The young and ambitious working class has a strong appetite for spending on travel, designer clothes, gadgets, and even concerts. Their relative freedom from responsibilities, stress experienced at work, and excitement over new things have the biggest influence on their spending habits.
While there is nothing wrong about indulging in life’s luxuries, financial imbalance often results from the failure to forgo current consumption in favor of building a stash for the future. Failure to plan for future financial responsibilities can be disastrous. Below are some things that the young ones must consider to ensure a secure, sustainable, and worry-free retirement.
Cut down on unnecessary spending
People tend to spend on relatively unimportant and fleeting material things that satisfy short-term needs. The want to have the latest model of a phone, the false need to drink expensive coffee at leading coffee shops, and the desire to acquire expensive clothes are all behaviors permitted only by a robust cash flow and by already met basic needs (fixed daily expenses, emergency fund, etc.).
Maximize work benefits
Starting a job at any company is not a guarantee of high earning potential. It is vital to choose a career that has a slightly higher starting salary but still leaves enough room for growth based on skills, competence, and work ethics. It is best to look for a company that offers a retirement plan, health and life insurance, recurrent salary increases, an incentive system, and savings-like employee benefits. These, while not necessarily the key to absolute financial freedom, are the building blocks to a secure future.
Marriage is a long-term commitment that requires emotional maturity, financial preparedness, and a strong socio-spiritual foundation. Aside from the fact that a divorce is expensive, similar marital catastrophes will also divide financial assets that would create a bump in the long-term financial plan. The young must have a practical and reasonable view of marriage before making the commitment.
Get insurance and start building an investment portfolio
In investing, time is one’s best friend and worst enemy. Starting young is always an advantage because it provides a wide horizon to build wealth and try out high-risk but high-return endeavors. As for insurance, premium prices are at their cheapest for young and healthy individuals. Modern insurance products now also offer living benefits that activate without requiring the occurrence of a life-threatening incident.