I’m sure that everyone reading this feels that they make better decisions now than they did when they were eighteen years old. Life gives us many experiences to learn from, and (hopefully) we become wiser as the years pass. This applies to every area of life, whether in your relationships or with your finances. Here are three financial lessons that we all wish we knew when we were younger.
The first financial lesson is to always pay yourself first. This may seem foreign if you haven’t ever heard of the idea, but the general principle is to make saving a priority before you spend your money on anything else. To some this may seem backward. You pay all of your bills and then you save whatever you have left, right? Well, if you flip your mindset to saving first, and then using the leftover money to pay your bills, it will be easier to manage your discretionary spending while ensuring that you are saving for the future.
The next important lesson is to be very focused on making timely payments on credit cards and personal loans. If you miss even one payment, your credit score could take a hit, and this will affect you for years to come. A low credit score will make it harder to secure a loan or receive a low interest rate. You may even be declined for credit when trying to purchase a car or home. Your credit score is very important for your financial future, so it is important to make sure you are paying off your obligations in a timely manner.
The last financial lesson would be to not borrow more than you need for school. This one is very important for the younger generation. Borrowing money when you are in school may not seem like a big deal, but it can have a huge impact on your future when you are older. Once you begin paying back these loans, you will see the impact it has on your budget. Only borrow what you need for school. Don’t use the money from your loans to purchase things that don’t pertain to your schooling. Try to be as financially responsible as possible and keep your student loan debt to a minimum.
Achieving financial success is not easy but making smart choices when you are young will definitely help you achieve your goals faster and more efficiently. It is never too late to start making wise choices. If you know a young person that would benefit from hearing these three lessons, please share this article with them. Thanks for reading!