6 Tips on Money Management for Young People (2024)

Have you ever wondered why so many young adults across the nation have monstrous credit card debt? The reason is the lack of having a proper and well-disciplined budget and financial life. People often make the indiscreet use of credit cards and do not pay bills on time. They do not adhere to their budget and spend money beyond their limits. All these lead individuals falling into overwhelming debt and making a get out of debt plan. To avoid such a precarious situation, it is wise to follow some money management strategies that can help them insure a healthy financial future.

1. Avoid credit card debt:

Credit card debt is one of the most common financial obligations in the U.S. millions of individuals have thousands worth of credit card debt. Credit card debt has been known to kill more savings plans than any other known financial cancer. So try not to make the indiscreet use of credit cards. Pay the bills on time in order to avoid accruing huge interest rates and wasting money on them. It high time to realize that credit cards are a trap that takes a long time to come out of it.

2. Buy used:

One of the most effective money management tips for young adults is to buy less expensive and used items. If you’re planning to buy cars, furniture or any other expensive items, consider buying used ones. Finding one that is couple of years old can save you a good amount of money. Also, for fashion enthusiasts, it is advisable to buy designer clothes from consignment shops at a much lower price. They might take you a long time to find, but will help you save big bucks.

3. Start a retirement plan as soon as possible:

With the recent economy, when there is no guarantee to your financial future, it is important to start making a retirement plan on the very first days of your employment. Find out if your company provides you with the benefits of a 401(k) retirement plan. If yes, grab them. A 401(k) retirement plan is a special type of account to which employees can make contributions on a post tax/pre tax basis. Even employers offering a 401(k) plan can make contributions matching the plan on behalf of the employees and can add a profit sharing feature to the plan. So if you start now, you will be amazed by how much money you will have saved in as little as 5 to 10 years.

4. Set up an emergency account:

Setting up an emergency fund is extremely important, especially when there is no certainty in life or career. Put a fixed amount aside each month after meeting your daily routine expenses. Make sure you use this account only when an emergency situation arises, like ill heath or accident. This can also be used for some occasions, such as starting your own business.

5. Personal savings account:

No matter which bank you choose, it is important to start your own interest bearing savings account. Do not let your money sit in your drawer or checking account, you will spend it. Instead, put some amount in the savings account each month. Doing this, you will save a good amount of cash over a period of time. You may even ask your employer to delegate some amount of your paycheck directly into your savings account. This way, you can save effortlessly.

6. Earn extra:

Find out some ways to earn extra cash, with which you can pay off your debt, if any and meet household expenses. If you have writing skills and knowledge on a particular subject, utilize it by writing web articles and earning money. You can also try things like babysitting, selling goods on Craiglist and ebay, tutoring, walking dogs and others.

In conclusion, following these above mentioned money management tips, young adults can expect to be able to manage their finances and have a stronger financial future.

About the Author – This is a guest post by Barbara Delinsky who is a financial writer of Oak View Law Group. Through her articles she helps people get answers to their questions regarding their personal finances. She also gives advice to consolidate debt and to live a debt free life.