The overall situation in the world economy, where most of the countries are struggling with tremendous national debts, unemployment rates go up, prices rise and the inflation increases, prompts us the importance of financial education and planning. The modern young generation should learn to manage their personal finances effectively from early years. The reality is yet the opposite: lots of young people admit they are unable to manage their own budget and tend to depend on parents longer than it was earlier. Most people spend more than earn and that leads them to the debt trap which has long term consequences and makes life more difficult in their 30’s and 40’s.
Not to get into financial difficulties in future the young people in their twenties should accept responsibility and start reasonable planning, they should also take measures to prevent financial mistakes and work hard for the financially secured future.
We’d like to share some of the methodsof achieving financial stability:
1) Avoid credit card debt: In the United States of America credit card debt is the major part of the national debt. The fact that credit cards are so popular is easy to explain: the competition in the market makes many companies provide credit cards to the consumers without any credit score checking. A lot of Americans prefer card payments or online money borrowing service but fail than to cover the overdue amount. That is the very reason which leads to increasing interest rates charged for each amount missed to pay back. The situation becomes even more complicated if you are a shopping freak spending a lot through your credit card. It’s the very right time to stop it.
If you are burdened already with a debt of such kind, speak to your creditor; find out the ways to make your interest rate more affordable and your repayment plan more reasonable. Follow our advice and save yourself from hundreds and thousands of dollars overpayment due to your interest rate.
2) Set up retirement savings: Saving means for your retirement and proper planning for future is a wonderful way to secure your tomorrow, when you are still 25. Effective methods of saving money and getting some additional income through compound interest gained are 401(k) and IRAs accounts. Their additional advantage is being tax free, which allows you to withdraw your saved means later on to enjoy more on your returns.
3) Set up an emergency fund: Unfortunately the situation on the job market is rather unstable and to make a certain financial cushion for emergency cases is a wise step. You can do it on monthly basis or once a year, in the beginning, planning your expenses for the coming period, anyway saving account can be of great help if financial difficulties set in.
This advice can be not attractive to many of spendthrifts who are reluctant to make savings, yet emergency accounts can help you keep afloat for a certain period of time even if the job has been lost, some medical emergency or temporary disability faced. It will prevent you from borrowing and debt accumulating, so think it over.
4) Buy health insurance to avoid unexpected medical expenses: it’s true that medical insurance can cost quite a sensitive amount, yet medical emergency can sometimes bring you to ruin if the policy is missing. Do your best to work harder, but to make even little payments to your health insurance premium it can really save you a fortune later on if you need to pay for medical treatment and it will save you from borrowing and getting into debt.
5) Make your living building a career: The question how to make your life financially secure may be quite a bothering one at the age of 25, everyone seeks stability. In spite of the fact that there are many challenges to face for young people such as lesser job opportunities, growing costs and increasing personal debt, the availability of more resources at present can definitely help the representatives of young generation find the methods of earning a decent amount of money still in their twenties as well as help them to make savings for future retired life.