Money makes the world go ‘round. That’s what a lot of people seem to think, and frankly, there is some truth to it. Money is a necessity unless you are willing and able to find a place where you can simply live off the land. Chances are good that you’ll have to buy the place, however! Since money is something we all need, it helps to know a little bit about it. Money and how it is managed will make a huge impact on your life, so take a little time to consider the following.
#1 Stuff
There are many people in the world that seem as if their lives have been hijacked by their obsession with “stuff.” It could be clothes, electronics, cars or any number of things, and spending money on too much of that stuff is a good way to go broke. There will be time for more stuff in the future, so concentrate on saving for the things you really want, like your own home.
#2 Mortgages
While we’re on the subject of homes, consider mortgages. There are many options available these days but you are better off sticking with a 15-year fixed rate mortgage. 30 years is a long time, and it will seem even longer when you have to make that big mortgage payment every month. Sure, payments might be a bit higher for a 15-year mortgage, but you’ll thank yourself 15 years down the road when most of your friends are still facing another 15 years of mortgage payments.
#3 Relationships
Fights about money are one of the most common things married couples fight about. Make sure your financial goals match well with those of your future spouse or you could be headed down a very bumpy road.
#4 Credit cards
Credit cards have their uses, but they should be very limited. When it comes to those big-ticket items you really want, you are far better off being patient and saving up for something. It’s easy to convince yourself that you’ll be making more money in the future and be able to pay them off, but most of the time that’s just wishful thinking. Sending in the “minimum payment” every month to pay off credit cards will likely take much longer than you think and most of what you will be paying back will be interest that goes straight into the credit card company’s pocket.
#5 Cars
These days you would think that everyone was taught that to be successful in life, you must have a $500-per-month car payment. The reality of the situation is that you do not need a new car. There is not a shortage of reliable used cars on the market that will serve you well until it makes more sense to think about brand-new cars.
#6 Have a budget
Planning ahead is something you can do that will help keep you from falling behind. Unless you inherited tons of money or were lucky enough to win the lottery, you must live within your means. Having a budget and sticking to it will enable you to keep the bills paid.
#7 Say “No”
This goes hand-in-hand with budgeting. Sure, it would be great to try that new restaurant in town or spend a couple of nights in a nice motel by the beach, but if you haven’t budgeted for it, don’t do it. It’s OK to tell your friends you can’t afford to go out to eat. If it’s something that’s important to you, it’s time to add a new item to the budget and start saving.
#8 Retirement
It may seem like it’s light-years in the future at the moment, but you’ll be shocked how fast the time passed by when you get there! Start saving for retirement now. You cannot be 100 percent certain that safety nets like social security or a pension plan will actually be there when you need it. Protect yourself by saving for retirement and let that interest start working on building your nest egg now.
#9 Meals
Everyone knows it’s a lot easier just to fork over a few bucks and get lunch at the cafeteria at work or at the pizza place down the street. Brown-bagging it isn’t nearly as fun, and usually not as tasty, but take a few minutes to add up all the money you spend on lunches or a take-out dinners after work and you’ll probably be surprised how much it is costing you.
#10 Payday loans
This one is real simple: Don’t do it. Ever!
#11 Listen
It’s funny how when you are a teenager you think your parents are the dumbest people on earth. By the time you are 30, you realize how smart they got in the last 10 years or so. Parents have been through a lot of the same things you are going through and have probably learned a lot in the process. Seek their advice. In most cases, they’ll steer you in the right direction.
#12 Get rich slow
If you’ve got that burning desire to be rich some day, don’t fall for get-rich-quick schemes. They almost always fail. Persistence, patience, and hard work are what you need to realize your goals.