Financial literacy is a staple in adult life, but many admit they don’t have the necessary knowledge. AND survey he showed it one in three American adults feel they lack financial knowledge.
Reporter Steve Liesman and finance editor Kelli Grant put together the list CNBC Make It with the keys to managing money that young people should know before they turn 18.
Identify your individual goals
Finance is a personal matter and as such it is very important that you are always clear about your long-term goals.
Buying a home is a very common long-term goal, but it may not be the best choice if you plan to travel for a long time, they explained.
Invest if you can
Billionaires like it Warren Buffett They are investment professionals and see this world as opportunity to create wealth or some extra income. The way to maximize the benefits is to keep the money invested as long as possible, but always know your financial reality, he explained.
Invest what you can afford to lose, it’s very easy to end up in the red. To avoid this, write down all your expenses or you could end up with countless lottery winners who go broke within a few years.
Understand the difference between wants and needs
Impulse purchases are tempting, but they’re not the best idea if you want to save. CNBC Make It emphasized the importance of distinguishing between wants and needs.
Once you’ve covered your basic needs (housing, food, transportation, bills, etc.), you can buy concert tickets or book a trip.
Don’t be afraid to talk about money
The topic of money used to be taboo, not even talked about. This ends up creating a dynamic of ignorance that does not favor less educated people.
Talking about money with people you trust or experienced colleagues can help you understand how does a mortgage work or investment risks.
Financial habits you absolutely must have, according to a senior manager at Banco Mediolanum.
“If you don’t understand something, ask,” Liesman and Grant advised. If your pay is lower than you thought, you don’t understand deductions, or you’ve been charged for a service you didn’t bargain for, You need to be informed to be able to make intelligent decisions.
Learn to negotiate
When it comes to money, employees want to work less and get paid more, and companies want to save on wages. Once you have the experience needed for the position, you need to learn it negotiate your salary If you find it low or claim bonuses.
Something similar happens in aspects like renting a house or buying a car. Most of the time it won’t work, but the worst that can happen is to say no.he explained CNBC Make It.
Find free or cheap hobbies
Entertainment may be central to your life, but it’s important to manage your money in the beginning. It’s a good idea find free activities and surround yourself with people who have the same financial interests as youwho likes to spend time outdoors, volunteering in organizations, playing sports, or watching movies.
“If you’re saving for a trip, but your friends want you to go out every weekend or buy new clothes every month, it can be difficult to meet your goals,” Liesman and Grant say for CNBC Make It.