Financial Independence: Seize Youth and Secure Your Future
Making a financial plan in your youth is possible!
Discover easy ways to organize your financial life in your youth and save for the future.
During youth, a period in which we need to learn a lot, we are also shaping how the upcoming decades of our adulthood will be.
Therefore, it is essential to understand the value of money from an early age.
Starting to organize your finances as soon as possible is a way of self-care, because having financial control provides peace of mind and autonomy to build the life you want and reach your goals.
While it is common during youth to want to achieve independence quickly—such as moving out, buying a car, or anything else that represents freedom—it is important to stay calm and plan for financial stability.
It all starts with managing your monthly income and expenses, identifying where it is possible to cut costs and determining if they really make sense.
Use your money wisely
To ensure that you are using your money wisely, it’s important to analyze your expenses and question whether you truly need what you are buying.
For instance, if you have active subscriptions to more than one streaming platform, but only use one of them most of the time, does it make sense to keep both?
Perhaps it might be more advantageous to share a subscription with a friend or family member, reducing costs and saving money to invest in something more profitable in the long term.
When reviewing each of your expenses, you can uncover ways to save, such as cooking at home instead of frequently ordering takeout. This savings will allow you to have a reserve fund at the end of the month, avoiding the need to resort to loans.
Speaking of debts, one crucial point that you should pay close attention to is the use of the credit card.
Attractive purchases that require several months to be paid off often come with high interest rates, which can lead to you paying nearly double the original price.
Whenever possible, it is preferable to pay in cash and try to obtain a discount, or save money for a few months to avoid multiple installment payments.
Discover more about the interests
Another important point to consider is grasping how interest works. Compound interest, which accumulates and has a much greater impact over time, is distinct from simple interest.
Compound interests, which are applied on the principal value and previous interests, can lead to indebtedness, especially in situations like overdrafts, loans, or vehicle and real estate financing.
Accumulating a debt with compound interest is a risk, especially for those who are just starting their adult life.
However, interests are not always the big villains; they can also work in your favor through investments.
The same compound interests that can make a debt grow rapidly are the ones that can increase your returns on investments such as Direct Treasury or a CDC (Cooperative Deposit Certificate).
Therefore, it is worth exploring and learning about the different investment options.
In summary, to achieve financial independence at a young age, it is important to follow three steps: review your monthly expenses, avoid installment payments and prolonged financing, and study the best investment options to apply the money you manage to save.
Remember that youth is a crucial stage for laying the foundations of a financially stable and successful adult life.
Taking advantage of this period to learn how to manage money responsibly, avoid unnecessary debts, and make smart investments will not only allow you to achieve financial independence but also provide you with the freedom and security needed to fulfill your long-term dreams and goals.
Making informed decisions and carefully planning now will allow you to build a more prosperous and satisfying future.
