According to a survey from Bankrate, just 40 percent of Americans could pay an unexpected $1,000 expense, such as an emergency room visit or car repair, with their savings.
Hence, this post focuses on simple financial tips to help young adults control money better.
Growing up isn’t as fun as we thought it was going to be. At this rate, it seems we were all deceived!
Bills and More Bills! Every Damn Month!
Now if the rent isn’t paid there’s an embarrassing eviction notice on your door for you, your neighbors, and the UPS driver to see.
If the bills are not paid, the debt collectors will drive you nuts to the point you wish you didn’t purchase that insanely priced iPhone or android you couldn’t afford anyway.
Overall, These Bills Don’t Take A Day Off So You Can Breathe
Now let’s talk about your car payments and maintenance.
For instance, if you’re struggling to make car payments on time and fill the gas tank soon, you might have no choice but to take the bus.
Numbers Don’t Lie … Well Debatable … Or Let’s Agree To Disagree
Sadly, the situation becomes grim when you add some data to the mix.
According to MovingApts.com, the average monthly expenses of an American in 2018 were $5,102.
Yes, $5,102 (annual $61,224)! Crazy! Especially when the median household annual income was $63,179 in 2018 according to the Census Bureau.
Unfortunately, over 75 percent of $5,102 according to MovingApts.com, was allocated to housing, transportation, personal insurance, health care, and groceries.
So what’s one to do when over 75 percent of their income pays for just a fraction of basic living expenses if they’re lucky?
Well, maybe move in with parents, shack up or move in with friends to split the bills?
So Life Is Rough So What?
So, what right? But … really …
Life is rough out here! In fact, it’s so rough, second-hand embarrassment isn’t a thing because we’re in this together.
So how’s that adult life going? What about all that freedom?
Our parents are catching a good laugh right about now and shouting from the rooftops, “we told you all so”!
Freedom, oh glorious freedom! So much for that glorious freedom, we lust after during our childhood.
We thought it would be cool having our own place and no longer be obligated to follow our parent’s rules.
However, some of us failed to consider the personal responsibility of having our own place, which includes paying our own bills.
But hey, adulthood isn’t all bad, especially when you cast the bills aside for a minute or two!
Actually, being an adult isn’t bad – it’s a blessing!
Yes, a blessing, especially when you learn how to live on less by sticking to a realistic budget, saving, and investing as much money as you can.
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Here are some Simple Financial Tips To Help Young Adults Control Money Better
- Don’t give in to peer pressure by trying to keep up with the Joneses
- Use cash to avoid the debt trap
- Stay healthy because health is wealth
- Learn how to make short-term sacrifices for long-term gains
- Tell your money where to go
- Choose financial sanity and financial freedom
- Believe you can win with money and act upon it
1. Don’t Give in to Peer Pressure by trying to keep up with the Joneses
Word on the street is the Joneses can’t keep either, so don’t even bother.
Instead, consider staying in your own lane because your blessing is around the corner, and it’s all yours for the taking!
So What About Social Media … You Know, the Fake It Till You Make It Situation …
Unfortunately, it is easy to fake it on social media while struggling in real life, which encourages other impressionable young adults to do the same.
Overall, there’s nothing wrong with wanting to be successful. What’s wrong is the unwillingness to put in the time and work to actually become successful.
Fortunately, if you can overcome the temptation of faking on social media to keep up with the Joneses you have a fighting chance of actually improving your financial situation.
2. Use cash to avoid the debt trap
In general, if you can’t afford to pay for an item in cash, you probably can’t afford to own it.
However, in a capitalistic system where paying for goods and services using credit is highly encouraged, this statement is usually frowned upon.
Regardless, cash is king, and having the ability to pay for goods and services in cash helps you control money better.
In fact, using cash instead of credit financially empowers.
How though? …
Well, paying for goods and services in cash now gives you the power to freely allocate your future earnings without having to worry about keeping up with due payments for past transactions you probably no longer care about.
