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August 22, 2022 | 2:32 pm
Technology gives young people the opportunity to make money. However, it didn’t end with making money. A fascinating study in the Journal of Positive School Psychology reveals many insights into young people’s spending patterns: “Today’s young people have grown up in a debt culture that is accompanied by expensive lifestyles and easy credit card creation… …
Technology gives young people the opportunity to make money. However, it didn’t end with making money.
A fascinating study in the Journal of Positive School Psychology revealed many insights into teen consumption patterns:
“Today’s young people have grown up in a debt culture, thanks to an expensive lifestyle and the ease of creating and using a credit card. “
With the help of social media and easy financial transactions (thanks to technology), young people have lost the edge in creating wealth for themselves.
Unlike the good old days, our parents, guardians or grandparents have stable jobs with guaranteed pensions.
More recently, however, governments and regulators are moving away from guaranteed pensions, and businesses are moving away from providing lifetime employment.
That means we can’t rely on strategies that worked for our parents or Gen X because those strategies no longer work. While it may be helpful to some extent, the information may be outdated, missing or incorrect.
In this article, we’ll share the importance of developing a financial plan, with a focus on young people, and the tips you need to find one that’s right for you and your needs.
What is financial planning?
Financial planning determines how much you need to earn, save and spend, and how much you need to earn, invest and spend. You can manage your finances and achieve your life goals by planning your finances.
Why does this matter?
According to Robert Kiyosaki, author of Rich Dad Poor Dad, “What matters is not how much money you make, but how much you save, how hard it works on you, and how many generations you save.“
Financial planning gives you the edge in life. It can help you manage your income, avoid debt, and save yourself from unforeseen circumstances.
You may claim to be a saver, but without a documented financial plan, your savings is like a wanderer without a map.
develop a financial plan
Now that you understand the importance of financial planning, how do you create one for yourself?
know where you stand
What does it feel like to wear loose underwear? uncomfortable? Not confident or upset?
You will agree with me that knowing your perfect size has many benefits for you. The same goes for financial planning.
Money Africa’s Tosin tweeted: Money is like underwear. You have to make a plan that is good for you.
Understanding your current financial situation is the first step in developing a financial plan.
When you compare your income and expenses, you can see your cash flow and where your money is going. This will serve as the basis of your financial plan.
set your goals
Setting financial goals is the second step in the financial planning process.
Your financial goals should be specific to your situation and reflect your future goals. Given your financial situation, the goals you set should be achievable.
Also, it is important to establish long-term and short-term goals.
Some common goals include: Plan for a second degree, save for retirement, invest in real estate, and more.
The next step is to assess the importance and priority of each financial goal, as well as the expected length of time each program is expected to take.
plan for the future
The next step is to develop a strategy to achieve your financial goals.
For some, achieving financial goals may simply mean continuing on their current path. Others will need to change their lifestyle or outlook to achieve their financial goals.
It’s also important to check your income and expenses. You may be able to cut costs in some areas to better allocate funds. Simple steps like cooking at home and cutting down on expensive outings can add up quickly.
Always review your financial plan
You should always update your financial plan regularly. Take the time to regularly review your savings and investments to see if they are meeting your savings goals.
Consider whether your current risk level provides the expected return and make any necessary adjustments.
What steps are you taking now?
The complexities of life are unpredictable. It’s important to arm yourself with several financial skills so you can make better use of your money.
Remember, the lack of financial literacy is mainly due to poor financial decisions.
In the words of Frank Samuel, founder of Financial Fitness Clinic, “If you know better, you’ll do better.”