Guestpost by Katheryn Rivas
Personal finance is one of those things that is typically at the back of any college student or 20 something's mind. Often pigeonholed as the self-indulgent and self-involved generation, the youth generation of today can no doubt use a tip or two in strong saving habits (as can the rest of us).
Interestingly, recent studies have produced some surprising statistics—millennials (20 somethings) are actually very careful and smart with their savings. Personal finance is an essential aspect to becoming an adult and functioning successfully in the "real" world. While experts suggest that today's youngsters are actually more financially responsible and aware than their parents, most of us can still use some educated guidance with our saving habits.
Habit One: Know Your Spending
One of the most useful and effective tips for spending and saving money wisely is gaining a true understanding of your money habits. For the money-clueless or even the money-wary, research is the place to start with personal finance planning.
Take notes of your spending and saving habits before you attempt to change them. Observe how and where you spend your money. For a month, track your saving and spending. How much do you spend on gas? How much do you spend on groceries? What stores do you shop at most? How much money do you put into savings? How much money do you actually make in a month? Delineate your spending habits into necessity and non-necessity item categories. Having a month-long overview of your general spending habits will help you to see what areas need improvement and what areas you are successful with.
Habit Two: Set Reachable Goals
Goal-setting is another extremely important aspect of successful money saving. Now that you have a clear vantage point on how you spend and save your money, you can begin to construct money-saving goals.
It is essential that you set goals that are both attainable and productive. Don't set goals that you know you can easily meet, but also do not set goals that are so far-reaching, you're bound to fail. This can be a difficult line to walk.
First, define the goal for yourself. Figure out how frugal you want to be and how that will work with your lifestyle. Is it your priority to pay off all debt in your name? Do you want to build a savings account balance? Once you carefully define a goal that makes sense for your specific situation, draw a budget to help you get there. This budget is a part of your goal plan. Look at your spending habits and pick specific areas that you can improve on. Writing out specific small goals that will help you meet your overarching finance goal will help you to stay on track of your spending and visualize the outcome.
Habit Three: Think Ahead
Before you can really be successful with your money-saving plans, you have to know where your priorities lie. Evaluate why you are looking to change your money habits. Thinking ahead is an extremely responsible and wise thing that young people can do with their expenses. Though 401ks and retirement days are the last thing college students and young professionals are thinking of, it is extremely important to plan for these things early.
Take the time to sit down and think about you at age 55 and retired. What can you do today to help make that time of your life easier? At the very least, educate yourself on retirement basics. Learn about retirement plans and IRA accounts. Simply becoming better educated on these topics can help prepare you for the future. Part of responsibly managing your money situation now is thinking about your money situation in the future.
About the Author:
This guest post is contributed by Katheryn Rivas, who writes for online universities blog. She welcomes your comments at her email Id: email@example.com.