Many young people can be careless with money, not thinking about the impact this will have on them later in life. Here, we will take a look at some of the most common financial errors made by young people, so you can learn how to avoid them.
Young people are more prone to using payday loans as a way to get cash quickly. This is a great mistake, as the interest rates are extortionately high on this type of loan. Therefore, they are a common reason why young people get into debt. We strongly advise against this type of loan even if you are desperate for quick cash.
If you are looking to borrow money online, it’s recommended to use a more responsible service. http://pplaina.fi/ can help you find a great online lender with reasonable interest rates and flexible terms.
Another common mistake young adults make is misusing their credit cards. You should make sure to thoroughly understand the terms of your card before beginning to use it – including interest rates and repayment terms. Paying the minimum amount can lead to problems later on, and missing payments or paying late can also be dangerous.
Young people are also prone to eating and drinking out a lot, without considering how the cost will add up. A few dollars on a takeaway coffee or sandwich every day might not seem like much, but work out the cost over a year and you will probably be shocked. This could often cover a month or two worth of rent if you cut out the daily latte!
Another frequently seen financial mistake in young adults is failing to set a budget. You might fall in love with a dream apartment, without realizing the rent takes up 90% of your monthly income. Or you might go shopping without thinking about whether or not you can really afford everything. By failing to budget, you might also find you don’t have any savings, either for the future or for unexpected expenses.
By failing to have money set aside for a rainy day, you might end up facing sudden healthcare expenses or car repair bills. This can lead to problems if you end up turning to a payday loan – discussed above. And without any savings, it can be difficult to ever buy your own place. Even if it’s just a small amount, setting aside some cash every month into a savings account is always a good idea.