Last Updated on Mar 30, 2020 by James W


Those in their teens and early twenties we have multiple expenses and dreadfully minimal income. Most of these people, having barely started earning for themselves, struggle to find the perfect balance between the two till a professional financial adviser intervenes. This is primarily because, in our school days we learn how to calculate tax and compounding interest, but very few of us actually get to take classes on personal finance management. And for people with a taste for the finer things in life, the struggle is real.

So here we are, trying to enumerate a few of the management tips which will help us smoothen out our finances with minimum effort-

  1. Jot down all your expenses-

This is a very important first step for everyone who wants to know where most of their money goes. In many cases we end up spending tons on silly things without even realizing. For example, you could be spending $210 or more per month ($7 a pack) if you are a regular smoker. But since we buy one pack at a time the individual cost of a pack does not seem to create a dent in our finances. So it is a rewarding practice to maintain an expense journal and jot down all your finances before going to bed.

2. Set a realistic budget-

Once you have calculated your monthly expenses and categorized them into frugal and unnecessary, the next step would be to budget your expenses. Any young adult should be able to find out the expenses which can be minimized or completely aborted.

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To make a realistic budget you will require a comprehensive summary of all your bills, financial statements and receipt. Categorize them into fixed expenses and variable expenses. Then you can create a simple spreadsheet on your PC or your phone. This will help you live within a budget you have set for yourself; but remember to be as practical as possible while writing the numbers.

Once you try out the budget for a month, you can revisit and change the numbers to better suit your needs.

3. Emergency fund-

We know that none of us like to think of a day when we might be out of jobs and money. But in today’s market that is not something unheard of. So irrespective of your salary, you must stow away some amount for the emergency days. This means besides paying for insurance, college loans and other expenses you should keep depositing money in your expense accounts for the dry days. And if that emergency never arrives, you will soon have money for the down payment of a home, a car, vacation money and of course retirement money!

4. Take care of your health insurance-

Paying your premiums regularly can save you a lot of trouble at the end of a year. Missed premiums attract a lot of fines and bloated payments which create massive dents in student finances. And keeping your insurance straightened out also takes care of those days when your college heydays land you in the emergency rooms more than once. The key to pocket friendly insurance payments is to find insurance providers with amicable premiums. Not all reputed insurance groups may be right for you. So research, compare and interact with the representatives online to get a better idea about their coverage.

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5. Regulate the use of your credit card-

Most of us consider a credit card as the ultimate liberty to shop. However in reality this is an idea incepted by the uber happy credit card adverts. If you are using your credit card to buy anything you will be paying for it for the next 3, 6 or 12 months. So, a part of your future income will be used to pay for your credit card expenses. Also, do not forget that you will be paying exorbitant rates of interest in case your payments for all your credit card purchases. In fact, converting other annuity based income streams, such as structured settlements, into lump sum cash for meeting current needs is a much better option.

6. Learning about investment-

Learning a thing or two about investment is always beneficial for the young adults. This not only lightens the tax load at times, but it also helps to secure a healthy finance for the future. Although it isn’t rocket science, initially you may find yourself in a tizzy in the investment banking world. So it will be a smart first investment to hire professional help to guide you through the maze of stock markets and mutual funds.



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