Youth and Money: Finding the Frugal Balance
At a relatively young age, there are several decisions you must make that will set you on a certain path for the rest of your life. If that’s not daunting enough, add money to the equation — the frugal habits you learn (or don’t learn) now can affect the security of your finances well into your retirement years. “But I’m young, I’ll worry about that later,” you might try to argue. Unfortunately, refusing a financial education now can produce disastrous results.
So if you don’t want to be broke at age 65 but you want to enjoy your youth while you still have it, how do you strike a balance between work and play? (See also: The Big List of Student Discounts)
Stay Ahead of the Pack
Math isn’t as useless as many students make it out to be. It may not be a fascinating school subject, but in regards to financial matters, it’s one of the most important subjects you’ll ever study. Many colleges and universities offer basic personal finance classes, but since they’re generally not required for non-economics majors, many people choose to pass on them.
To give yourself an edge over your peers, take this class. Read up on the subject if there are no classes in your area. Wise Bread’s archives are overflowing with helpful articles on nearly every aspect of personal finance imaginable, so inform yourself as much as you can on the subject. This knowledge, if applied in real life, ought to provide you a secure financial future while a few of your peers live paycheck-to-paycheck for the duration of their working lives.
Focus Less on “Stuff"
As a wise fictional character named Tyler Durden once said, “The things you own end up owning you.”
Now, Fight Club may not be the best source of information when it comes to personal finance matters, but there is truth in the above statement. With each passing generation, we seem to become more and more focused on acquiring as much “stuff” as possible. Why? Because technology is improving, prices are declining (relatively speaking), and our culture is washed in advertisements and a “keeping up with the Joneses” mentality.
In this never-ending pursuit for more things, impulsive spending problems are common. Perhaps the credit card debt crises affecting millions of people around the world could be blamed on this mindset, but regardless of the core reason for our spending problems, one lesson stands out — exercising restraint when it comes to buying something (even food items) is enormously beneficial to your finances. The younger you learn how to separate the needs from the wants (and make your purchases accordingly), the better off you’ll be long-term.
Balance Is Key
Enjoy life now or later? Does it have to be a choice between the two? Sometimes it seems that way — when you’re young and the world is at your fingertips, it’s natural to want to live it up as much as possible before nuisances such as rent, bills, and a nine to five job come into the picture. The problem? Lack of money. Then there are your golden years, when you’re done with working. You're probably funded by Social Security at this point (and a 401(k) or IRA if you planned well), and the world is, once again, at your fingertips. The problem? Your body and level of energy simply aren’t what they used to be.
The key to solving both aforementioned problems is to find a balance in your life. Don’t waste away your youth by overworking in hopes of an early retirement. Of course, you also don’t want to get into the habit of spending everything you make, or you’re going to have nothing when it comes time to retire.
Balance comes from informing yourself about personal finance, knowing when to back off on saving, and knowing when to splurge a little and enjoy your youth while you still have it.