Seven Things Young People Must Know About Financial Management
1. Keep Records
Everyone knows that financial management requires keeping records. It's not hard to do it for a week, or even a couple of months, and three to five months shouldn't be a problem either. However, truly maintaining records for one to two years or even a lifetime is quite difficult. In fact, as long as you make keeping records a habit, over time, it will become a part of your life. We talk about financial management because we want to better design and plan our lives so that we can live better. Keeping records helps us understand our cash flow, allowing us to know where we've overspent, what wasn't necessary, and how we can spend more effectively.
Therefore, if you want to manage your finances, the first thing you should do is learn how to keep records. You can do this at Caike Online (www.caakee.com).
2. Live within your means
Once you start keeping records, you'll realize that some expenses are quite irrational. At the end of the month, you'll see that you've spent a lot on snacks, clothes that sit in your closet almost unworn, and a bunch of useless items. Some of these things are completely unnecessary, so when you're about to buy something, ask yourself: Do I really need this? Then count down from ten, and most of the time, you'll realize that it's not something you absolutely must have. Of course, you need to understand the difference between "wanting" and "needing." Financial management requires rationality and restraint. Being restrained now is for a better life in the future, just like resting is for better work!
3. Accumulate your initial capital as early as possible
You must learn to save regularly and forcefully. Don't think that saving one hundred or two hundred yuan per month isn't much; even if it's just a few dozen yuan, take advantage of your youth to accumulate as much as possible. Get into the habit of setting aside a fixed amount of money every month without fail. In the future, you'll realize that this fund will serve as your starting resource. Ideally, you should start while you're still in school by saving your lucky money and pocket money. Nowadays, children's pocket money is quite substantial, and you might even have a considerable personal asset by the time you graduate from university.
4. Don't pay for everything with credit cards
Credit cards aren't suitable for students or young people who have just started working. Paying with cash is good and there's nothing inconvenient or uncomfortable about it. I used to prefer paying with my card even for a one-yuan bottle of mineral water, but at the end of the month, I realized that a lot of money had disappeared inexplicably. Don't complain about how your money vanished without you noticing; it's because you were careless with your spending. So, generally speaking, there's no need to use a credit card! This will numb your sense of consumption. Therefore, please keep track of your expenses for just one month, and you'll know exactly how your money disappeared inexplicably. Don't compare yourself to others; there's no point in doing so. Try to avoid debt during your youth. Don't think that being young makes it okay; actually, it's precisely because you're young that you need to learn how to control yourself.
5. Don't invest blindly
When you have a small amount of money, you might consider buying funds or government bonds, seeing that many people are earning profits. But remember, the money you're using could be something you've saved for a long time. Any investment carries risks, and investments should always be made with your "extra money"—the money left over after covering your normal living expenses and having an emergency fund. Don't fully trust the exaggerated claims of big earnings from TV, websites, or securities companies. Also, understand the risks you can bear. If you're very risk-averse, then you may not be suited for such investments. There are many types of investments, and not everyone is suitable for investing in funds, stocks, securities, or government bonds. Discover your own strengths—invest in yourself. You can continue learning, or engage in other trades. In short, there are many ways to earn money; find the investment method that suits you best.
6. Invest in yourself
Life is a continuous process of learning, and the most important thing is to constantly increase your self-capital. Especially when you're young, without family burdens or pressures, focus on enriching yourself. This is the time when your learning efficiency is at its highest! Once you get married and have children and a family, your learning efficiency won't be as good as it was when you were younger and free from responsibilities. Moreover, any investment in the world carries risks, but investing in yourself is the most real! As long as you have skills and abilities, you'll always be able to make a living! So, while you're young, study more, gain more knowledge, and enhance your experience and capabilities!
7. Insure yourself and provide security for your parents
Don't think that this is too far away. When you start your first job, your parents have worked hard to raise you. If anything unexpected happens, we can leave some security for our parents. This is our responsibility and care for our parents. You don't need to spend a lot of money; you can buy a fixed amount of insurance for yourself. If an accident leads to death or disability, a large compensation can be provided to your parents. Name your parents as beneficiaries. Living well is the best security for our parents. Of course, there are other related insurances, which you can consult with professional insurance agents. Here, I'm only talking about insuring yourself, leaving a considerable sum of money for your parents in case of accidents or death, ensuring they have a better life in their later years. This isn't cursing yourself; we all know we will live happily and strive for happiness. But insurance is about buying peace of mind and security. It offers both mental comfort and real protection in case something does happen!
This is our responsibility and care for our parents or family!