Happy New Year! Well, 2020 was quite the year. To say it was full of surprises is a complete understatement. Covid-19 really turned people’s worlds upside down including in financial matters. People lost jobs, businesses closed, savings were depleted. Money matters got messy to say the least.
Many people were and still are in financial crisis. I am not going to say there is an easy fix because what happened this past year was unprecedented. Yet, there will always be unknowns and those unknowns usually affect finances. So what can you do to prepare for the financial unknowns? You can begin to master your personal money situation. You can master money at any age. When you master money at a young age, you set yourself up for money security, money wellness, and ultimately financial freedom. Also, it helps you weather the storms of life. There will be storms.
Start Mastering Money At A Young Age
Ultimately, you can create financial freedom in your life. I came from very humble beginnings and was able (secret spoiler alert: while living a very full, fun life) to create financial freedom in my life by the time I was 50. Also, another spoiler alert- 50 came way faster than I expected- so glad I started young!
Why start young? Having time and age on your side is one of the best ways to grow your wealth. Money grows over time. Compound interest is magic! Also, when you learn core money skills early and practice good money habits- it becomes a way of life and without much effort you begin to create wealth. It is easier to learn good money habits than to unlearn bad money habits.
We all have to deal with money in our life- that is a simple fact. Money is needed for food, housing, utilities, healthcare, clothing, entertainment, and for a myriad of other reasons. Why then, do we sometimes get badly tripped up by money? I would venture to say that one of the major reasons is that most young people do not receive financial literacy training at school, core money skills are often not taught at home, and society at large does not focus on these skills. Yet, these skills are imperative.
Avoid Credit Card Debt
Racking up debt on credit cards is one way a lot of people, including young people, get in trouble with money. Experian Credit Bureau reported that Individually, consumers owed an average of $6,194, in credit card debt in 2019. https://www.experian.com/blogs/ask-experian/research/consumer-debt-study/
Credit card debt is not good. First, credit card companies charge exorbitant interest rates. If you are late on a payment this happens:
- Late Fee (usually $35-$40)
- Your credit card interest rate can be increased
- If more than 30 days late, the late payment is reported to the credit bureaus, which can decrease your credit score
Many people get really tripped up with credit cards when they start paying just the minimum payment or a fraction of what is owed. This is detrimental to your financial well being. When you calculate how much you are ultimately paying for purchases nothing is ever really “on sale” when you buy on a credit card and do not pay the balance in full every month. Start doing this regularly and/or with multiple credit cards and you are creating runaway debt.
If you already have accumulated credit card debt there are strategies to get out of the debt. Yet, the substantially easier way is to not create the debt in the first place. Learning core money skills and habits young helps you direct the course of your financial life. So many money mishaps could be avoided with knowing core money skills, creating good money habits, and having a positive money mindset.
When you are young, and learn to live within your means, or even below your means, to amp up your savings/investing and stay out of debt, you empower yourself. I believe learning to grow your money and create wealth at a young age is a gift not a sacrifice. When I look back at my twenties and thirties, I was being responsible with my money, saving and investing, and I was also living a fabulous life!
Do you believe that learning how to make your money work for you is difficult or time consuming? It is not. What is difficult and time consuming is having money chaos in your life and crawling out of debt that you could have avoided.
Being financially responsible at a young age is freeing and helps you build wealth. I know because I did it and it works.
I am passionate about teaching young people what I know and helping you get on the path to financial wellness and ultimately financial freedom. Empower yourself by learning core money skills, good money habits, and positive money mindset.
Student Fundamental Financial Skills Workshop January 12th
My upcoming workshop: Student Fundamental Financial Skills live on Zoom January 12th at 5:30pm EDT. It is everything you should have learned in high school and college about money but did not. Whether you are a current student, a recent graduate, on your own for the first time, or just want to understand how to make money work for you and start the path to financial freedom- this workshop is for you.
Register below and use promotion code: MoneySkills for a 15% discount off the $59 price. https://bit.ly/moneymaestrastudentfundamentalfinancialskills
Susan, The MoneyMaestra