As I approach the beginning of my adult life, I’ve been reflecting on some of the most important lessons I’ve learned and what I would’ve loved to tell my younger self. What I wish I had learned the most is what I know now about managing my finances. I’m going to go through some of the most important financial practices in my life and discuss how I apply them every day. For anyone who wishes they were taught how to manage their money, these five lessons can help you feel more confident in your money management skills and help set yourself up for financial success.
1. IT’S OKAY TO SPEND YOUR MONEY
One of the biggest hurdles I’ve had to face was learning that it’s okay to spend your money. Growing up in an immigrant family definitely teaches you about the value of money as well as some great money-saving hacks, but this environment can also bring about financial anxiety. I’ve always been nervous about making purchases and the dent that it would leave in my bank account — no matter how small the purchase. Whether you’re like me or just a money-saver to your core, it’s important to know that money is meant to be spent. Saving your money is important but it’s also essential to prioritize your wants and needs. For me, small things like buying a coffee or a matcha latte can make my day. Learning to treat yourself without feeling guilty can be difficult but is something that you eventually overcome as long as you find a balance between saving and spending.
2. TAKE THE TIME TO LEARN ABOUT INVESTING YOUR MONEY
I have never taken a business class in my life and always felt like I knew so little about managing my money. So when I first started university, I made it a goal to learn a bit more about investing. After doing some quick Google searches, reading some articles, and visiting my bank, I was able to get myself started with some investment accounts. The idea of investing can seem intimidating, but what I didn’t know was that it doesn’t require getting a business degree to learn how to invest. Taking the time to read a bit about what kind of investments you can make is definitely worthwhile and is not as complicated as it may seem. So, for yourself and your future, do some light reading or even talk to some people and learn about what you can do with your money.
3. FIGURE OUT YOUR MONEY PRIORITIES
Everyone has different financial priorities—for example, some enjoy traveling and others prioritize eating-out. Figuring out your top 3 money priorities is important so you can learn where to spend your money and where to save it. One of my priorities is travel because, for me, adventure and experiences are something I believe to be very important in my life. So, when it comes to spending money I will focus on what I need and make sure to keep in the back of my mind that I want to save up to travel. Once you identify your top 3 priorities it makes it easier to draw the line between spending money on things you might regret and those that you won’t.
4. MAKE BUDGET PLANS ACCORDING TO YOUR “MONEY PERSONALITY”
Something really interesting that I recently learned was that a person’s spending habits can actually reflect their personality traits. Understanding your money personality can offer valuable insights into your personal spending habits, shedding light on other factors that may influence your financial choices. To learn about your money personality take this quick quiz. After learning about your personality type you can create better budget plans according to your spending habits. For example, my personality type is the “Saver” which is said to potentially neglect needs or wants, and at times have difficulty sharing or spending money. Therefore, when making budget plans I can understand my habits and learn to allocate more spending on things that I enjoy.
5. IT’S NEVER TOO EARLY TO START PLANNING FOR YOUR FUTURE GOALS
Right now, you might be more concerned about covering utilities rather than saving for a house. Even though I am still very young, I have big financial goals, like buying a house or establishing a retirement fund, and it’s important to recognize that it’s never too early to lay the groundwork for them. Planning for your financial future now can give you more flexibility down the road and a little more confidence from knowing what to do for the future. Even if you don’t start saving now, it’s important to think about what things you may want and how you will go about saving for them. Whether you take the time to learn about loans or create a savings account, taking these steps can put you five steps ahead when your goals become reality.
Thinking about money can be overwhelming, especially when you feel like you don’t know anything about managing it. Hopefully, some of these insights can help you feel more confident in your financial journey. The more you learn, the more you earn!