The habits that you build in your early life are usually the ones that stick with you. Some of these habits will be good – like making sure that you always prep what you need for work in the morning the day before. Other habits, like always picking up a bar of candy when you’re at the grocery store, aren’t so helpful.
Just as every day habits can be good or bad, your habits with your finances can also swing both ways. Allowing yourself to fall victim to bad habits in your early years because you assume that you’ll have more cash or stability later is rarely a good decision.
Though it’s tempting to spend all of your cash on fun things when you get your first job – particularly if you don’t have bills to pay for, you can improve your chances of long-term success by cultivating a few early habits instead. Here are the behaviors you may want to focus on.
1. Save a Portion of your Income
When you start your first job at a young age, getting your income can feel a lot like getting an upgraded allowance. You don’t have any responsibilities to worry about, so there’s nothing to stop you from splashing your cash on everything that tempts you. However, as you get older, you’ll find that saving becomes increasingly important, whether it’s for retirement, or for a crucial life goal.
If you start saving a small portion of your income back from day one, it will feel 100% natural when you need to save more in the future. What’s more, after a while, you’ll end up with some extra cash that you can use for a vacation, a down payment on a house, or anything else you want.
2. Track your Budget
Budgeting might not be much fun, but it’s one of the best ways to improve your financial health. When you know exactly how much cash you have coming in and going out each day, you’re less likely to make mistakes that could get you into debt. Once you get your first job, sit down with your paycheck, and think about how many expenses you have to deal with each month.
At first, your responsibilities might be somewhat limited. For instance, you might not need to pay for things like utilities and rent, but you will need to find cash for your fuel and car insurance each month or your phone bills. The more comfortable you get with budgeting when you’re still young, the less of an issue you’ll have when you need to track your spending in the future.
3. Set Goals
The fastest way to reach your goals is to start saving for them yesterday. Even if you don’t want to accomplish anything huge right now, there’s sure to be a few targets that you might like to reach. For instance, you might want to go on vacation with your friends or save up enough cash so you can buy a new, more fuel-efficient car.
Think about what you’d like to do if you had enough money and set yourself a realistic goal that you can aim for in the next year or two. You can also set goals that are more long-term in nature. For instance, you might want to save up to get your first house. Don’t worry if your goals change later, at least you’ve started to make progress by saving back some cash.
4. Avoid Unnecessary Debt
No-one can avoid getting into debt entirely. The chances are you’ll eventually need to take out some kind of loan for your car, your home, or even your education. Trying to get through life without taking out a bad credit loan is a serious challenge – and something that most people won’t be able to accomplish. Even if you could, you would end up with a terrible credit score if you ever needed help from a bank.
Instead of avoiding debt entirely, make sure that you simply don’t take out loans that aren’t right for you. Compare your options before you sign up for a cash advance, and always check that you’re getting the lowest interest rates.
5. Be a Bargain Hunter
Finally, never just assume that the price you see has to be the price you get. There are plenty of ways that you can hunt down better deals today. Whether you download an app on your phone that checks for voucher codes when you’re making a purchase, or you simply commit to looking in different stores before you buy something big, always compare your options.
The more time you spend hunting for deals, discounts, sales, and other offers, the more money you’ll save in the long term. This frugal attitude will pay off in the long-term, and the short-term.