The financial life of young people is often quite complicated. We live in a world where our personal finances are very complex and, unfortunately, young people do not always have enough knowledge of skills in this area to do everything right.
Many young people are faced with the need to take out an education loan, which is reminiscent of young people in the USA who also take student loans.
Many young people are forced to earn extra money. However, despite the fact that they receive income, no one is immune from financial errors.
Below I will talk about the main mistakes that young people make.
Lack of purpose and direction
If you don’t know where you are going, how can you come somewhere? This is the basis of any financial planning. Too many young people do not have clear goals.
However, it is important not only to have a goal. It is also important to have a rough idea of how you will achieve this goal.
First of all, it is important to determine what you want for yourself. As a rule, young people call the main goal – to pay a loan for education.
In addition, someone sets out to create a cash reserve "for a rainy day."
There are young people who also call goals such as buying your own home or creating a financial pillow in order to start a family.
But this does not end there. When you set goals, you need to do mathematical calculations to calculate money and time.
For example, you want to buy a home. Calculate how much it will cost. If you take a loan, then think about how much you can pay monthly and how much time you need to pay the full amount.
And so work through each of your goals.
Last but not least, when you set your goals and calculate everything, Prioritize: What goals are most important to you at the moment?
However, you should be realistic. The money that you will spend on implementing each of your goals is not endless. It is likely that you will have to postpone the implementation of some goals for a more favorable time.
Inability to manage cash flow
Cash flow management is a complex process. First of all, you need to be able to make a budget.This is not at all fun, and often quite boring, but budgeting is an important part that will give an understanding of where the expenses go.
Perhaps, someone will benefit from various applications and programs that allow you to competently draw up a budget, managing income and expenses.
Even if you use a simple notebook and pen while writing down your income and expenses, it will also help you better understand what expenses you can avoid and how to better distribute your income.
Another important point is the distribution of your expenses into categories and an understanding of how much you spend in each category.
It is in this place that a lot of discoveries are usually waiting for us, since we often do not suspect how much money is spent on seemingly insignificant things like coffee from a coffee machine.
And besides, this is where financial discipline begins, since you understand that you can save quite a good amount if you refuse a number of insignificant expenses.
Invest, without the right to do it
If financial management is pretty boring, then investing should be more enthusiastic and enthusiastic, especially in young people.However, no matter how profitable it seemed to us, most young people simply did not earn the right to invest.
Before you start investing, you just need to do many other things that a young man needs.
To begin with, it is worth solving the first two problems described above.
And if there is no clear budget and plan for achieving the set goals, then the beginning investor simply will not have enough financial discipline to achieve the desired results, and with a high degree of probability all the invested funds will be lost.
In addition, most young people, setting themselves short-term goals, as if we are talking about investing, then you should not expect quick results.
For a short period of time, most young people do not even have time to make a sufficient supply of cash, not to mention the achievement of some financial goals.
As a rule, if a young man copes with the first two points, then he has free money that he can start investing.
More details: http://www.vestifinance.ru/articles/9466
