This research examines procedures for people who want to manage and plan for their financial future. It will increase the awareness of discretionary spending patterns among young individuals and how they can also improve its awareness. A discussion of how one’s motivated spending behavior can change to better align with personal values. Facts were gathered and reported to suit this research.
Analysis of the author’s self-reflection revealed that awareness of spending behaviors increased universally among individuals, and a significant proportion of individuals spontaneously modified spending behaviors to more closely conform to personal values. The author consistently reported the importance of a spending management tool in modifying spending behavior.
Money plays a crucial responsibility in everyone’s life and can provide a sense of security and happiness. However, overlay excessive emphasis on attainment of materialistic goals crowds out the pursuit of more substantive and more durable sources of happiness, such as family life and good health (Easterlin, 2003). Everybody at a point in their lives have ask themselves either one, two or all three of these questions on a regularly basis. Should I save? Should I spend? Alternatively, should I do both?
The many one conflicts I come across from young individuals is the desire to prepare for the future and save versus the impulse to live for the present and enjoy earnings now. People know that nobody guaranteed to live to see tomorrow, but they also do not agree to spend the rest of their lives with very little choices, or none at all.
Saving and accumulating financial assets for the future is one of numerous objectives that individuals juggle amid their adult years. A basic initial step that numerous may ignore, nevertheless, is securing what you currently have now, as completely as possible. Without satisfactory assurance, your money related future left with the danger of unexpected occasions.
Many college undergraduates lack basic financial management knowledge and skills while bearing ever increasing debt burdens upon graduation. Students need to be encouraged and become aware of their spending patterns and weigh those patterns against personal values.
Purpose of the Research
The purpose of this research is to teach young people the need for budgeting and saving to secure their financial future. This paper shows individuals how to save money while still enjoying their quality of life. Tips on how you should change your spending habits to save more and spend less were addressed. This paper allows the reader to realize that saving money is not something you try once but on a regular basis you need to make saving money part of your everyday business. If you want to enjoy a life free from burden of debt. This paper discusses why you need to start saving money and how to get started in savings.
Background of Research
Consider the experts findings that retirement savings should be an end goal with milestones along the way. Others have said that an equivalent of one year salary or more should be saved by the time you are 30. However, by the time a person retires, it is an essential idea to earn between nine and eleven times his or her salary in retirement savings. Nonetheless, it is wise to save between ten and fifteen percent of your annual salary to get on board a comfortable retirement as long as a low feed investment drive that is consistent to earning inflation beating returns.
It is a well known fact that numerous Americans are stressed over money. A few of us are stressed over how we will pay bills due one week from now. Others are worried about our long-term financial future. Here are only a couple of calming measurements from recent studies. In 2016, 60% of Americans stressed over not being able handle medical expenses because of a sickness. 64% of Americans in a similar review stressed over not having enough to pay for retirement. A full 34% were worried that they wouldn’t have the capacity to pay their rent, mortgage, or other housing costs (Hayes, 2017).
Another survey demonstrated that 16% of workers burn through at least 20 hours a month on the job agonizing over their finances. One 2015 study found that 70% of understudies were worried about funds. Unmistakably, a considerable measure of us is extremely worried about our personal finances. Fortunately, regardless of whether you’re in a monetarily troublesome place, you can find a way to gain back in power (Hayes, 2017).
A report from Market Watch in 2017 found that half of American households presently live by paycheck after paycheck. There were only nineteen percent with zero dollars saved to cover an emergency expense and thirty-one percent have lower than five-hundred dollars in their emergency savings. Nevertheless, about forty-nine percent of Americans are worried, anxious or fearful about their not so good up to date financial well-being. Not blaming low income for their financial hardship, only one in five people which are twenty percent are faced with financial hardship fall below the poverty level and make lower that forty thousand each year.
The Federal Reserve has listed the average personal savings rate in the United States to be at 5.6 percent as of February, 2017. This report means that the average American household saves just above half of what a normal individual savings should be. The experts recommend a normal individual’s saving to be ten percent of your income.
Examination of Research Question
A reason for a financial plan can be as a form of protection for bad times because life is not always a bed of roses. It is always of a great significance to have an emergency fund. Planning the right way in good times will balance you off through bad times.
Make a plan
Know the things that you want to save and invest in. whether be it a car, an education, a retirement plan, your children, medical or other emergencies, periods of unemployment, and caring for your parents. Having your own lists with the most important ones first, you will be able to identify which are the most crucial ones to you. Therefore, know how many years you have to achieve your desired goal because you will need a savings or investment option that will match your schedule for each goal.
