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Budgeting is the foundation of effective financial management. It’s crucial to track your income—whether it’s an allowance, gifts, or a paycheck—and categorize your expenses into needs and wants. Prioritizing needs is especially important but can be challenging for young people. Thankfully, many apps and online tools make organizing your money easier. Check with your banking provider to see if their tools can suit your financial needs.

Saving is a critical part of budgeting and essential for building financial security. It acts as a cushion for unexpected expenses. Allocate a set percentage of your paycheck—around 20% or more—directly to a savings account. Avoid dipping into your savings unnecessarily by maintaining a separate account for spending. Set clear goals for saving, whether it’s for a large purchase or future needs, and practice discipline to avoid impulsive buying. You might consider investing your savings to ensure it grows rather than remains idle, YFN will be discussing ways you can achieve this in future posts.

Financial literacy is the framework that supports your financial success. While the many terms and systems can seem daunting at first, starting young makes it easier to achieve mastery over time. Begin your financial literacy journey by exploring resources that teach essential concepts. At YFN, we recommend focusing on understanding credit and debt, learning the basics of investing, and staying informed about how global events, like inflation, impact your money.

The first steps to building strong financial habits are mastering budgeting and saving while gradually educating yourself about financial literacy. We’re here to guide you as you develop confidence in managing your first income and navigating the responsibilities that come with it. With practice and persistence, financial success is within your reach!