Financial Tips for Young Adults

We all are only young once and we have to live your life to the fullest. That also means we have more energy when we are young and that is the best moment to start preparing and planning for a better future (financially) in a long run. Want to know more about it? Go on and read my “Financial Tips for Young Adults”.

Financial Tips for Young Adults

At the time of writing, I will be 33-year-old in eight days. I find youth seems to fly by so quickly and time does not wait. I think I am still considered a young adult today. Just like each one of us here, there is no reason why I should not have a financial plan. I have started planning mine seven to eight years ago while I was still in the University pursuing my master. Here are some useful financial tips for the young adults and to take charge of your financial health.

Financial Tips for Young Adults

1. Start saving and manage your debt

As a young professional having entered the workforce at the beginning, the take-home pay may be nothing much. In Asia, most of the young adults stay with their parents and most expenses may be insignificant  as food, lodging and utility bills will be covered by the parents. One might think the saving should only be made after spending on entertainment or luxury items (spending should be made after saving, read my previous post on Cut Expenses Save Money)

One day you will be living independently and taking care of all the necessities from your take-home paycheck. So one should be careful right from the first paycheck and set aside money for necessities. By doing that, even your parents are supporting you financially, that set-aside money can be banked into a saving accounts. I personally suggest young adults not to overspend on a last gadget as that is the main problem in the society today that people overspend on new tech gadgets just to make themselves look better. So, DO NOT SPEND ON THINGS THAT MAKE YOU LOOK COOL BUT MAKE YOU POOR at the end of the day.

There is a post I like very much on  “People Who Spend Money On Experiences Instead Of Things Are Much Happier“, where the article talks about “life is about memories and not diamonds”. The post does not talk about financial planning but it encourages people not to spend much on gadgets and things.

Minimize the usage of credit card, interest charged on the outstanding balance can accumulate so fast that will leave you with huge debt. Some banks are smart enough that they trace your outstanding balance of your credit card, and make some personal loan offer to just settle the debt. Do not simply fall into the trap as you are basically adding up your depth just like rolling a snowball – become bigger and bigger. So, budget carefully and save what you can and do not spend on credit.

Financial Tips for Young Adults

2. Set up an event fund

Plan your future and develop a forward-thinking mindset by thinking of what you want to achieve in 3, 5, 8, 10 years time. At some point down the road, you will be getting a car, buy a property, throw a wedding party and start a family. For instance, we do not start saving only after you have fixed a wedding date. One has to put at least some money aside, as earlier as possible. One has to reserve some money to access the substantial liquid funds in order to purchase a property, even if you are planning to secure loans from the banks.

3. Keep working and study

Traditionally, the previous generations believe that their children’s chances in life will be greatly enhanced by obtaining higher educational qualifications. This belief does not work anymore in recent years as there are more and more professionals with degrees, masters and Ph.D. as anyone can get pretty much any qualification they want, just on the Internet. That means we are living in a world with significant competition and to stand out, one has to be realized that qualifications are now a dime a dozen. MONEY management is the real deciding factor of quality of life, not education. From my point of view, people should be suggested not to “take a break” from your job in order to study, we should be studying part-time while working. I know it is difficult, but that is how we could stand out from the crowd.

4. Invest and take health insurance as early as possible

I am not entirely sure how the health insurance works in other countries, but in most of the countries in Asia. You are basically on your own when it comes to health and medical expenses. Life is unpredictable. When we are young, we feel invincible. When one reaches 30, sometimes early onset health complications and lifestyles diseases can already start to set in. We are not living in a world full of pollution, the air we breathe in, the food we take and the things we use every day. Anything can happen, anytime, anywhere. So young adults should take up health insurance as early as possible because the premium will be low and manageable. You can lock in an insurance package loaded with benefits at a younger age.

Financial Tips for Young Adults

Conclusion

1. Set aside time to review your finances and learn about money management. There is no such thing as “Wealth” or “Financial” planner that will take care of your money. You are the owner of the income you generate and you should be the one taking charge of that!

2. Take the responsibility of your financial well-being at an early age. Review your financial goals and develop strategies to increase revenue and maximize returns on your financial portfolio.

3. Learn how to make basic accounting and develop a habit of controlling and managing your cash flow from very young age.

Money management requires time to learn and it is best to learn as young as possible.

Thanks and hope you enjoy my post on “Financial Tips for Young Adults”

Alex

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10 Responses

  1. edy says:

    Hi Alexy,
    I totally agree with you. Young people has more energy and should already know how to be prepared financially.
    Thanks for sharing your tips here. Very helpful.
    I myself will try my best to plan for my future and will consider health insurance.

    • Alex Y says:

      Hi Edy,

      I saw your post on Make money online for teens. I agree that they do have higher potential in generating income online. Just hope that they don’t give up easily.

      Thanks for dropping by! I wish you all the best and hope you will sevure a health insurance soon 🙂

      Cheers,
      Alex

  2. Kevin says:

    You have a lot of great advise and I hope that the younger generation takes your words seriously. Time goes by so fast that if one doesn’t start early, they may end up with many regrets later on in life.

  3. Keye says:

    Great post! I think I’m on the right track because I invest in my health insurance and in the stock market and not in the latest gadgets.

  4. Kady says:

    Hi,

    I think you website is great with a lot of interesting tips and useful information.
    This post was particularly relevant as I have been hesitating for a while about signing up or not for a health insurance as I am 26 and it is already hard for me to save as much as I would like to…but you’re right I should consider my health as a top priority!
    Thanks for your advice!

    K

    • Alex Y says:

      Hi Kady,

      Thanks for dropping by.
      I have just posted a new insurance article and I think you could have a read. It is on what type on insurance policy one should choose. When it comes to health insurance, it is advisable to engage one as young as possible, where the insurance charges are normally lower as they are based on mortality tables of the insurance companies.
      I hope the post gives you some useful information.

      Regards,
      Alex

  5. Edward says:

    Hi there Alexy,
    Too bad majority of young people think that they are too far from retirement to start managing their finances.
    I’m in my 20s, and many peers I’ve spoken to simply do no have the concept of saving for their future, let alone buying appropriate insurances.
    I totally agree with taking up health insurance while we are still young and the premium is still low. More people have to be aware of this.
    Regards,
    Edward

    • Alex Y says:

      Hi Edward,

      Financial planning and management should start as early as possible. Children pick up far more subtle and powerful messages by following the parents. They learn by watching and listening you. It is therefore, first, the adults need to be aware of the importance to know how to many their money and plan ahead their financial goals.

      Regards,
      Alex

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