Epic Financial Skills Every Youth should possess
- Admin
- Nov 22, 2016
- 2 min read
When we were growing up, our parents took upon the burden of teaching us a lot of things about life. However, not many of us had the luck of being taught about financial skills. Most parents assumed that those things were taught in school, or that those skills would be picked up along the course of life. Some finance classes are taught in universities and colleges, which have been helpful in navigating day to day life.
Discussed below are some of the financial skills I gained from my finance lesson class. I have decided to share them with you since I feel they might be of help to you as they have been to me.
Related: How To Use Credit Cards Effectively
Differentiating between needs and wants Everyone knows the difference between needs and wants. When growing up, we had all our needs taken care of by our parents. This made it easy to use our pocket money on wants. When we finally become financially independent from our parents, then reality can hit really hard when you become responsible for all your bills. At this point, if you continue prioritizing your wants over needs, the consequences can be painful and long lasting. To be on the safe side, separate the needs and the wants, prioritize paying for the needs, and you will never get stuck financially.
Preparing a budget Have you ever gone on a blind shopping spree just because you received a salary? I don’t want to imagine the kind of unnecessary things one puts in the shopping basket. Lack of a pre-planned budget is one dangerous way that can make you run out of cash even before mid-month.
To avoid feeling the effects of this mistake, always ensure you have drawn a reasonable budget. Include all important stuff such as food supplies and clothes if you need a new set. Whatever the case, always ensure you save for the rainy day.
Building a positive credit history Avoiding debts is necessary as you can relax knowing no one is chasing you for their money. However, this is not a good strategy if you want to build credit history credibility. For this reason, it’s important to take small loans and always ensure you pay in time. These small loans and quick repayments will improve on your trust with money lending institutions. Doing this will make it easy for you to secure loans in the future.
Saving for emergencies While employed, you are assured of regular cash in your account every month. This confidence makes it very easy for someone to use all the money since the monthly salary is guaranteed. My dear friend, this is the worst assumptions you can make. As the Swahili saying goes “ajali haina kinga.” An emergency might occur in between the month requiring incurring some unexpected cost. It would be an appalling image to seek help from friends who probably know you have a fat paycheck. Make it a habit to save for any unseen emergencies every month.
Start practicing these tips if you aren’t already doing so, and you will thank me at a later date.
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