Now, this argument gets heated when a vehicle or house purchase is in question.
However, regarding a vehicle purchase, it isn’t difficult to find a better alternative other than financing the vehicle.
For instance, if you can’t afford a new vehicle paid in cash, then consider paying cash for a certified used vehicle instead.
Buying A Vehicle Is One Thing, But Buying A House …
Things can get a little more complicated. However, buying a house you can actually afford, and delaying the purchasing decision until you are financially able to do so, can simplify things a bit.
The Opportunity Costs Of Cash
In both buying scenarios, the opportunity costs of cash can’t be ignored.
In fact, this is especially true when making a huge cash purchase, like buying a house, when interest rates are very low.
The dilemma …. Buy A House in Cash Or Finance the House and Invest The Cash
For instance, allocating the same funds in the stock market for a higher rate of returns and choosing to finance the house with a low-interest rate can help the homeowner have the best of both worlds.
However, nothing is guaranteed. What if the stocks purchased on the stock market lose value that can’t be recovered at all?
Example: Enron in 2001 and Chesapeake Energy in 2020
What if the homeowner’s health is negatively affected, they can no longer work, and they have no passive income?
Who pays the mortgage, utilities, house insurance, property tax that never goes away unless the house is sold, house maintenance, and more?
Overall, it’s a toss-up.
However, in general paying for goods and services using cash allows you to control money better, and gives you peace of mind and financial freedom and all three benefits are priceless.
3. Stay Healthy Because Health Is Wealth
One of the best ways to save money is to avoid medical bills.
Yes, avoid medical bills by any means necessary, even if you have medical insurance! These suckers are almost as bad as your student loans.
Staying healthy gives you the freedom to explore more options to build wealth and most importantly, helps you reduce the chance of incurring substantial medical bills.
4. Learn How to make short-term sacrifices for long-term gains
Budgeting money for young adults can be tough, especially when income is low and there’s a lack of discipline or lack of financial responsibility.
However, with a strong goal, practice, and strong will, budgeting money becomes easier over time.
Overall, even if budgeting money may seem difficult and or boring, think long-term.
Plus, the sooner you learn how to control money by making short-term sacrifices, the better off you will be in the long term financially.
So start today – your future self will thank you!
Related Post: Smart Ways To Save Money
5. Tell your money where to go
Yes! Start telling your money where to go! Controlled money is money with a purpose.
So, like a boss, start telling your money where to go every month.
After all, you’re the one working for it, so why should external parties dictate where your hard-working coins go before you have a say so?
Don’t you feel disrespect? This can’t continue. No way! In fact, it’s time to change the game.
Start by creating a plan for your money. The plan doesn’t have to be complicated. In fact, it’s better if you keep it simple.
This budget tracker helps you keep track of the inflow of your cash, and outflow of your cash.
So, let this budget tracker help you tell your money where to go.
If you need extra space to track your expenses, use this expense tracker. This expense tracker is spacious, plus it’s customizable.
6. Choose Financial Sanity and Financial Freedom
Life is hard, unfair, and full of messy situations. However, there’s always a chance for you to turn things around.
You can choose to do something about your situation or go with the flow. However, why go with the flow when your financial future is at risk?
Instead, choose financial sanity and financial freedom, by taking responsibility for your financial future now or be prepared for life to become harder.
7. Believe you can win with money and act upon it
If you believe, you can achieve it, right? Well, yeah, but no. Actually, believing alone with no action is pointless.
You don’t want to be the person who believes they are the best fisherman but won’t even go to the pond.
Like, really, what’s the point of your belief if you won’t even act upon it?
Unfortunately, just wanting something doesn’t give you the right to it unless you act upon it!
Imagine, even the wealthiest people have to make a call or tell someone to get what they want, but even then it could still be out of their reach.
Instead, start with a strong personal reason why you must win with money.
Then believe or trust in your abilities. Then act upon it through planning, execution, and timely review detailing the outcome and ways to improve.