The joy of earning your own money is surreal. Young people cannot wait to finish school and get their first job to earn some money, but the reality of bills is equally waiting to hit them unexpectedly. They receive salaries on the 25th of the month and by the 10th their accounts are below the minimum balance, making them over-indebted.
The solution starts with acquiring critical life skills such as how to budget your funds, cope with credit and debt, and gain the knowledge necessary to make smart purchases. But we often see the opposite.
Who Should Give Financial Advice?
There is a belief that it is okay to spend what we have now because a better job is coming in the future with a better salary, which we can save from. This idea has caused many employed young people in these times to fall back on their parents for financial support. Well, they are part of the problem, so they need to come up with a solution.
In a 2012-2013 online poll by the National Financial Educators Council (NFEC), 65 percent of the 622 participants who were asked who should teach kids about money said that parents were responsible for teaching their kids. I am not sure if we should conduct another poll asking the youth how they learned about money. Many parents themselves do not have much knowledge about finances and may feel unqualified to teach their kids.
How you utilize money is how you ensure it sticks with you. Shawn S. Lee says, “Money that comes before the age of 40 is not yours. When you reach your 40s, you should practice how to spend it.” He went ahead to advise that one must use 30 percent and save 70 percent of their money, even if they are a street vendor selling bread.
Is Societal Pressure the Main Cause?
But the main struggle of young people today is how to keep up with the pressure, the desire to take on trips, wear designer outfits, get that trending hairstyle, and so on.
The failure of parents to instill money knowledge in their children causes them to develop a negative attitude towards money. Lots of factors affect their habits including advertising exposure, peer influences, parental modeling, and environmental conditions.
The average young person would spend money on food, rent, clothing, transport, app purchases, airtime, and data. This may vary from country to country. Females are known for their luxury spending on hygiene and beauty products. The males are also known for entertainment and gambling.
Is There a Way Out?
In spite of the numerous roadblocks which seem impossible to overcome, there is hope. Young people should take advantage of social media and the access to information made available by the internet to get financial knowledge from various sources.
Due to the differences in our environment, upbringing, and experiences one size does not fit all; hence young people can go through various options and find one that suits them best. They can decide to try a number of options and later settle on what works for them.
Some options to save and grow finances may be either through a monthly savings plan, an investment policy, supporting a friend’s business and sharing the profits, starting your own business, or even signing up on an insurance plan that should mature within a number of years.
There are also other online modules that some people swear by including Bitcoin and cryptocurrencies. But proper research should be done on these various options so as to avoid being scammed as many people have shared experiences about being scammed online.
Each one is responsible for their own financial well-being and should take the responsibility to learn and practice how they can make use of the available tools they have now. Being financially independent is not a one-day wonder; it takes time, patience, effort, and consistency to attain a great level of wealth.
Stories shared by many world wealth controllers show us that money should be invested properly and guarded over time before one can reap its benefits.
Discipline is an important virtue that can help achieve this.
Photo: Dean Drobot/Shutterstock
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