Know your current financial situation
Save more to accumulate wealth by creating a budget if you do not have one. This budget will assist you with a useful disposable income for saving and you will therefore, be able to reduce your monthly spending. Know what you own (assets) and what you owe (liabilities). Having able to subtract your liabilities from your assets will help you to determine your net worth and keep an updated one every year. Nonetheless, it is usual to track your income and expenses for every month.
Pay yourself first
Most importantly pay yourself or family first. There should be a separate category for saving and investing. Cutback on your expenses if you are spending all your income without saving or investing because everyday expenses that do not need to be purchased could add up to a massive amount in your savings over a one-year period. Your money can grow over that same period called compound interest if you control how you spend and save on a regular schedule. This is referred to the interest on the money that you saved and earned.
Enroll in benefits
The structure of a sound financial plan commences with the protection of you and family, and ensuring that they are sufficiently covered. Your financial planning should begin at work if your employer offers you 401k and or other benefits. There are benefits such as health-related insurance and life insurance or disability income insurance that will protect your finances.
Invest in a brokerage account because it could be an easy way to keep track of your money and control your financial life or Invest in mutual funds as a cost effective way through stocks, bonds, short-term investments or other investment products that are managed by a professional fund manager.
Suggestion/Implementation of Proposed Change of Life Style
For a fact, money does not grow on trees but it can however, grow when I save and invest wisely. Having knowledge about the way to go about securing my financial well-being is a great significance a person will ever need in his or her life. I do not need to be a genius to get it done but having basic knowledge followed with a plan, will get me on my way. It is essential to educate oneself on opportunities no matter the situation of the amount of money you earn.
A few persons may fall into financial security, and or a business may take off. But the only way to attain financial security is to save and invest over a long time span. Time after time with the ongoing plan, I will eventually reach financial security and enough to purchase my dreams such as buying a home, open multiple businesses, educational opportunities for my children, and a comfortable retirement. If people did it so can I enjoy the benefits of managing my own money.
Whether you are sailing through college or mid-career or even on the verge of retirement, it is always essential to have a future plan. A financial plan helps one reach closer to their goal and for protection of financial well being. A person is never too young to start saving or making any future plan. Young individuals need to take action to minimize any future impact. Windows of opportunities are open for young individuals to learn about personal finance (Mae, 2009). Based on the findings, educators, administrators and parents can assist young individuals’ effective ways to manage the way they spend. Investing in your future today may turn out to be a better retirement tomorrow.
My money has become my employee and that makes me the boss of my money. I will keep a close eye on my employee and watch its progress. Everyone knows that bad habits are usually difficult to break out of. When it comes to spending, a bad habit could make all the possible differences towards your personal finances.
First I will understand my history because previous influences in life has judged my spending habits and figure if there are any patterns that I may still pursue today that needs changing. I will take notice and action to make a conscientious effort to end any of my bad habits that I may be exposed to.
Secondly, I will make a list of the important things in my life knowing my values will help me align my spending habits with my goals. Then I will be able to evaluate my money decisions against it. I would also track every penny of my spending to see where my money goes. I would definitely have a budget created to plan where all my money should go and that my money is being utilize the way it needs to be. I will set financial goals to help me not overspend and save for that vacation I plan to take and grow my house fund for my down payment on my dream house.
Whenever I am deciding to make a purchase I will think twice before going ahead with the purchase and figure out a next alternative that will leave me with more money in my purse. I will be aware of what triggers me to spend and break out my bad habit. I will also avoid these negative triggers that would lead me to spend unwisely. Knowing what I need and knowing what I want has differences. In other to save more and spend less, I will look at what I really need and eliminate spending on some of my wants. Not forgetting to speak with a financial advisor which is an expert on matching your goals and set and execute a retirement plan.
Currently among young individuals, the economy plays a crucial part in forming financial values, attitudes, behaviors and even life goals. Given that young people have little experience in making personal financial decisions and this study contributes to their need for financial education and financial planning. Helping young people like myself cope through strategies that may help them avoid overspending and establishing a lifelong pattern of effective financial security and decision making for a successful future. A person who set goals and develop a plan for their future achieves them successfully and ends up with more wealth. Planning helps you be in control of your life.
Also planning for your future finances help you achieve a lot more than you planned for to achieve and will most importantly gain financial independence and security. Having a financial plan is like a road map to your future success because it gives you awareness of where you are and how to get where you ought to be. If one has an understanding of his or her priorities, they can achieve an independent financial life. Remember, the investment you can make in yourself, will pay off big in the future.