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Personal Finance for Teens

Stand Out From The Crowd

In the last unit, we read a beautiful quote from Benjamin Franklin. Like him, we all aspire to do great things.

 

However, there is one particular habit that segregates ordinary men from the creme la de creme fraternity. 

 

A reflection into the thought process of a foolish person:

 

Savings = Income - Expenditure

 

A reflection into the thought process of a wealthy person:

 

Income - Savings = Expenditure

 

This mantra shall serve you well for the remainder of your life.

 

No, this is not a rat race to finish at the top of the charts. Money, in itself, does not have any value, it is paper. Money is just the means, not the end. Financial planning is nothing but a healthy lifestyle. And we are adopting it to pursue the life we want to gift ourselves and our loved ones. 

 

We will also try to highlight a few other common mistakes youngsters make during their formative years. 

 

The most noteworthy among them are spending extravagantly on liabilities as soon as one gets a full-time job with a regular income.

 

What are liabilities?

 

On a personal level, all those materialistic things that do not generate any corresponding income can be termed as liabilities. This includes the dreams of every common man- fancy cars, electronic gadgets, sprawling bungalows, plush interiors, and everything else. All these expenses fall into the broader category of liabilities. 

 

It is not at all advisable to do. At a tender age, the propensity to save is high. This is because you do not have to cater to any fixed expenses. You have the full liberty to save a hefty chunk of your income ( unless the household isn’t running smoothly). As you grow old, you are more likely to be burdened with overheads such as rent, household bills, and every other frivolous item you can think of. 

 

In essence, the best time to start saving is as soon as you get a full-time job. Next, sit back, relax, and watch your wealth grow exponentially. 

 

Exponentially? How is that possible?- We will get to that in our upcoming units.

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