One moment, you’re young and carefree, and the next, you’re wondering how you will buy a house and afford retirement! Money management is no easy task, and it’s even trickier when you’ve never done it before. Below are top wealth tips for better money management skills and personal wealth.
Credit Cards are Safer Than Debit Cards, But Come with Spending Risks
Everyone knows that premium credit cards can be excellent for building credit scores, obtaining exclusive discounts, and providing protection from unauthorized transactions. However, using a credit card to pay for everything if you want can also provide you with a front-row seat to your very own spiraling debt show.
Using credit cards to pay for everything doesn’t encourage self-control or support good budgeting. Interest is expensive, and you’ll spend more time paying it back than paying down the debt. If you miss installment payments, you risk ruining your credit score. One of the best wealth tips is to save until you can afford what you want/need or adopt an “if I can’t afford it, I can’t get it” approach.
Start An Emergency Fund
You may not have an emergency or unexpected expenses now and feel stashing money is a waste, but wait until that emergency crops up. Instead of taking a chunk out of your already stretched budget, you have a few hundred bucks to help you out.
Avoid Debt As Far As Possible
That cute dress in the store, the latest iPhone on contract, and buying the car you want instead of a more basic model lead to debt. Debt hangs around for a long time, often longer than the item you’ve bought.
Even if you are in debt, try making an additional payment of at least 10% of your current EMI to close your loans faster and save a lot in your interest portion – please rephrase as required.
Future Planning Is Critical
One day, you may want to buy a house, have children, start a business, go on holiday, or retire. Coming up with the money will prove difficult. Having investment goals, savings goals (money isn’t earning interest if it’s sitting in a savings account), and a monthly budget are ways to future plan and ensure you have retirement money.
Build Your Credit Score Early-On
Excellent credit opens doors for you in the future. When you need a mortgage, for instance, your credit score will play a role in the rates you receive.
- Open a secured credit card. As you use the card, transactions are reported to the bureaus, helping you develop good credit.
- Get a student credit card. However, only use a small portion of the credit available and always pay bills on time – this will be reported to the credit bureaus.
- Take advantage of collaborative branded credit cards – a great example of this is the Citibank British Airways card that allows individuals to earn points and travel miles, thus helping save on the cost of air tickets.
For more top wealth tips for young adults, visit the Nour Private Wealth website! Our team provides expert investment planning, wealth planning, and other financial services in Canada.
Contact us today to discuss how to manage your money better and develop a personalized wealth management plan.
