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Top 10 financial tips you would give your younger self

Top 10 financial tips you would give your younger self

There is a common saying that money can’t buy happiness, and while this is true in some respects, it can nevertheless make a positive difference. Many have made costly mistakes in their time that they wish they could change and although it’s impossible to change the past, it is possible to try and prevent others from making those same mistakes. Consequently, if time travel were an option here are 10 important pieces of financial advice to give to your younger self.


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1. Save as soon as possible

The following advice is often repeated but all too often not heeded: do not wait to start putting money aside for the future. It really does pay to save and the earlier you start the better. You might not be able to save much at the beginning, but small and regular contributions can build into a significant pot over time. Not only this, your savings could also pay for important events later in your life: such as your retirement, children’s education or wedding day.


Keep debt to a minimum and always pay it off

2. Keep debt to a minimum and always pay it off

The 2 types of debt you could accumulate are categorised as good debt and bad debt. An investment that could improve your long-term wealth is seen as ‘good’ debt – such as university student loans or mortgages. On the other hand, purchases - such as cars, designer clothing and phones - are bad debt because they will depreciate in value. Some debt therefore is worth taking on but both types limit your financial freedom. Consequently, you should keep debt to a minimum and work out a payment plan to pay it off as soon as possible.


Exxon

3. Don’t overindulge on luxuries

Spoiling yourself is acceptable as long as you are spending within your means. One of the best financial habits you can adopt is discipline because this helps you avoid buying every luxury that catches your eye. There are some obvious tell-tale signs that you might be overspending, including having little to no savings, carrying a balance on your credit card or having a negative net worth. If you want to avoid living from pay cheque to pay cheque then never spend more than what you earn.


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4. Have a budget

Having a budget helps you keep a handle on the money you spend, but it’s especially important if you find your outgoings outstripping your income. A regular review of expenses should highlight where you can cut costs, and whilst essential expenses - like rent, utility bills and food – can’t be sacrificed, you can try to keep them as low as possible. You’ll also find manageable changes – like cutting down on takeaways or online shopping – can have a big impact in the long run. With hard work and dedication, you will in time have sufficient funds to live without the pressure of spiralling into debt.


Pfizer

5. Plan for your future

Thinking about where you might be later in life can be daunting, but your future self will thank you for the consideration. Pinpointing what you want to have – like being married with kids in 5 years - can create unnecessary pressure on yourself. Instead, make baseline assumptions of what you will have – like a home - and see how much more you can account for. In particular, one thing you must prepare for is retirement. It might seem like a long way off but it’s never too soon to start contributing towards this massive future expense.


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6. Start an emergency fund

Sometimes life can take an unexpected turn and leave you facing financial hardship. It’s therefore only practical to have a rainy day fund to help handle these stressful situations - then even if you don’t run into trouble these funds could still count towards your long-term savings. Opening a savings account will protect your money from inflation and having it out of your immediate reach means you won’t be able to dip into these savings on a whim – even if you’re tempted to.


Pepsico

7. Learn about your taxes

Every country has its own tax system which means you should familiarise yourself with the one in which you are domiciled as well as those where you hold money or assets. Also considerable changes to your wealth - like a salary increase - could be subject to different taxes, so your take-home could actually be less than you think. It’s important to get a grip on your taxes to ensure you are paying the right amount and still have enough money after tax deductions to afford the cost of living and your financial goals.


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8. Look after your health

Looking after your physical and mental health really does have an impact on your savings. With this in mind ask yourself; could you adopt a healthier lifestyle? Maybe try walking instead of driving to a destination, reducing your alcohol consumption or cutting back on foods that are high in saturated fat. Moreover, affordable public healthcare may not be available where you are, and if this is the case you’ll need to consider extra medical and health insurance cover. Remember that all aspects of your lifestyle will be looked at; meaning the premiums you pay will depend on your health and wellness.


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9. Grow your wealth

If you’re in a position to do so, investing in stocks is one means of securing your long-term financial security. The world of investing however can be difficult to navigate - even for the most experienced investors. You’ll need to know exactly what you’re saving for, how much risk you’re willing to take on and how to select the right funds to match these expectations. Independent research coupled with professional insights from a financial adviser will lend you a comprehensive understanding of how to invest and how to manage investments.


Dell

10. Invest in yourself

Investing in yourself is the most profitable investment you will ever make and when it comes to improving life skills and career prospects, young people have one clear advantage on their side: time. You should start professional development early and continue to upskill throughout your career. One of the biggest personal investments you could accomplish is getting a degree or equivalent qualification relevant to the industry you work in. Above all you need the drive and ability to invest in yourself, as this will largely define your quality of life now and in future.