7 Ways You’re Burning Money
Most young people between the ages of 21 and 27 at some point start seeing an inflow of cash mostly since they have fewer responsibilities; no mortgage, no kids and they have fewer expenses to cater to. If any of the above applies to you, here are some things you should avoid.
While money makes things better in a relationship, it shouldn’t be the basis of the relationship, especially when it is not sustainable, because you have created a standard that your partner will come to expect and if you can no longer keep up, things become strained (Note that I am not a relationship expert either). Don’t be cheap, but keep in mind that money is not the only way to impress in a relationship.
NEW OR LUXURY CARS
According to the US Beaurea of Labour Statistics, people between the ages of 18-35 spend an average of $6,000 on vehicles every year, now for me, buying a new car in your 20s isn’t advisable, as a car is a depreciating asset, the value starts to decrease the moment you purchase it. I’d suggest buying a used car that meets your requirements that way you get more value for your money and you pay in cash. If you live in the city and rarely have to drive, then why get a car in the first place?
If you are not investing or saving towards your retirement this early, it means you’re going to be playing catch up by the time you’re in your 30s and 40s. For people in the US, I’d suggest taking advantage of IRAs and 401k if your employer offers that. Check out my post on Early Retirement
As someone that day trades, I am subscribed to a lot of chats and groups and every day the market is open, you’d see people calling out stocks they think will be going up or down, now while some of it might be true, for me to take that step and trade, I’d have to do my own DD(Due Diligence). So, when you get that tip from your friend about the new cryptocurrency that’s taking over the world, or the new real estate opportunity, even a stock tip, do your Due Diligence. “Invest, Don’t Speculate – Timothy Bock.
NO DOWN PAYMENT
I’ve seen this a lot with car dealerships and phone companies, they say no down payment and they put your monthly payment at a low price, but you end up paying it with a very high APR, these things add up. Pay in cash if you need a phone, if you can’t afford that, go for something nice and less expensive.
These are people who make less money but spend too much to look rich. Don’t get me wrong, faking it till you make it is okay for a bit, but there’s a point where it becomes spending outrageously on things you can’t afford. (Tip: next time you want to go out to the bar, try pre-gaming at home for a bit then that way you won’t have to drink a lot when you’re at the bar.) or just cut back on going to the bar to spend on people.
IGNORING YOUR PASSION
All men will eventually die, and I’m pretty sure we can’t take anything with us. So, when you work, try to save some to spend on your passion, something you like doing, for me it’s spending quality time with friends and family, which isn’t expensive (Okay, maybe a little if you count travelling costs). But save some money and JUST DO IT.
PS: I am not a Financial Advisor, neither am I a Relationship Expert, all these are personal views and goals I aim for as an individual. I am also not encouraging you to be a scrooge, at the same time don’t spend recklessly.