Young adults believe that money is the thing that stresses them out the most. Indeed, financial worries have become a common occurrence in a society where, unfortunately, everything has gone up in price. Indeed, students nowadays face a considerable amount of debt from a young age – Canadian students owe $28 billion in government loans. However, scroll back a few generations ago, and their parents or grandparents didn’t have to deal with the same level of university costs. For many, the first worry when they land their first post-graduate job is to manage their finances back to health. Unfortunately, expenses don’t stop when you leave college. Many of today’s essentials come at a cost, from a vehicle to the indispensable smartphone and laptop – which are an integral part of everyday life. As such, it’s not uncommon for young adults to develop financial anxiety. There is no way around; dealing with money worries requires a plan.
#1. Yes, There Are Ways To Make Money
First of all, there is more than one way to build capital. In fact, young professionals and students have access to some of the best methods to earn money online. Indeed, from answering online surveys to playing video games – professional gamers are paid for their contributions. While you’re unlikely to wake up a millionaire after a few clicks online, you can build a supplemental income.
#2. But It’s Useless Unless You Know How To Manage It
Admittedly, even when you build a regular source of income through online methods, it’s unlikely to have any lasting positive if you are unsure how to manage your finances. The first and most crucial step in finance management is to understand your income. As a post student or a young professional, you are about to discover that your actual salary is nothing like your take-home pay. Taxes apply to your wages, meaning that you need to budget for all essential expenses.
#3. The Eternal Saving vs Investing Dilemma
You can’t grow your wealth without smart investments. However, for many newcomers to the investment world, there’s an ongoing battle between the saving and investing pots. Ideally, you need to be able to do a little of both. It’s never a good idea to start investing before you define a saving plan. Saving acts as the foundation upon which you build your finances. A rule of thumb is to save enough to cover all your expenses for at least 6 months before you start investing.
#4. Start The Journey With A Debt Recovery Plan
Finally, your first focus out of university is to tackle your student debt. Debt recovery is a long and painful process that essentially needs you to place your debt repayment as a regular expense. It can feel demotivating to stop yourself from committing to substantial purchases because you need the money to repay your debt, but in the long term, a little financial discipline can go a long way.
Bad finances are as common as they are stressful for young adults. Developing a strategy to tackle issues while growing your wealth demands a lot of work and dedication. However, you have to consider the breadth of benefits your hard work can deliver, from stable finances to your peace of mind.