The major problem of young professionals today is financial mistakes. The first thing that young professionals should learn is how to handle their hard-earned money. How to allocate, how to budget, what to prioritize, where to invest, what to buy, and where to save. These are the questions that young professionals struggle with. Learn the 7 budgeting guidelines at Bria Homes that will surely boost your budgeting skills. Now that you know how to budget your income and money, know the top 5 investments for young professionals at Bria Homes. This will help you decide where and what to invest first. As you would know how to budget and how to invest, you should also learn what money mistakes you should avoid as a young professional.
Being a young professional brings freedom from academic studies and pressure from finishing school but introduces them to a new different world. Young professionals today face anxiety and stress from work, from family, and from themselves. They might be free from studying and currently working through their career, but unlike students, they don’t have an outline of what, where, when, and how of life. They are struggling with decision-making not just in their personal life but as wel l as for their professional life. Juggling between the two, young professionals are facing problems each day as they start their adult journey.
You face mistakes every time but make sure you learned from them. Mistakes are accompanied by consequences and these could cost us financially. Listed below are the biggest money mistakes to avoid as a young professional.
1. Never learning to budget
Number 1 in our list of money mistakes young professionals usually commit is not learning to budget. Budgeting is the process of estimating your income and expenses over a specified period of time. A budget is a financial plan usually made monthly to provide an estimation of your profit. A budget will help you allocate your money into needs and wants. You must prioritize your food, transportation, rent, and utility bills. Then later on dividing into bills, debt, and savings. The best way to avoid failed budgeting is that your income should surpass your expenses, debt payment, savings, and investments. If not, then start cutting off expenses that are non-essential. People find it easy to save with different envelopes with tags. You can start adopting this method and learn the proper way of budgeting. Never learning to budget is the most common financial mistake for young professionals.
2. Failing to set financial goals
Financial goals are plans you made for both short-term and long-term. This will help you discipline yourself from overspending and provide you with financial stability in the long run. Start with monthly savings and work yourself up with different funds such as emergency fund, retirement fund, and vacation fund. Eventually, saving will be your habit, and spending money on non-essential goods will be terminated from your hobby. Since the pandemic began, a lot of people were not financially ready and thus created a trend for cheap living. People started sharing their journey, failures, and success. Start your journey toward financial independence.
3. Relying on parents
Parents are indeed heroes but it is never acceptable to rely on them in case of being short on money by allocating more to social activities. End your financial dependence and start your financial independence by being responsible for handling your money, allocating your budget, and anticipating expenses such as gifts, outings, and emergency funds for appliances. As a young professional, you are ought to learn about the standards of life, and relying on your parents is one money mistake to avoid.
4. Taking credit card debt
Credit card companies encourage you to spend and swipe that credit card but a lot of young professionals are foregoing the terms and conditions of their card and eventually get charges or billed interest and penalties. Monitor your credit history, pay your card on time, know the terms and conditions, know the interest rates and other charges to maximize your benefits in using the card. Manage your credit responsibly and if you can’t, better not take a credit card as it also records your credibility and if tank, will take years to solve and more money to pay.
5. Not starting to save
Savings are the big step toward financial freedom from your financial difficulties. Young professionals often live paycheck to paycheck as a big chunk of their salary goes to expenses. Create a bank account or savings account and start saving a small amount and have it deposited at AllBank, the bank for all. Savings will help cover unexpected costs, such as repairs, health, taxes, and unemployment. Start saving money worth three to six months’ worth of expenses and gradually strengthen your safety net.
6. Not availing insurance
Insurance is a guarantee of compensation for a specific loss, damage, illness, or death in return for payment of premium. There are various types of insurance such as life, health, car, homeowners, and travel insurance. This insurance could help you cover unexpected or unforeseen expenses in the future. This should not be taken lightly as this may serve as your training ground for financial stability. Start your insurance policy now and get covered for emergencies.
7. Buying a car
Young professionals today view cars as a necessity. Though it does bring convenience, being a starter, it’s not the first thing you should invest in. As young you could be, it is recommended to invest in matters that will generate you savings and incomes, not expenses. Learn the top-recommended investments for young professionals at Bria Homes. You may start investing in your future home starting today with Bria Homes. They offer affordable houses and lots, and condominiums that are popular among young professionals. Learn the best thing about real property as an investment on the Bria Homes website and educate yourself on investments. You should be investing while young that will bring you more income-generating activities and profit centers in the near future.
8. Living expensively
The most common financial mistake many young adults makes is spending excessively on their living expenses. Though it is acceptable to enjoy life, there are limitations you should build. Cut down unnecessary costs in your personal finance such as fancy meals, branded shoes, and expensive clothing. Such matters can be handled by shopping at AllHome, your one-time shop with all the things you need in one store. From clothes, shoes, bags, make-up, kitchenware, and appliances.
9. Not generating more than one income stream
There are eight income streams that a young professional should work towards and one of the common money mistakes of most young professionals is not generating more than one income stream. Know and understand the eight income streams at Bria Homes. You should take advantage of being young with full of energy and more free time to accumulate income-generating activities. Time and energy are precious resources that you should use efficiently and effectively.
10. Starting a family without a financial plan
Everyone is dreaming of starting their own family but you should also take into consideration your financial status. Starting a family is a dream come true but it also accompanies costs that you should consider. Your own home, your appliances, your wedding budget, your kids’ schooling, and other necessities. Starting your family without a financial plan could promote problems and create chaos in the family. Include a financial plan into your family plan and enjoy financially stress-free in your family. A lot of families in today’s society are renting, you should read the difference between renting and owning your own home. If you find a house and lot to be too much, you can invest in Bria Condo Vertical Villages that are very popular among the youth. Start investing in your future house and lot or condominium with Bria Homes today.
These are the money mistakes to avoid as a young professional. Being young and free is something to celebrate but it is also the time that you make financial mistakes and learn the ABCs of life. Be smart and be wise in handling your finances. Nothing could beat being financially prepared. Equipped yourself with knowledge, save money and start your journey towards financial independence.