Let’s be honest, finances are probably one of the most important aspects of adult life, but it is the absolute last thing people ever want to discuss. As financial planning and other “adult” concepts are rapidly leaving the education system, more and more young adults are entering into the real world with no real idea how to plan for their financial future. From taxes to planning for retirement, these concepts scare young adults but – whether out of pride or a desire to hang onto their dignity – no one wants to ask questions about this out of fear of sounding dumb. Especially, when it comes to Tax laws, in this case, it is way good to have contacts of some reliable tax debt lawyers who will help you to understand endlessly evolving tax code.

But this fear shouldn’t exist. Finances can sometimes be complicated and on the surface level a bit difficult, but there are ways to overcome these challenges. Without oversimplifying or overcomplicating the world that is personal finance, there are five aspects of personal finance that – if you can commit to memory – you will be set to start your journey shaping your financial future.

This is the Most Important Concept

If you only leave this discussion with one iota of knowledge, let it be this: always, always spend less than you earn.

In the next steps, you will see that there are two paths to achieve your goal of saving money: make more or spend less. One option seems more lucrative than the other, but both are viable options.

By keeping on track with either one of those options, the gap between those two numbers – what you spend and what you earn – will increase, and that gap becomes your window into how well you will be able to care for yourself in your retirement. Simply, the harder you work, the more money you make; or the harder you work, the less money you will spend and in either eventuality those plans for a beachy retirement will come sooner than you think.

Earning More: How and Why

  1. Go back to school. This may seem counterintuitive as schooling in many places requires quite a bit of money, but if you can add a few extra letters after your name or current title, your salary has the potential to increase. Also, speak with your current employer and see if they will either help you pay or reimburse you for your school fees once you complete your certificate or degree plan. This would show your current company you are invested in your career and want to advance, and if you work hard enough, the company may very well hold a stake in that future.
  2. Find your side hustle. Whether this means you work as an Uber (or some other equivalent) or you find some freelance work online, making a few extra bucks here and there may not seem like much at the time, but it can add up faster than you can imagine.
  3. Don’t cut ties. You never know when a past friendship, business colleague, or any other relationship in your past may come in handy in your future. Best way to keep yourself from burning this potentially profitable bridges, resist the urge for revenge or to gossip if you ever feel wronged in a situation. Doing something like that at the moment makes you feel better about yourself for all of five minutes before you realize that it is the worst decision you could have made and the potential for that to come back to you and ruin a potential possibility is very high.

Don’t Cheap Out, Prioritize

Many confuse this bit of advice with being a cheap skate and that is not what this means at all. It merely means prioritizing and making a budget, so you know exactly how much you want or have to spend – on things such as rent or groceries or transportation fees. You will find through the budgeting process that there are a lot of things you are spending money on that are nonessential.

Though you should still plan to spend some money on social activities or going out, all you need to focus on is how much you are spending and if what you are doing is going to bring you joy in reality and in your memory or if it will fade to black. Many people think that saving money means that you can’t have any fun, but in reality that will only lower your mental health status making it challenging to stay on track.

Money Management

  1. Have an emergency fund, because unplanned expenses happen. In order to create an emergency fund, take a part of your paycheck every month and put it into either a physical or theoretical jar for a rainy day. Whether that may be car repairs, an unplanned hospital visit, or anything else unexpected.
  2. Pay off all high-interest debt. Any and everything with an interest rate of 9% should be paid off as soon as possible. Once you get the higher debts paid off, continue down the level of interest until it is all paid off.
  3. Invest, Invest, Invest! Many adults who hold full-time career also try to diversify their financial portfolio through investing. This step, often viewed as the most terrifying and with the most risk involved, you can always solicit the help of a professional. However, if you want to go it alone, there are several apps you can download onto your smartphone that you can use to start your investment journey.

Carve your own path!

Personal financial planning is not about being rich at all; it is about having the ability to choose your own life. When you have the ability to make your own financial choices, and you have the knowledge that the choices you make will not jeopardize your future financial self.

Remember, you can create your own future. You can be successful in a career you are passionate about. And you can plan for your future without jeopardizing your present.

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