Young people are the next generation of the financial market, however, in the current day and age, many struggle to afford to move out and are steeped in huge amounts of debt, which is preventing them from progressing in life financially.
Knowing how to make the most of your money can be difficult if you’re struggling to make ends meet on a day-to-day basis, but rest assured, learning to get a grip on your finances can be achieved if you’re in the know.
If you’re a young sportsman who’s looking to make your money work in your favor, here are 6 useful tips to ensure you’re on the road to a secure financial future:
- Be savvy with budgeting
One of the initial ways you can get a handle on your money is to ensure that you’re not spending more than you’re earning, which is where the act of budgeting comes in. It’s always a good idea to plan ahead, so you know what you can afford and how long a timescale it will take to save up the cash. Most people worry about budgeting when it’s far too late, which means having to dip into savings, or even worse – getting themselves into some serious debt. Working out a budget doesn’t require a great deal of work. You just need to figure out how much you’re earning monthly and the outgoings you need to pay out, which then gives you a rough total of the amount you have left to spend and save.
- Start an emergency fund
As a young adult, you most likely turn to your parents if you’re ever in financial crisis. However, there will come a time when you need to stand on your own two feet. An ideal solution would be to set up your very own emergency fund. Even if you’re in some minor debt, it’s wise to set a bit of cash aside each month and create a separate bank account for necessities (e.g., if your car breaks down or the insurance needs paid) providing you can afford to do so. Having a little bit of savings will make you feel more secure financially and may be the initial step in getting yourself out of any debt.
- Make an investment
Investing would be an ideal way of making the most of your savings if you have some extra cash sitting in the bank. If managed correctly, placing some of your savings into an investment scheme may allow you to gain some added income, but of course, this won’t come without the element of risk. Unless you’re lucky enough to gain inheritance from a deceased family member or win the lottery, it’s unlikely you’ll reap such rewards financially without investing. There are various types of investments to be aware of, each of which are ideally suited on the amount of money you’re looking to tie up and over a period of time that you’re comfortable with. Short–term investments would include the likes of Certificates of Deposit, whereas long–term goals may be getting your foot on the stock market, for example.
- Plan for retirement now
Although it may seem strange to start planning for retirement despite having just started out on the career ladder, there’s never a more suitable time to prepare for the long-term future than now. Financial advisors have stated that often a person’s biggest financial regret is that they didn’t save for retirement early enough. Doing so means you can choose when to leave work, rather than being forced to continue when you’re nearing the peak of retirement age.
Not everyone can afford putting $100 per week into a savings account for their retirement, but how much you choose to save doesn’t matter too much. A small amount each month or so, will suffice. If you think you may forget to make your retirement fund a priority, you could instead, see it as a bill that goes out of your monthly paycheck rather than a saving by setting up a regular bank transfer.
- Take out a payday loan
If you simply don’t have the savings to make emergency purchases, one way to get around it without piling up a huge amount of debt would be to take out a payday loan. Sometimes when you don’t have a back-up financial solution, you need a resource that’s immediately available to you. Taking out a payday loan could change your life, especially if you aim to use it wisely to fund your education or pay off an outstanding debt which is charging you a great deal of interest.
A payday loan is essentially one way of short-term borrowing, so there shouldn’t be any fears about getting yourself into further debt. Most consumers will qualify for the loan, providing they can verify they are getting a regular income; therefore, this method will make a quick and easy solution forgetting your hands on that much-needed cash. If you wish to find out more about online payday loans no credit check then take a look at this website to see how Bonsai Finance could help you.
- Start building a credit score
Even if you don’t need a credit card at the current moment, building up a credit score would be hugely beneficial for securing a mortgage in the future. Sometimes, sensibly paying for all purchases on your debit card isn’t the best option. Financial advisors would state that even though you’re making purchases with caution, no-one is aware of your sensible actions. Taking out a low-limit credit card would be ideal for paying off minor expenses such as gas or phone bills, for example, to build on your credit score.
This way, you’re proving to the bank that you can take responsibility for your finances, but of course, a positive outcome will depend on if you pay the bill on time. If you do choose to use a credit card, you need to be aware of the repercussions of failing to make payments on the deadline date – it could end up costing you thousands of dollars.
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