As teenagers become adults, the school of hard knocks has a way of teaching about money and personal finance. Advertising to young adults is intense, with new gadgets presented as “must haves” every other day. Without the development of basic financial literacy, the pull towards consumerism can lead to overspending and financial troubles before you even get out of the gate.
Young adults who establish strong financial skills early on will develop positive spending habits. For many high school and college students, money management equals sacrifice and deprivation. In reality it is more about having control over your money, and who doesn’t want more control.
Essentially managing your money means you decide what is important and where your money will be spent. Instead of reacting to a friend’s request or a commercial advertisement, you make a conscious decision about what is important to you. Money is a tool that enables you to obtain things or experiences based on your priorities.
Those who learn to manage money effectively will achieve financial milestones much faster than those who are controlled by the enticements of instant gratification. A few traits, that when developed, enhance the ability to manage money efficiently include:
Delayed gratification. Technology provides access to communication and information instantly, and the concept of instant gratification has spread to nearly every aspect of life. There is little patience for things that do not come immediately. Yet the best and most valuable things in life come with patience. Relying solely on willpower does not bring success. Having a plan or goal reduces the urge to buy something right now.
Goal setting and developing a long term view of what you want your life to be like. When the focus is purely on today and what is happening now, it can be difficult to plan ahead. When you have no goals you may find yourself five years down the road, wondering how you got here. There is a tendency to go where the wind blows rather than having more control over your life’s direction. Most long term goals cannot be accomplished without planning. Set future goals with more immediate milestones to remain focused and measure your success.
Volunteering allows you to see the world from a different point of view. Everyone is raised a certain way and that creates a certain perspective on the world and sets your expectations. Helping others gives you the opportunity to see the world from someone else’s perspective. This alternate view of the world can help you decide what matters most and can give you a clearer vision of what your life and financial goals should be.
Self-Control will help in every area of your life. The interesting thing about control is that nearly everyone wants more control over life events, but very few are able to obtain it. Finances are an area where you have the ability to control spending, saving, and to some degree earnings. There will always be constant pressure to spend money. Companies spend billions of dollars trying to convince you that their products will make you smarter, sexier, and more successful. Yet at the end of the day, chasing consumer goods for satisfaction is a losing game. Having self-control over spending allows you to be more deliberate and is more satisfying than owning the newest electronic gadget.
Developing traits that also establish positive money management habits will always benefit you. It will provide the discipline to make wise choices and the foresight to prioritize spending, leading to greater financial success.