Early Financial Education Can Reap Big Rewards
Many adults struggle with financial challenges for the simple reason that they never learned sound money management principals when they were younger. Unintentionally running up high-interest debt, living above your means, and not planning for the future can all create money woes down the line. That’s why your best bet is to learn basic principles and develop good money habits at a young age. RAMShard has the following tips on how to do just that.
Teach Kids About Money
Many parents give kids allowances, but to help them grow in their financial knowledge, consider tying at least a certain percentage to specific chores, and insist on setting aside a portion for savings. Also encourage kids to save for big-ticket items to instill the habit of delayed gratification. According to the National Financial Educators Council, this can help them avoid the trap of revolving debt.
As they get older, encourage part-time jobs and help them learn how to create a budget and stick to it. When it’s time to buy a car, they’ll be better positioned to have a down-payment ready, and be able to handle the responsibility of car payments, vehicle insurance, and maintenance and upkeep. By the time college comes around, they’ll know how to comparison shop schools, apply for loans as needed, and come up with work-study income to help them make ends meet.
Start Saving As A Young Adult
Far too many young people assume they have plenty of time to save for retirement, often overlooking the fact that even small investments at an early lage can lead to a compounded nest egg over the years. In addition to establishing an emergency fund and savings account, consider things like Roth IRAs and traditional 401K plans. According to Bankrate, Roth IRAs allow you to make tax-free contributions to a retirement plan, while 401K plans are typically offered by employers. You select how much to contribute via payroll deduction, and companies often provide contribution matches which are invested in mutual funds. There are some types of tax advantages with this type of system as well.
Consider A Business Startup
Young people who make smart decisions about their finances can often parlay that good judgment into a successful business venture. Whether it’s a side hustle or a full-time operation, being a small business owner can help you achieve financial independence, as well as a healthy work-life balance. In pretty much every business, advertising is key. Initially, of course, you’ll be limited in terms of budget, so take advantage of free opportunities by advertising on social media and using a free logo maker to give your company a creative face.
In addition to basic business startup needs, like obtaining a business license, registering the company, launching a website, and developing a business plan, make sure you’re doing something you believe in, and feel passionate about. Treat others fairly, under-promise and over-deliver, and treat clients, staffers and colleagues with respect. While launching a successful operation takes time, hard work and dedication, it can pay big dividends down the line, and be both personally and professionally fulfilling.
Manage Your Money Well
Once you’re in a regular earning role and appropriately budgeting for everyday needs, saving for the future, and paying all bills on time to retain a good credit score, consider an investment strategy. You can learn the ropes on your own or consult a financial advisor to help you make informed choices based on your long term financial goals and income streams. This approach can help you build wealth, maximize some types of tax benefits, and ensure a financially secure future for yourself and your family.
RAMShard is on a mission to empower server owners, businesses, and developers by providing a high quality service at an affordable price. Call 1-855-253-4678.
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Updated on: 11 / 24 / 2021