When you think about personal finance wisdom, you may envision suggestions that have been passed down from generation to generation. However, advice in its more nascent stages may actually guide you in a more appropriate manner.
Put Down 20 Percent
In many communities, the cost of living has been steadily on the rise. As a result, people are paying more for rent and for expenses even if they are currently residing with their parents. Trying to wait until you can save up 20 percent for a home could take forever. It’s also unnecessary to do so. Plenty of plans are available for people who want to purchase a house and do not have 20 percent saved. Even when you do have that amount of money saved, you may want to keep a significant amount of it in the bank for protection in the event of an emergency.
Have One Parent Stay at Home
Gone are the days where most households had only one income. It simply isn’t possible for most individuals given the current costs of living. Right now, you might be thinking that it would make sense to save on childcare costs and to stay at home or to have your partner stay at home. However, when you calculate the numbers, you may discover that you will actually be losing a decent amount of time. As you planning to start a family, it’s a good idea to keep in mind the fact that both of you will probably have to work.
Don’t Make Any Charges
When you are struggling with credit card debt, you may want to stick all of your cards in the freezer. Taking this step could be useful for some of your cards if you are handling multiple sources of debt, but you do want to have credit available in the event of an emergency. In fact, you could use your credit card to your advantage if you are smart. You can make purchases on the card, pay them off immediately and use the cash back to tackle your debt.
Take out a Large College Loan
If you talk to people who took out college loans and are now in the job field, they may very well advise you against procuring a huge loan for your education. These loans can take a lifetime to pay back. Even if you think you can handle the amount now, that may change once you are actually out of school. Instead, look into state schools. With new programs, you may even have the ability to attend college for free. If you want to go to a private institution, work on your grades and look for private scholarship opportunities.
Only Lease a Car
Leasing vehicles is tempting because you get to essentially have a brand new vehicle every few years. However, you don’t always have to go this route even though it has been popular for awhile. Consider financing a car instead. By doing so, you will eventually reach a period of time where you don’t have car payments. Then, you could also put the car up for sale once you are finished with it. When you are deciding between leasing and financing a vehicle, take into account how much money you will save or make in the long term. Cars do not necessarily need to be replaced after just a few years.
Your parents and grandparents might pass on personal finance wisdom to you. It is not as though you must entirely ignore them, but you should keep in mind that the world has changed in many ways since they were younger.
Photo: Franck Michel / CC 2.0