One of the supposed advantages of being young is that you have license to make mistakes. You’re carefree, sometimes reckless, and put off being responsible until an ambiguous and suspiciously indeterminate “future” comes along to propel you into an equally hazy “adulthood.”
There are some mistakes, however, that you don’t have to make. Mistakes that could, if left unattended, quickly define that nebulous future into a pretty ugly picture. Financial mistakes fit into this category, and with the exception of criminal activity, are the most important kind of mistake to avoid.
Luckily for the youth (and for the young at heart — or basically anyone with a heart) there have been advances in banking and personal finance technology in recent years that make cents (get it?) of your dollar troubles.
One of the best tech resources for managing your finances is a website called Mint.com. In a way, Mint an account aggregator: it brings all of your financial accounts together (young people read student loans, savings, checkings, credit card, auto loans, insurance, etc.) to give you a complete picture of your financial situation. They say knowing is half the battle, and in the case of finances, they are right.
Of the money mistakes that young people tend to make, the two worst are probably overspending and not understanding their real financial spending, and you can easily see how the two are connected. Though there are other culprits, credit cards contribute much to the overspending trend in young adults.
Credit card companies have figured out that college students are the perfect prey for credit cards because they are swimming in need and dying from lack of resources. So they target students while they’re still in school or just graduating and offer high credit limits (relative to college students) and letting them bury themselves in debt.
The Spend Trend
Mint.com (and the Mint iPhone and Android app) monitors spending across all accounts, and then analyzes it for members, showing spending trends, and giving personalized finance suggestions for an individual’s spending habits.
Trends are represented in charts or graphs, and lay out exactly where a member’s money is going each month. Young people especially have the tendency to underestimate what they’re actually spending on certain things (food, videogames, movies, books) because they don’t keep track of their purchases. This leads to an avalanching problem, because many of them are spending money they don’t even have in the first place (credit), making it difficult to know what their budget actually is.
What’s a Budget?
Mint also makes budgeting a breeze, and gives users the option of setting financial goals (such as paying off student loans) and gives real and realistic numbers showing the steps a member needs to take to meet those goals. And since Mint keeps track of all your accounts, you will always know exactly how much money you really have as well as how much you owe. Just to add icing to the cake, Mint will send alerts to users when certain conditions are met, conditions such as low funds, loan and credit card payment due dates, high debt ratio, and unusual activity — all things that young, easily distracted minds forget about all too easily.
Financial lessons are frequently learned the hard way. Sometimes this is just a fact of life, but many times you can learn the lesson you need to the easy way, just by tracking your finances. Whether you want to know how much you need to save a month to buy that new car, or you need help getting realistic numbers to help you stop spending on small things, Mint.com and other finance tech tools will help you learn the lesson without going bankrupt first.
This guest post is contributed by Lauren Bailey, who regularly writes for accredited online colleges. She welcomes your comments at her email Id: blauren99 @gmail.com.