When you’re just starting out in the world of work and education, you’ve got a big shot at life. No matter your circumstances, your relationship with money will define your future, your level of stability and security, and, of course – the rest of your life. We’re sorry to say, but money really does make the world go round, and you could lock yourself out of a future and enter a world of financial insecurity if you are not careful with your cash. If money makes the world go round, you can easily find yourself lost in that same cycle.
The good news, though? You’re young, you’re just starting out, and you have the internet. This means that you’ve got time, opportunities, and knowledge on your side (if you choose to read up and learn, that is!). With some valuable tools, you can avoid making financial mistakes and you can – for the most part – develop a healthy relationship with money quite easily. The key? It’s to never let your spending outweigh your earnings. Major shopping sprees, vacations, and spending with reckless abandon? It’s an easy path into pointless debt. It’s an easy path to financial misery.
People will get into debt. When you take out a loan to fund a car purchase after passing your test, you’ll be in debt to the provider of the finance. When you get your mortgage, you’re in debt with the lender. When you take out a loan to fund a business venture, you’ll be in debt. This, for the most part, can be seen as “good debt”. It’s debt that is acquired for a purpose. What’s bad debt? Well it has a different definition in business, but to us, it’s the debt that you acquire with high-interest values because you can’t hold yourself back from spending. It’s payday loans; it is credit cards.
Debt is a real danger and for a number of reasons. Debt, of any size, will affect our credit rating. This can affect the future of a young person quite drastically. It can mean that you are rejected from having a mobile phone contract. It can mean that your mortgage is turned down. It can seriously affect any future decisions that you choose to make.
Debt also creates emotional stress and worry. Debt isn’t the end of the world, we all get into debt – it’s how we pay it off that matters. Getting out of debt might include asking for a few extra hours a week at work or asking family or friends for some help. It may be awkward – a lot of us don’t know how to ask a friend for money but it will definitely help give you some peace of mind about your overdue payments.
Being in debt isn’t a bad thing – it is when we choose to live in debt that things turn nasty. There are always methods to paying off debt and anyone that you owe will prefer that some attempt at paying can be made. When you are in debt, you will always have options like student loan forgiveness. Getting stressed about being in debt can quickly lead to one avoiding paying for their way out of it.
To stay in control of your cash, you need to manage debt and your spending. This can be hard for youngsters – because they are explicitly targeted by those who seek to profit from debt. However, control of cash is an invaluable skill for anyone and your bank account will be thanking you! Not today, debt. Not today.
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So much wisdom here I wish I would have had when I was 18 and hitting the ground and running…
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