5 things that you need to know when it comes to your finances as a young adult.

I wish that I was into blogging at 18 and that I had other bloggers who could advise me on simple finance things, because who really believes their mom?

Below see my 5 things you need to look at as a young adult:

1. Don’t get too excited to build your credit

Being a young adult the first thing you want when you turn 18 is independence, you want to be able to make your own way in the world. So we apply for credit cards and store cards and while you are still living with your parents this in my opinion is a bad idea. Don’t get me wrong you need to build a credit record to get credit in the future, but wait until you have been working for a year or 2 before getting a card for everything. My advice would be to start with a simple cell phone contract, this will build your credit but is affordable.

2. Learn to budget

You think being in your twenties you can wait for things like planning for your old day another couple of years. That is what I did and now at almost 28 I have started saving for retirement. This is way too late. From your first salary open a 32 day savings account and put 1/10 of your salary away. Start with a provident fund and life insurance savings plan. The Hippo comparison tool could potentially provide you with a range of affordable insurance quotes which could assist you to make the required decision. Yes, it’s another expense but it is a necessary evil and doing this from day one, will mean you would never be used to having that money and your future will be taken care of.

3. When buying proper clothing

Apply a general rule. For every 2 things you buy you need to get rid of 1 thing. This way you don’t buy things you don’t need. This also applies to clothing; I don’t mean when you go out and buy a wardrobe for work because you started 2 months ago and can’t keep wearing the same pants every second day. Spend money on proper timeless pieces that will last you years. I have a coat that I got at Truworths in 2007 it cost me R 1 500.00 back then and it still looks new, but the coat I got last winter at Jet for R 100.00 only lasted one season.  So instead of having a full cupboard of things you hardly wear, buy proper pieces and with each piece you buy get rid of something you do not wear.

4. Stop borrowing and pay off your debt

You have already made the mistake to build your credit so quickly that you cannot keep up with the payments, you fall behind and you now run to the bank to borrow more money to cover that debt. This is a mistake. Stop spending immediately. Rework your budget and stop using your credit. Start paying off your debt without borrowing more, if you have to, write to all your creditors include all your financial statements and make payment arrangements where possible. This is a cheaper option that taking out a loan to settle your debt and then keep spending.

5. Just because you’re done with school, doesn’t mean you can stop learning

I know what you’re thinking, you have had 12 years of school and maybe another 3 or 4 at university and now I am telling you to continue learning and yes that is what I am telling you. The job market is never stable. So if you studied to be a Journalist you might not be able to find work immediately and if you do, it will be an entry level position paying peanuts. Why not continue studying part time? Maybe something in the financial sector or that has always interested you, but may not have fit as well with journalism. This means that you might have 2 degrees in different fields and if needs be you can run two jobs at the same time and you have something to fall back on if the one does not pan out.

Any advise you would like to add?

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