The age between 20 to 30 is perhaps the best time of one’s life. At this age, life is full of new possibilities, challenges and fun. Amidst all these excitements people often fail to take certain financial decisions which affect them later on. Those mistakes keep on haunting them throughout their life. Let’s have a look at 7 mistakes that young people often make without even knowing them.
- Spending unnecessarily: During this period of life, most of us start earning. We have a certain amount of money at our disposal which provokes us to spend more money. Sometimes unnecessarily. We often buy things that we actually do not need at that point.? Before making any purchase, we should ask ourselves whether we really need it or not. By doing so, we will be able to keep a check on our expenses and increase our savings.?
- Going on without a budget: This is a very common mistake that youngsters often make.? They keep on spending money until the account shows zero balance. As a result, they lack money when they actually need it. If you maintain a budget, you can avoid this problem. By budgeting, you can check your unnecessary expenditure as well as you can have a clear idea about your actual financial situation. By keeping a budget, you can also put more money into your investment purposes.
- No financial goals:? Amidst all the fun and frolic of a young age people often avoids giving a thought to their financial future. They earn money and keep on spending them. As a result, after a certain age when they plan to buy a property or anything of high value, they do not have enough money. So, make a proper financial plan before it’s too late. Fix some goals for yourself that you want to achieve. Keep a certain time frame for each goal. This will help you to increase your investment and you will have enough money at your disposal in the future.?
- Unlimited usage of credit cards: This is actually a very tempting trap for youngsters. Credit card gives you a kind of false sense of freedom to buy anything at any moment. People often buy on credit cards much more than their actual financial ability. Naturally, they fail to pay it on time. Now they start borrowing money to pay their credit card bills and it becomes a never-ending cycle of borrowing and paying off the loan. Never cross your limit while using credit cards.?
- Retirement is far away:? This is the most common mistake among youngsters. In their 20s they think that retirement is far away! But don’t forget that time flies. If you start your retirement investment early you will get more time to grow your money. If you start as early as 25 when you will reach 60 you will be able to accumulate a good deal of corpus.??????
- Avoiding calculated risk:? Any investment is subjected to market risk. If you avoid taking a risk you won’t be able to grow your money and you will be left behind the inflation. Risk is always there. But you can minimize them by proper calculation. By calculated risk you can safeguard your money from losses.?
- Unplanned student loan: Young people often take a student loan to continue their studies, especially to study abroad. There is no harm in it if you plan the loan properly. We often forget the fact that we will have to pay the loan amount back in few years down the line. ?Before taking any education loan consider what your true professional aspirations are and whether the present course will be any help or not.
These are some basic mistakes that youngsters often make because of unawareness and lack of judgment. If they can avoid these in time then their financial future will be safe and secured.??
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