Money principles for under 30’s

PRINCIPLE #1 – PAY OFF YOUR DEBT

It cannot be emphasized enough: unless you are temporarily ill, you shouldn’t be accumulating debt. You should be paying it off and saving for your future. The successful know and practice this.

PRINCIPLE #2 – START SAVING EARLY

Start saving early. Investing £10,000 at age 27 will yield you much more in retirement than £10,000 invested at age 50. A simple practise I used to build the habit of saving was to start off saving 1% of my income and increase the percentage monthly by 1% that way I was able to build saving into a habit without feeling the pressure of saving.

PRINCIPLE #3 – AVOID PUTTING YOURSELF IN A RISKY FINANCIAL SITUATION

The successful know that some risk is unavoidable, but where it is avoidable, it should be dealt with intelligently. If you are constantly putting yourself in risky money situations, it may be time to rethink your finances and your approach to money.

PRINCIPLE #4 – DON’T DRIVE YOURSELF INTO THE GROUND

We all go through hard times in our lives where the money isn’t flowing. But when this is the case, you must cut back and live simply. Don’t drive yourself into the ground financially, as the consequences are likely to manifest well into the future.

PRINCIPLE #5 – KEEP TRACK OF YOUR FINANCES

Instead of hoping that your finances will work themselves out, play a role in shaping your financial future by keeping track of everything in a spreadsheet. This is often the difference between success and failure in personal finance.

PRINCIPLE #6 – MAKE AN EFFORT TO CUT YOUR EXPENSES

If your expenses are too high, then cut them. Buy a cheaper car or try not to go out as much. Look for sale items at the shops instead of buying them full price. Use vouchers (voucher cloud is a good app to download). Cut back on entertainment expenses.

PRINCIPLE #7 – TRY TO CUT YOUR SPENDING BY 10% PER MONTH

If you’re currently over-budget, consider cutting your expenses by 10%. Even if it seems hard to do initially, figure it out and do it. Make sure you try to save the amount you have cut.

PRINCIPLE #8 – PAY YOUR BILLS ON TIME

When you miss a bill, you get charged fees. So, instead of paying your bills late, pay them first. If you have money left over, then use it for other purposes, but don’t do so until you have paid the bills. This will help build your credit score also.

PRINCIPLE #9 – SET FINANCIAL GOALS

Don’t just dream about your finances getting better. Set money goals and commit yourself to accomplishing them. This will keep you on track with your finances; and will give you something to look forward to. I do monthly money goals and increase the amount every month. However I increase it by an amount I could comfortably achieve.

PRINCIPLE #10 – INVEST IN YOUR CAREER & LEARNING

Just like any other investment, an investment in your career & learning will pay off considerably down the line. If you are currently missing the education or the training that you need to move forward in your career, then put some money aside to invest in your career. I have a monthly brain budget that helps me increase my knowledge and eventually always increase my income.

By Derrick Tchie

Twitter: @Derricktchie

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The Move

Next edition: Monday 12th September

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