Or if the biggest challenges of becoming an adult is dealing with all of the finance that comes with it. We are never prepared throughout school to learn about rent, mortgages and debt… and suddenly we are thrust into a world where all of these things are common place. If you are a young adult and you need some advice with money, here are some of the biggest traps you have to avoid.
Not knowing where your money goes
At the end of the month do you spend some time going through your bank statement to make sure everything is in order? No? Well then, there’s issue number one. How can you know what you are paying out each month if you never check it? You could be spending through the nose on direct debits or even spending more than you earn and you could be none the wiser for it. Make sure to always take time to sit down and look at your bank account.
Not paying attention to your credit score
Your credit score is a number which will tell lenders whether or not you can be trusted to pay back a loan if they give you one. You need to be aware of your credit score and the things which can affect it. Ask yourself, how long do collections stay on your credit report? Will your debt send it crashing down? Can you think about buying a house? Make sure to always keep an eye on upri credit score and if it is low, find a way to increase it.
Buying a house you can’t afford
It is always important as a person that you keep a close eye on what you can afford and only make purchases you know that you can manage with comfortably. A house is the biggest investment you will ever make and you will need more than just the deposit and solicitor fees to afford it. Make sure you earn enough each month to cover your mortgage, bills, food and everything else in your lifestyle. If you aren’t able to do that yet, wait for a while.
Relying on credit cards for emergencies
Credit cards should never be used as anything more than a convenient way to pay. If you can’t afford something, don’t take out a credit card because you’ll be stuck with a debt you can’t pay back. If you aren’t stable with your income yet just stick with the rule of having a debit card and nothing else.
Not having goals
What do you want in life? If you don’t have anything to strive for such as buying a car, a house or having a family, you will never be motivated to save up. Make sure you set yourself goals that you want to achieve in life and these will carry you through the years and allow you to be where you want to be in life. It is so much easier to keep on track of your life when you know where it is heading, and your finances will benefit from it.