Whether you just graduated from college or are moving out on your own, it can be hard to keep track of your personal finances as a young adult. Read through these 6 common financial mistakes and learn how you can avoid them.
1. Not Taking Advantage of Discounts: There is a world of special prices for students and young people out there, from banks to movie theatres – take advantage of them! Do your research beforehand, find out what discounts are available to you. Check out Groupon or Retail Me Not.
2. Misunderstanding Credit Cards: Whether it be cash advances, large balances, late fees, or only playing the minimum balance, credit cards can lead to much more trouble than realized. The fine print and details of credit cards are often times misunderstood by young people. Read into what you are signing up for and ask plenty for questions when you do not understand something.
3. Signing Up For A Rental Or Mortgage That Is Too Expensive: Signing a lease for rent or applying for a mortgage that leaves you with little money to do anything else, will not only leave you at home but put you at risk for debt. You have no cash at hand, so what do you do? Sign up for credit cards to make up the difference in order to enjoy your lifestyle and pay for unexpected costs. Avoid making this mistake, sign up for a lease or mortgage that is within your budget in order to avoid creating debt for yourself.
4. No Rainy Day Fund: Setting aside money for emergencies gives you cushion for unexpected events and helps you avoid adding to your credit card balance. Maybe your car got towed, or you get injured, having a “rainy day” fund keeps you prepared for the most unexpected events. Including a “rainy day” fund as a part of your budget, will eventually help the money add up.
5. Failure To Realize How “Little Things” Add Up: Your daily coffee stops, eating lunch out, or weekly shopping trip of $100, can all add up to thousands of dollars a year. Cutting back can help you save a lot of money for savings, retirement or paying down your debt.
6. No Financial Planning Or Budget: Some young people are tainted by the idea that saving for the future is only for people thinking about retirement. Everyone can benefit from financial saving whether you are planning for retirement, purchasing a home, or traveling around the world. It is also important to budget your daily expenses. Sit down and look at what is left after your wages and fixed expenses. Not knowing how much you have can easily lead to spending more than you can afford. A budget will help you determine what you need to do to pay for your next vacation.
Nationwide Credit Clearing
2336 N. Damen
Chicago, IL 60647
Toll Free: 877-334-3296