Financial Literacy is always a positive prospect to add to the skillset of youths. It teaches them to have patience, invest in the right thing, avoid unnecessary superficial fun, and adds a vital management view to their life. Learning to manage in a precise way in an early stage of life will lead to a managed career in the future. Many people would not bother to think about finances in their late teens and early 20s. Having financial knowledge is crucial for youth to navigate the complexities of the modern financial environment and secure their financial future. Ironically, the earlier you start, the easier it will be for you. If nothing, you have time on your side. “Let me enjoy life first! I still have my whole life ahead of me!” would be the likely motto. It is never too late to start, though.
There are essential key points to look out for in financial management.
- Make a Plan – Look out for your actual needs and goals. Ask yourself what the big things are that you want. Divide them into short-term, medium-term, and long-term goals. Figure out how much you need for each and plan henceforth. If you just fritter your money away in not so useful things that just means you will have to work harder and longer when you have something important to save for.
- Follow The 50-30-20 Principle – Out of the total pocket money or monthly earnings, one should spend 50% on necessity, necessity means the basic survival accessories which cannot be avoided like bills, food, rent; 30% on wants, wants are something that we can live without while the remaining 20% should be our savings. More income does not equate to more savings, it can also lead to more spending. Saving is important if you want to buy the things that you want, and to do the things that you want, such as going travelling or sightseeing.
- Look for Discounts Flash out your student ID card when you are spending. You might be surprised to explore many shops and services that will be offering exciting discount offers for students. Going in cable cars, national parks, zoos, museum, historical and cultural sites, also in public transport and any other areas, being a student always has discounts on offered. Therefore, it is wise to look out and research on the discount opportunities available to some valuable penny.
- Understanding the Magic of Compounding Compound interest – often known as the eighth wonder of the world. Answer this trick question: “Would you rather have $10,000 per day for 30 days or a penny that doubled in value every day for 30 days?” Today, we know to choose the doubling penny, because, at the end of 30 days, we’d have about $5 million versus the $300,000 we’d have if we chose $10,000 per day. To use the compound interest most effectively, you should start investing early, invest as much as possible, and attempt to earn a reasonable rate of return.
- Small Learnings Brings Big Earnings – Learn any skills that suit your interest and make it a part time source of earnings. The sooner you start, the better you become. And even if you are yet to begin, it’s never too late to do so. Photography, Video editing, Graphic Designing, Event managing, freelancing, game streaming, online riding platforms, social media influencer, showcasing art forms are just some of the options in today’s world for earning a decent income even as a student. Many youths in recent times have earned good income from bounty hacking as well, it is just a combination of your interest matching up with your desire to learn. The sooner you earn, the wiser you become. Therefore, always try to come up with adding in skill into your life that can lead you to earning good money to sustain your needs.
- Be ethical and avoid Shortcuts – There will be times when you will come across several illegal methods of earning quick money, but you need to have wise intellect and avoid such things as online betting, illegal trading, mining and so on. Several cases of teenagers misusing family money in betting and trading activities have resulted in mental depression, family violence and other social issues that are dangerous.
Money management is an important life skill. This is something that can be taught more in school too. Having good financial knowledge in the early days of life is always a boon. Every youth must be responsible for money usage and take pride in successful management. It teaches the art of being authoritative that helps in future decision making and leadership building. Therefore, everyone must take the first step to make the most of their finances. The first step is always the hardest step, but once that is done, it becomes a lot easier. The small steps and changes matter the most.