Some young adults believe that financial planning and saving a portion of their income is only for older people who have a lot of money to put away. But even with limited funds, it is wise for people at any age to prepare for the future by putting away at least a small portion of their income each month. Financial planning is an overview of where you are now, what your destination is and what you'll have to do in order to get there. By planning and establishing priorities, you can gain control of your financial resources and establish a more secure future.
Having Trouble Saving Money?
You may think you’ve already cut your spending to the bone, yet you may still have options available. The best way to cut spending is to squeeze a little out of almost every spending category. However, don’t wipe out all the things that make your life comfortable. You need some pleasure to have the incentive to carry on. The secret to successful saving is knowing how to do it without drastically upsetting how you live. Here are some ideas to consider:
- Pay yourself first. Start saving regularly, even if it’s just $20.00 per month. Use direct deposit to place a set amount into a savings account each payday.
- Stop using your credit cards. You can reduce interest costs and increase your available financial resources. Once you’ve paid off your loans, keep paying the same amount . . . to yourself.
- When you have money left over, earn a raise, receive a refund or cash gift and invest the money. You know you can get by without it now, and it will be worth even more later.
Benefits of Planning
It is unwise to assume that you will be able to retire comfortably or that others will take care of you without thoughtful financial planning and preparation. Lay-offs, illnesses, or other catastrophes can leave you with nothing to fall back on. By planning, you'll be less susceptible to financial difficulty. By using a systematic approach to financial management, your goals for the future will be more secure. By taking control of your finances, you'll be able to more accurately predict how much you need and when you will need it.
When you determine your financial priorities, you'll find it easier to control any tendencies you might have toward impulsive spending. You will know where your money is going and be less likely to spend it without thinking. More important, you'll know that you're building a brighter and more secure future today.