Being single gives you an enormous freedom to spend on the things you always wanted to. The end of the long battle searching for a job is certain to provide you with a regular source of income. A regular cash flow of a handsome salary comes with the independence of thinking cum spending beyond needs and which is completely feasible.
Most of the youths who have newly started earning and out of any financial responsibilities tend to take money matters lightly. Because of being undisciplined with money, a huge number of youth professionals find it difficult to manage their money. The last week of almost every month turns to a nightmare for them as they have to struggle hard to meet both the ends.
When you are single and you are earning well, it is the best time to save for the rainy days. This is the best time to invest your money as you are earning a quite good amount without any financial responsibility. But most of the singles not only fail to invest, but they also find it difficult to bear the living cost in spite of earning a good salary. Such situations are the results of bad money management. If you are single and undergoing similar situations then let’s take a tour of money management rules to improve your personal finance.
Top 7 Pitfalls of Money You Should Avoid When You Are Single
- Untracked Expenditure
The biggest money pitfall of singles is spending without tracking. When you keep on spending money without making a note on it, you will be wondering at the end of the month when and where your money has been evaporated. Running out of money on the last few days of the month is a common situation for many singles. To get rid of the cash crunches that come at the end of the month, you are to keep a record of expenditure right from the beginning of the month.
- Failure to Live By a Budget
In an ideal situation, every person should make a budget for monthly expenditures and follow it. Making a perfect budget where you have made the right division of money is easy but sticking to it is difficult. Many a time we tend to spend on products or services which is beyond our budget. Sometimes, we just can’t resist ourselves from buying those things which were not on our purchase list. Such kind of failure to live by the budget is nothing but another money pitfall to avoid.
- Not Keeping an Emergency Fund
When we keep some amount aside to use in unexpected or unplanned situations, it is called emergency fund. Most of the youths are lacking emergency funds. Living without emergency fund can end up in debts or credits. So it is advisable to have an emergency fund so that unexpected expenditure don’t leave you with a debt.
- Lifestyle Expenditure
A huge share of earnings of singles is spent in maintaining the lifestyle. Buying the dresses only because they are in trend, using cabs instead of public transport, regularly visiting restaurants, pubs, outings etc fall in the category of lifestyle expenditure. If you want to save money or use your hard earned money in a more productive way then you are to control your lifestyle expenditure.
- Making Late Payments
Paying your bills late is just another example of undisciplined financial habits. It is not that most of the young professionals are unable to pay their bills but it that they neglect the payments. It is a habit of most of the youths that they pay bills on the last date. Sometimes even they forget to pay on the last date too. Missing your payment make you pay a penalty for it as well as creates a negative impact of yours.
- Failure to Learn about Investing
The youths and investment are like two banks of a river. Most of the earning youths think that they are too young to invest. But this thinking is not correct at all. Indeed this is the best time to invest. As there are no financial liabilities on you, you can invest in the plans which have more risk but fetches a higher return. Such high risk associated investments have the potentiality of giving a really high return.
- Borrowing Beyond your Repayment Capacity
Any kind of borrowing is a subject to paying back to the lender with applicable interest. Many a time singles are found to borrow a very big amount without gauging the ability to repayment. Most of the times, such situations occur with credit cards. Keeping on using a credit card can create a heavy debt burden on you. Being unable to pay your debts or getting debt trapped while you are single is a very bad remark for your credit history. One must avoid such credits which can be difficult to pay back.