Common Financial Mistakes That Young People Make

Young people tend to make quite a few financial mistakes due to their ego and lack of experience. If you want to become more skilled with handling money, it is important that you learn about some of these mistakes and how to avoid them. Getting this information can mean securing your financial future and avoiding lots of problems that have become all too common with millennials.

Misusing Credit Cards

Perhaps one of the bigger financial mistakes young people tend to make is misusing their credit cards. Obtaining a credit card can be a very good idea, but only if you use it properly. You shouldn’t treat these cards like free money, because they aren’t. It’s incredibly important to stay on top of your credit card payments to avoid going deep into debt. It is also crucial that you have a have a full and complete understanding on how this line of credit works before using it. When put into the wrong hands, a credit card can be very damaging to one’s finances over the short and long term.

Failing to Take Advantage of Discounts

When you actually spend some time looking around, there are many discounts that you can take advantage of for just about everything. Whether you are buying theatre tickets or even a new car, it’s important to look for the discounts. You will quickly discover that these discounts can provide you with some pretty major savings. The more time you spend looking into these options, the more money you will save over the years.

Buying a House

There is nothing wrong with wanting to own a house, but doing so at the wrong time can cripple you financially. A lot of young people are making the horrible mistake of taking out a home loan they really cannot afford. Even getting one of these loans without putting down at least 20% is a huge mistake. You should take the time to review your financial situation before making this kind of life-altering decision. The last thing you want to do is to make such a big commitment before thinking everything through.

Not Maintaining an Emergency Fund

Everyone should have some funds set aside in case of an emergency. You don’t want to find yourself stuck in a situation where you really need money that you just don’t have. Make sure that you take a little bit of the money you make with each pay check and put it in a separate account. It is always a good idea to have a savings account at your bank that is dedicated to financial emergencies. Those who have some money set aside will be able to reduce their stress level quite a bit.

Neglecting Smaller Expenses

The fact is that all of these little expenses that you have on a daily basis add up. Whether it is buying a £4 cup of coffee at Starbucks or something else, you need to keep track of the money you spend. You might find that you are actually living beyond your means, and it will eventually catch up with you. If you find yourself struggling with money sometimes, it might be a good idea to take stock of your regular expenses and reign in your spending.

Not Refinancing Loans

Sometimes it is a genuinely good idea to refinance a loan you have. If you feel like you are paying far too much for your loan, you should seriously consider this option. Auto loans are the most common to be refinanced, but you can do this with any type of loan. This is not a worthwhile option for everyone, but it could help you quite a bit. The same goes for payday loans and other short term finance arrangements.

Poor Budgeting

It is quite common for young people to budget poorly or even not at all. If you do not have a solid and realistic budget in place, you are bound to have serious financial problems at some point. You should take some time to write down all of the recurring expenses you have. This will give you a basic idea about whether or not you can afford something like a new car or a nice flat screen TV. Use your budget to avoid making financial mistakes that could end up crippling you for a long time.

How does a Young Person Stay On Track Financially?

If you are a young person who has money problems or just wants to be fiscally responsible, it is important to learn from others. You should use every opportunity you can to learn from your parents and other people who have more experience than you with managing finances. It is also important that you never spend what you cannot afford to, because you will just end up regretting it. These simple but useful tips can help you stay on track financially.

How to Make a Hefty Profit form Just £1,000

There are many different ways to take a simple £1,000 and make a very decent profit if you know what you are doing. There are very few certainties in the world of investment, but there are certain methods you can use to increase your chances of success. The fact is that it doesn’t always take a huge investment to make a lot of money.

Get Involved in Peer-to-Peer Lending

Peer-to-Peer or P2P lending has become wildly popular in the UK in recent years. It is when people ask the general public for the funds they need, similar to crowdfunding. Anyone can become a lender with this arrangement. When you lend money to someone, you will (hopefully) be paid back with interest. If you are going to use this method, it is important that you find reputable people to lend to. Lending even £1,000 to someone could yield a quick and tidy profit.

Use the Stock Market to Your Advantage

While the stock market can be quite volatile, it is important that you consider using it to your advantage with the money you have. You will of course want to spend some time reviewing your investment opportunities before choosing any stock in particular. The more you know about how the stock market works, the more effectively you can protect yourself against losses. It is crucial that you analyze market trends and forces before making a final decision.

Mutual Funds

Mutual funds are essentially an accumulation of money that comes from numerous investors. These funds are managed by a qualified professional, who invests in a number of different types of stocks.

There are lots of these funds to choose from, so you need to carefully review your options. The last thing you want to do is to choose the wrong fund, because you could quickly lose your £1,000. This can be a safer way to utilize the stock market, because you will have an experienced professional making decisions on your behalf.

Investment Trusts

You will find that investment trusts are sort of like mutual funds in the sense that they both pool money from multiple investors like yourself. The difference between these two types of investments is that trusts can be purchased and sold like traditional shares. One of the great things about investment trusts are the low fees. This is a fairly safe investment, and it can be quite profitable if you can be at least a little patient.


Exchange-Traded-Funds or ETFs offer another good investment opportunity that you might want to take advantage of. These securities track indexes and you can buy and sell them just like normal stocks. These funds do not have any professionals choosing the stocks, as they work by tracking a simple index. This means that you won’t have to worry about paying any steep fees like you might with a mutual fund.

Pay Off Your Debt

If you have recently come into some money, you should think about using it to pay off your debt. Once you no longer have to worry about paying back creditors, you can start to actually save up money from what you make with each pay check. It can be tempting to take your money and do something fun with it, but paying off your debt will benefit you in the long term. The less debt you have, the more money you will be able to retain on a regular basis.

Invest in Yourself

Sometimes the best thing to invest in is yourself. If you want to go back to college, you should consider putting your £1,000 towards earning a degree. Once you graduate your money making potential will be far higher. This is by no means a high way to start earning more, but it is a good investment nonetheless.

These days most people underestimate the value of a good college education. It’s true that you will have to spend a decent amount of money, but it is well worth it in the end. Just make sure that you choose a reputable school to attend so the degree you earn is actually worth something.

What to Consider

There are a few important things to consider when choosing the right way to invest your money. You will need to know how big of a risk you are taking and what you can do to minimize it. Almost all worthwhile investments come with risk, but it’s not always on the same level. The more you learn about this, the better able you will be to make the right choices. Some people are willing to take more risk than others with their money, so you need to figure out what your priorities are. There are lots of safe investments that guarantee a return, but it’s usually modest profits over a long period of time.