Financial maturity and credit cards
Becoming financially independent as a young adult can be exhilarating and scary at the same time. You not only have to pay your own bills, but you must make decisions about how to save money and build wealth. While getting your first credit card may feel like you’ve finally become an adult, using it unwisely can demonstrate financial immaturity.
Understand the borrower/lender relationship
Obtaining credit is easier — and less expensive — when you demonstrate that you handle your finances well. While a spending spree may offer some enjoyment now, getting into a cycle of owing more credit card debt than you can pay can leave you at the mercy of your lenders. Handling debt properly includes timely payments to credit card companies every month.
Credit cards and lifestyle
You have control over your own spending behavior. Putting together a spending plan and budget can help you determine exactly how much you can afford to charge on a credit card each month. If you use credit cards, get into the habit of paying off purchases each month to avoid carrying credit card debt. If you keep your lifestyle within your budget, a credit card can be a huge asset to your financial picture now and in the future.
Avoid peer pressure
It can be tempting to try and keep up with what your friends are doing. But do not let yourself be sucked into a cycle of credit card debt simply because your friends want you to eat out or go for drinks every night after work. Even if your friends are careless with their finances, resisting the temptation to follow suit can help keep you on track with your financial goals and help them learn to better handle their finances as well.
Have no regrets
It is natural to feel rather invincible at this age, and you may think you have plenty of time to worry about saving money later. But the truth is that it is never too early to begin planning for your financial future. There are many people in their 30s, 40s, 50s, and older who wish they could start over again. Many of these people might tell you that one of the main reasons they are now struggling financially is because of immature financial behavior that contributed to high levels of credit card debt.
Your financial future
Even if you don’t make a large income, you can still build a savings and work toward larger financial goals down the line such as buying a home or starting a business. Remember that the choices you make about using credit cards today have the potential to affect your overall financial situation for years to come.
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