Learn now to save time and money later.
Financial literacy is a huge advantage in life. If you know how to manage your money, and you understand consequences and complications when it comes to finances, then you’re much more likely to be careful with your cash. However, financial literacy is rarely taught, either by parents or in school. So, how can you ensure that you improve your financial literacy rate while you’re still young?Here are some expert tips from the guys at the Solution Loans Personal Finance Blog:
Start learning how to budget
It doesn’t matter how small your current income is, the point of budgeting is learning to live within your means. Budgeting is a key part of financial literacy and you can never start too early. If you can budget with what you have now, when the consequences of failing are likely to be less severe, then you’re putting the skills in place to ensure that you can manage larger amounts of money in the future (read more about that here).
Get used to managing cards
If you don’t currently have a bank account with a debit card attached then open one. If you’re old enough you might also want to consider looking into a credit card. The point with both of these is to learn how to manage the cards in a financially healthy way. With your debit card, get used to any charges that apply, the cheapest ways to use the card and where you can use it to pay. If you get a credit card then get into the habit of clearing the balance every month while you have a small limit.
Look for a job
Earning money is a great life lesson – and you can get a job from a pretty early age. Whether it’s delivering newspapers, babysitting or pet sitting, if you have a job before leaving school then you’re learning what it’s like to have an income that needs to be managed. Working life is a reality for 99.9% of people when they leave school and acquiring the enthusiasm and discipline for it when you’re still at school can be very beneficial when it comes to working full time.
Start saving as soon as you can
Alongside budgeting, saving is probably one of the most important parts of financial literacy. There are plenty of statistics that show us that most people find it very difficult to save – and many don’t save enough for key life events, such as getting married or retirement. Your income may be small right now but you can still use it as a way to save. Identify an item or experience that you really want and then work out what you can afford to put aside to cover the cost of it – and how long it will take to pay for. If you don’t have enough to make the payment then learn to wait until you do.
Start setting some money goals
Goals will give some structure to your financial life and help you to remain focused and organised – and it’s never too early to start identifying these objectives. Do you want to own a property, run a business, have a pet? All of these things will need to be planned and budgeted for so it’s a good idea to start considering your financial goals before you leave school.