As a young adult, it can be easy not to be too concerned about building better money habits. Though what you do right now while you are young will determine your future. Let’s talk about a few money habits you must implement as a young adult so that you can be well on your way to successfully managing your finances for the rest of your life.
Learn how to save
It does not matter how much money you make. If you don’t know how to save, then you will never know how to properly develop better money habits. Saving and managing your money go hand and hand. If you struggle when it comes to saving you could follow a savings challenge. I created the Savage Saver savings chart that will help you save $500 in 8 weeks. Following this challenge will make saving fun and certainly help you develop better money habits surrounding savings.
Get your credit together
According to a 2020 Nerdwallet study on American household credit card debt, the average consumer debt per household is $6,741. The pandemic did not help, many people depleted their savings, loss their job and had no choice but to depend on credit cards to pay their bills. Though if you can control things – focus your efforts on not using a credit card to make purchases you can’t afford. I believe it is necessary to understanding your FICO score. This is the number that determines your creditworthiness. If you want to understand more about credit, certainly subscribe and download my guide to building and maintaining excellent credit.
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Figure out ways you can spend smarter
This first begins by identifying your toxic spending habits and setting a budget and getting clear on what is truly a want and what is a need. You can start by making a list of things that you value then determine if your spending habits reflect your values. I’ll use myself as an example. I love trying new food and visiting restaurants I’ve never tried. Therefore, I include money in my budget to spend on good food because I know that this is something that will make me happy. If you truly want to identify your toxic spending habits, you must know your triggers. These could be people, subscriptions, or even websites and social media. We’ve all made money mistakes, and it’s okay. Forgive yourself but also recognize who you were around or what impacted the decision. This is essential and will absolutely help you develop better money habits as a young adult.
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Track your spending
Do you know where your money is going? The only way to find out is by getting into the habit of regularly tracking your spending. You can incorporate this into your system of budgeting. Again, consider value-based spending. Before sitting down and creating your budget, make a list of your values. These are the things that bring you joy and can look something like this:
-I value eating good food, therefore I set aside money to enjoy a nice meal once a week.
-I value working out and staying fit. Therefore, I pay for a personal trainer.
-I value having healthy hair. Therefore, I spend money on keeping my hair in protective styles.
Following this technique will help you develop better money habits because it centers your money around your values and the way you spend.
Intrinsic Motivation
Ultimately, you must want to develop better money habits because it is something you want for yourself. Many people might not naturally think to become more aware of their financial situation until they’re trying to do something like buy a home. This causes them to become more motivated to do things we discussed above like saving and repairing their credit. Having what I call “money dates” with yourself is a good way to frequently check in with your money all while romanticizing the idea of being clear on where you stand with your finances.
