That moment when you are setting out for high school, college or even for the armed forces, is no doubt an exciting one and more importantly, a gateway for you as a young adult to emerge as the next financially independent person in your family. However, besides memorizing books, acquiring a sound knowledge regarding the ways to get your financial house in order will always help you along your road to success.
This is because developing responsible financial habits quite early in life will, in turn, ensure stable financial future for you.
Tips for a financially trouble-free life
Here are some ways to organize your finances and get them in order to achieve complete financial nirvana by the time you retire:
- Start to save now – It is very important to start raising a nest egg at a very young age. This is due to the simple fact that the earlier you start off with saving money, the better will be your savings amount.To begin with, you may contribute a part of your monthly income towards some of the tax-deferred, employer-sponsored 401(k) plans or else in an Individual Retirement Account (IRA).
- Act responsibly – Though getting loans and using credit is advisable, yet it requires you to be a lot responsible in fulfilling your monthly payment obligations on time and repaying all your debt balances, as per the loan agreements. At the end of the rope, your creditors will be expecting you to be regular in making the repayments.Actually, having a healthy amount of debt to your name and repayment history will create positive impact on your creditworthiness, thus keeping the doors open for you to get more credit in the future.
- Follow a budget – Efficient planning as well as budgeting is the key to a financially sound career and retirement. Make goals (both short-term and long-term ones), get a budget and keep a record of all your monthly expenditures.Financial habits like proper budgeting and responsible spending habits will stay with you for the rest of your life.
- Be wise with credit – In order to be wise with your credit, you’ve got to understand it well. If you don’t, then you are bound get saddled with bad debt. Terms and conditions of credits like student loans, credit cards, auto loans, mortgages, etc should be known like the back of your hand. Shop around for better rates and repay all your loans well within their maturity period.Knowing the adverse effects of being late with the repayments will ensure that you pay your debts off just as scheduled. You must know the nitty-gritties of credit reporting and their effects on your credit score. This score is used to determine whether or not you are the right person to be given a loan, say for example, mortgage or car loan.
- Get them consolidated, if needed – Finally, messing up one’s finances and getting strapped with overwhelming debt is normal, as Dave Ramsey has said, but then he has also advised his followers to be weird! So, if you’ve racked up huge amount of credit card balances or have been paying off a number of delinquent payday loans, then getting them consolidated into one can be a suitable alternative.Take out a debt consolidation loan and repay all your debts with that. In this way, you get to save a lot of money as interest on those loans and turn your delinquent accounts into current ones.
However, to obtain an affordable debt consolidation loan, you need to have a stellar credit rating. In such a scenario, you may approach a credit union or a non-profit debt relief service provider to help you with your loan consolidation efforts.
Michelle Blackmore is a financial writer who has insightful knowledge on the contemporary financial issues and the economic state that the nation is going through.Presently she writes financial articles for websites, communities and blogs.
Subscribe to get the free Master Your Money course!
Join the free email course and finally learn how to manage your money better, pay off debt, save more money, and reach financial freedom. Get our newsletter and get access to the freebie: