily spending and keep track of your expenses. This will also allow you to stick to your monthly budget and avoid overspending.
Due to today’s hectic lifestyle, many of you might find that spending money is one of the ways to destress.
However, doing so can affect your finances, as you might end up spending more than what you earn.
Needless to say, it’s important to realise that emotional spending only provides you with a temporary feel-good effect, when it’s by right not something that you should do when you’re feeling down.
Not knowing your wants and needs
Having more money will give you the urge to spend on what you thought you need when it’s actually just what you want.
Words and phrases at retail stores such as ‘super saver sales’, ‘massive price drop’, and ‘free gift’ with a single purchase tend to make you feel like you are saving money when buying what would eventually become unnecessary things.
Thus, determining what you need and what you want will help you avoid impulse buying and overspending.
For instance, food and toiletries are necessities, while a nearly RM20 coffee drink from a fancy café might be what you most likely want rather than what you truly need.
This is a weekly column by SarawakYES! – an initiative driven by Faradale Media-M Sdn Bhd and supported by Angkatan Zaman Mansang (AZAM) Sarawak – to provide advice and stories on the topics of education and careers to support Sarawakians seeking to achieve their dreams. Join us on Facebook, Twitter, Instagram and YouTube.
First published in the Borneo Post online on 29th February 2020: http://bit.ly/2wiwyze
Photo by Andrea Piacquadio from Pexels.