Few of us are taught the importance of money in life when we're young. All through grade school and into college we are told to grow-up, get a job and make money. We however are not told what to do with the money that we make. Many of us find ourselves lost, in debt and struggling because our funds are slim although we have a job. Through self-research and experience it took me many years to understand the actual importance of money. Here I’ll share those tips with you in the hope that it will help you understand the importance of money in life and help you achieve a brighter financial future.
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1. Pay Your Bills
In my opinion, the most important thing you can do with your money is use it to pay your bills. Why you ask? This is the most important because paying your bills late or not at all will only cause more trouble than help. Not properly paying your bills will cause your accounts to go delinquent resulting in additional fees being charged to you, damage your credit, can result in service interruptions, repossession of your valuables, and higher interest rates. If you can afford it and the due dates coincide with your pay periods, try taking advantage of auto-pay which will ensure the timely paying of your bills. If that does not work for you, take advantage of a planner or wall calendar. Visual aids have been proven to be successful as you are giving yourself a daily reminder of the goal or task you are looking to achieve. Remember those new shoes are exciting to see on your feet but they are pretty boring in the dark.
2. Save
Life happens. You may lose your job, you may blow a tire or unfortunately catch the flu and you’ll need money to cover these expenses. Without having accessible money in your savings, it can be difficult to cover the unexpected occurrences in life. Many don’t save because they think it’s either unnecessary, to difficult, or they just prefer to shop. Stop the negative thinking in relation to saving because the reality is, is that saving is very necessary. If you don’t know where to start set a goal and try your hardest to crush it. To start off its best to set a small goal for yourself like saving every $1 or $5 bill or by opening a savings account and directly depositing $20 into it. After having a steady practice of saving money, make your ultimate goal creating an emergency fund in addition to your savings. Most experts suggest that you save at least two months’ worth of expenses in the emergency fund in the event of job loss. Also, don’t forget to save your loose change, it adds up!
Frequently asked questions
3. Contribute to a 401K
Many may ask what is a 401K, well in Lehman’s terms a 401K is a retirement savings account. This is a great account to have because you’re only going to get older not younger and unfortunately when we millennials retire there may not be many financial benefits available to us. Check with your employer, countless companies offer the option to create a 401K helping to make the process simpler. Take advantage of this as many companies will match the deposits you make to the account. In addition, banks both local and national can assist with creating a 401K and they can provide an in-depth explanation of all the details surrounding this type of account. Don’t hesitate to look into this, remember you are your greatest investment.
4. Treat Yourself
Treating yourself is just as important as every other tip in this article. However, treating yourself should be done after you’ve created a healthy habit of paying your bills on time and contributing to your savings. Find a balance between your needs and wants, creating a budget may help with this. Make sure the needs are taken care of first such as paying your bills, taking care of the grocery shopping, ensuring the gas tank is filled and stocking your personal hygiene items. Then purchase those items you’ve been dying for just make sure when indulging you are doing so within your means. It makes no sense to purchase a new Gucci purse when electricity bill is past due. I am in no way saying don’t shop but instead advising against constantly purchase expensive unnecessary items. A personal tip I follow is not purchasing an item if a I cannot afford to purchase it twice. So, treat yourself just make sure to do with sense.
