Self-reflection is a powerful thing. It's the reason why people like myself buy books like "The things i wished i knew at 20." or "Things I would say to my younger self." I sometimes reflect on my childhood year with amazement and hilarity, especially with regards to my money spending decision. Although I am still very much in the learning process and there are probably a hundred and one things i do not know. But what I do know are the things I should not have done. That i am very sure of.
1. Save before you spend - Although this is exactly the reason why this blog was set up in the first place, I can't help but repeat myself like a broken record. Savings may be old fashioned and even lame to some but it sure works. Whether it's a piggy bank, savings accounts, or under your pillow, as long as you promise yourself not to touch it, it will work!
2. Delay the buying process - I am talking about impulsive buying here. Draw a very thick line between your wants and needs. Impulsive buying usually ends up as a sad story upon reaching month end and that 'expensive' item usually sits in one corner of your house and you would be left thinking 'What the hell was I thinking?"
The truth is, if the item is a want and not a need, most likely you can budget for it and purchase at some point in the future.
3. Budget - Above all, be honest with yourself about your finances. Budgets aren’t just for people who are strapped for cash; they’re a mark of financial maturity and self-awareness. Track your spending. Know how much money is coming in, and know where it’s going out. With that knowledge in hand, your other financial goals will practically write themselves.
4. Establish an emergency fund - You’ll feel a lot safer with enough cash to cover three to six months’ living expenses stashed away. Then use your emergency fund, not a credit card, when you’re pinched by appliance repairs or car troubles. Be firm with yourself about what circumstances constitute an emergency; if you find yourself dipping into your emergency fund every summer for vacation, it’s time to go back to lesson #1 and save before you spend.
5. Learn - Although it might seem complex, the financial markets really aren’t difficult to learn and you don’t need to be a stock market wizard to navigate them. Take advantage of free online financial resources. Start to invest!
Many of us are still coming to terms with financial truths we’ve been taught all our lives but that took years to show up in our bank balances. If you could go back in time, what financial lessons would you teach your younger self to take?
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