Too often we are too quick to berate the young generation of today for not being smart when it comes to their finances. But, how can we expect these financial fledglings to be smart and good with their money when they are, one, told to do different things in regards to their finances, and two, not given any solid advice on how to deal with their finances correctly?
Whether you are in fact a financial fledgling and need solid advice when it comes to your finances, or whether you are a parent or guardian of a financial fledgling that would like advice on how to advise them in regards to their finances, then make sure to read on.
It’s okay to ask for help
For some bizarre reason everybody seems to grow up thinking that asking for financial assistance is a sin and something that should be avoided at all costs. News flash: this is not the case. It’s okay to ask for help, and all financial fledglings should know this.
First of all, all financial fledglings should know that their loved ones should be the first people they turn to when they are in desperate need of financial assistance. This is because, quite frankly, loved ones are the best people to ask for financial help because they will, one, want to help, two, not put strict repayment deadlines in place, and three, not add any interest to the money they lend. So, if you are a loved one of a financial fledgling, make sure they know that they can always turn to you if they have money troubles. And, even if you can’t financially support them, just make sure they know that you will do all you can to support them in other ways.
What financial fledglings should also know is that it is okay to turn to professional borrowing and lending companies when they are in need of financial assistance, too. Yes, all you fledglings out there, despite all the negative connotations of doing so, it is okay to get an advance on your paycheck from a loan company and then pay the money you borrowed back when you do in fact get paid. But, if you do decide to take this route, just make sure that you can indeed pay the money back by the deadline put in place to do so and that you have the finances to cover the interest added to the loan.
But it’s important to be independent
However, asking for help does not mean and must never mean that financial fledglings are relying too heavily on others when it comes to their finances. Mainly, this means that they should never be relying on their parents or guardians to sort their finances out for them and that they should instead be independent in all aspects in regards to them.
The main reason for this is because if young people are not taught to manage their money independently as early as possible and instead feel that delegating the task to others is more appropriate, somewhere down the line they will find that their money is mismanaged in some way or form. No, this doesn’t mean that a parent is going to bleed their child dry just because they know the pin to their bank account — this means that if young people are conditioned to believe that it is okay to hand over the keys to their financial safe early on, then they will be more inclined to do it later on and the people they hand these keys to later on may not have their best interests at heart. So, if you’re a financial fledgling, take control of your finances! And, if you’re a parent or a guardian of a financial fledgling, take a step back!
Keep a track of all incomings and outgoings
The world of finance is made up of two things: incomings and outgoings. And, one of the soundest pieces of advice that all financial fledglings should hear is that both of these financial aspects should be kept a track of and recorded. If they are not and a tight rein is not kept on them at all times, then things will surely begin to spiral out of control somewhere down the line.
When it comes to tracking incomings, a number of things should be done. Firstly, all financial fledglings should know that every paycheck that they are provided with from work should be filed and stored way in a place that is safe, easy-to-find and memorable. What’s more, check stubs should even be generated that create a carbon copy of these paychecks in order to provide added proof of incomings. They should do this because all of this proof could be vital should disputes arise regarding how much a person is earning, and subsequently how much tax they are paying on said earnings.
And, speaking of tax, that annoyingly necessary outgoing needs to be recorded at all times, too. Simply, all tax payments and charges should be stored away just as paychecks are so that he or she who does the storing can easily find them when the tax man asks to see how much they have paid out alongside their proof of earnings. And, another form of outgoings that should be stored in this manner are invoices and receipts that prove an outgoing transaction has been made. This is because this kind of proof can be prove to be pivotal and decisive when it comes to solving quandaries regarding payment, and quandaries regarding payment should always be sought to be solved as quickly, decisively and easily as possible.
It’s always a good idea to save
No matter age or circumstance, it’s always a good idea to save money. Whether this means putting money into a savings pot that is only delved into on rainy days, or whether this means putting money into a retirement savings fund or pension scheme that cannot be touched until retirement, saving should be taking place.
In regards to the latter, even though their retirement may be forty or even fifty years away, fledglings should be saving for it. Why? Because the earlier retirement saving commences, the more money there will be accrued within their savings pot come retirement. More specifically, young people should be starting their retirement saving as soon as they can because today’s financial landscape dictates that they are in the best position of all the young generations of the past to do so given the way saved money is now growing and accruing interest. And, alongside the speed and strength in which this is happening comes the fact that they very much have a lot of time on their hands to see their savings grow immeasurably.
Specifically, financial fledglings should be contributing their money to a ROTH individual retirement account. This is a special type of IRA that the contributor contributes their hard earned money to alongside their employer and any employers that they may have in the future. The fact that two different peoples are contributing at the same time means this type of IRA has the potential to stack up and save up a boatload of cash that is then ready to be withdrawn tax free upon retirement.
But, it’s not a good idea to earn money and never spend it
The most important thing that financial fledglings can learn about finances is that it is okay to spend it! Seriously, all you financial fledglings out there, it is okay to go out and spend the money that you have worked hard for!
Yes, it is important to save for both rainy days and retirement. And yes, it is important to be spend conscious and not waste money willy nilly constantly. But, it is just as important to enjoy the money you earn. This is because, first and foremost, it makes all those long, hard hours at work seem worthwhile, and that is something everybody needs to feel at some point in the working life. Also, this is because it helps people to realise just what it is in their life that is important enough to spend money on, and it is useful for everybody to know this about their lives. So, fledglings, don’t be afraid to open up your wallet or purse from time to time and spend on things that make you happy. And, all you parents and guardians of fledglings, don’t be too quick to discourage spending!
Of course, there does need to be a limit and little sense when it comes to the spending, but spending is not the root of evil and should never be treated as such.
So, there you have it: a comprehensive breakdown of everything the financial fledglings of today should know about the world of finance. If you are a fledgling, or if you are somebody who a fledgling looks up to, remember to take heed of the advice above and put it into practice today in order to protect the financial futures of tomorrow.
And if you are a financial fledgling that is also interested in launching your own business, then make sure to check out this helpful article on doing so.