If you’ve been on social media enough, and have followed financial tips, then living by the 50/30/20 rule will most definitely help you manage your finances better. However, if you’re young, and willing to learn, there are so numerous rules you could stick to as a habit to ensure your financial security and freedom. Millennials and Gen Z’s have wildly different priorities when it comes to how they like to spend their money, however learning the basics will take you a long way to achieving financial independence.
Budgeting
Spending within your means is one of the best ways to be within your budget. Spending below your means is even better to ensure that you have a safe margin. Knowing where your money goes, and keeping a track of all the big expenses and the little expenses that add up to be big spends will save you from lot of trouble. If grabbing breakfast from a nearby café everyday costs you a big chunk of your earnings by the end of the month, having a budget for it, and spending within that limit will help you curb your expenses.
Investments
Furniture and tech items can be considered as a type of investment especially if you decide to buy them from laybuy stores. Since you won’t be paying interest, paying a portion of it every month, and by the end of the term, you can choose to sell off the item you bought for a newer, better version in the same manner. The plus side is that you will not be sending a big amount all at once – and it will be paid weekly or monthly, and you will barely feel it in your pocket.
Know your Taxes
Having an understanding of how income tax works before you negotiate your salary with your employers will assist you with managing your money better. Once you’re able to understand the portion that goes into taxes, planning your savings, holidays, other main expenses will definitely get easier. Apart from income taxes, knowing other forms of taxes, and how you can get your refunds will also perhaps give you some pleasant surprises!
Save for the Retirement
No one can possibly think of working for someone else, or even working as your own boss for as long as you’re alive. Investing in insurance schemes, buying assets that can give you a steady stream of income are some of the very few options that can help you go into retirement comfortably.
Most millennials think of retiring soon from their nine to five jobs as the workload is too much, and most employees end up with work related mental stress and burnout. To avoid being dependent on one job for your retirement, you can always find multiple streams of income where one can directly go into a retirement fund of choice.
It is crucial to be smart about spending patterns and how you manage your money if you are to live a comfortable and successful life in an ever-changing economy. Constantly upgrading your knowledge and being aware of the market trends and changes, can help you get there faster!
