How to Manage your Finances when You’re Young

Developing the knowledge and skills for money management is a life-long process, but it’s important to start as young as possible to take advantage of many concepts. Being in my early 20s, I can tell you that twelve years of public school and four years of college barely touched on the topic. Unless these skills are being passed down generation to generation in your family, it is going to take some effort to learn them on your own. It doesn’t have to be a boring process however, and the rewards are well worth it.

I started learning how money works from reading financial books when I was 19 years old. These were not textbooks, but personal finance and business books found at most retail bookstores and libraries. A few that made sense to me I later bought, and it is amazing after you get some life experience how the same book can have different meaning when you go back and read it again.

As far as authors, there’s a handful that I would recommend to almost everyone including Dave Ramsey, Robert Kiyosaki, Dan Miller, John Maxwell, Napoleon Hill, and Og Mandino. From a Christian perspective, the book of Proverbs in the Bible is the best business and personal finance manual I’ve ever read.

There is also the element of not just educating yourself but applying what you learned. I also started by first online business at age 19, and that helped me learn a lot that I don’t think I could have gotten from formal education or even working for an employer. It helped me take responsibility for my own career and future, and though I’ve had jobs since they have never been the only income I’ve had. That gives you options if you run into situations where most people would want to leave a job but can’t because of money.

In addition to learning how to increase your income, you need to know how to take care of what you have. A simple budget can help you with this. Budgets are not supposed to be highly restricting but give you an idea of where your money is going. For example, if you find you’re spending too much in a certain area, you can solve the issue because you’re aware of it. Think of your personal finances like you were your own company. If you’re sloppy with your money, it’s going to impact you long-term.

It’s also important if you want to be successful with money to set big goals and dreams for yourself. Getting out of debt as young as you can is important because it frees up more of your income to build wealth. I set a goal at 19 that I wanted to be free of a job before I was 30 so I could enjoy my life and could do things that could make a bigger impact than if my time was restricted. If you have a career that you’d love to do, find a way to work toward that. If you’re willing to focus and plan, you can accomplish more and get more out of life. It takes more initial work, but it’s worthwhile.