Growing up, I was not concerned about matters related to financial management since my parents often intervened in situations that involved finances. However, at adolescent stage, the desire to be independent changed my perspective on financial management. As such, I began to save in order to take care of my financial needs instead of depending solely on my parents and older siblings (Xiao et al. 398). Saving money necessary to attend to my needs was a challenging process as I was a spendthrift. For a long time, it was almost impossible to stay afloat as I kept engaging in impulse buying and I was constantly broke. As a result, I kept seeking financial help from significant others even though I desired for financial independence. My struggle in terms of managing my finances got worse when I joined college, which was far from home and had to relocate.
Financial Challenges I Have Overcome in My Life
As a common norm, when one approaches adulthood, there is a desire for financial independence from significant others such as parents or older siblings (Shim et al. 716). Subsequently, one is bound to start contemplating how to lead his or her life, separate from significant others. Important issues to consider in achieving such a goal is financial stability that can sustain one away from home and avoid depending on parents' financial support. In this regard, the first agenda that often comes to a young adult's thought process is how to secure a job to improve his or her income status as an individual (Shim et al. 721). However, the challenge that often grapples a young adult trying to save money to make life-changing goals is impulsiveness (Xu 39).
Youthful life is characterized by a desire to explore new things as one search for a sense of identity. Consequently, some of the financial decisions that a youthful person may make are often irrational without the consideration of eventual outcomes. In this respect, one seldom make the right decision regarding appropriate management of his or her finances and may struggle without financial assistance especially in situations where one has left home and supporting himself or herself financially. In a scenario where a young adult has left home and is trying to make a living on his or her own, lack of experience on how to save hard earned money can cause numerous financial problems. For instance, the youth are accustomed to impulse buying and most products and services today are increasingly targeting the youth due to their buying behavior such as willingness to spend on new and popular products and services in the marketplace. As a result, spendthrift behavior often leaves a significant number of young adults without money to cater for their basic needs and are constantly forced to seek for financial assistance from family members and friends (Xu 41).
Myself, I have struggled with impulse buying and been unable to save money on numerous occasions. Consequently, I have often found myself in situations where I cannot meet my financial obligations as an individual. Having left home when I joined college, I decided to rent an apartment and was successful to secure a job that I thought could make me financially independent and avoid seeking financial help from significant others. However, due to my spendthrift habit, I struggled to pay for my expenses such as rent, buying food and medical costs. Even though student loan covered my tuition fee, I still struggled to pay for meager expenses because I could not manage to save money that I earned from my side jobs while attending college.
Eventually, life became unbearable away from home and I ended up transferring my credits to a college near my parents' home since I resorted to depending on them for my financial needs. While at home, I still had financial needs that I was not comfortable burdening my parents. As such, I secured another job, hoping to save and avoid depending solely on my parents for all my financial needs. Still, I could not manage to contain my overspending habit and was often broke despite having a job and not obligated to pay most of my expenses since my parents often stepped in to lend a hand. As things got worse for my financial life, I decide to seek help from my elder brother who is leaving independently without assistance from our parents. I shared with him the spending habit that often leaves me without any coin and thus being unable to manage my own financial needs. Through his advice, I learned the necessity of having a budget to avoid overspending (Gutter and Zeynep 708). In most of the occasions that I spent all the money I earned from my side jobs, I never prepared a budget for my expenses. Further, my elder brother also enlightened me on the need to align my savings with lifelong goals (Shim et al. 722). He also shared with me the necessity of opening a bank account such as savings account where I could only withdraw occasionally compared to having all the money in my wallet. In our conversation, my brother also shared various ways on how I could invest the money that I earned from my side jobs to give me some level of financial stability (Babiarz and Cliff 43). In essence, major financial hurdles that I had to overcome were overspending and compulsive buying.
The Lessons that Overspending and Impulse Buying Taught Me
Overspending makes it hard for one to save because being a spendthrift often leaves an individual without a coin to save. A spender also tends to ignore factors such as considering costs against the benefits of spending on a particular product or service. As a result, one may end up spending his or her hard-earned money on a product or service that may not add value to his or her life. On the other hand, impulse buying as I have learned is mostly influenced by lack of a proper budget on what to buy. As such, one may end up making purchases that he or she had no prior plans thus compromising plans to save for other important financial needs (Babiarz and Cliff 45).
Overall, I have learnt that in order to avoid being caught in a financial quagmire, it is important to have a plan on how to spend money in tandem with well-defined lifelong goals. Similarly, preparing a budget on how to use money gives one a clue on the expected amount to spend on daily expenses as well as save from receivable income. In addition, one should consider the available methods of saving offered by financial institutions that range from opening savings account to investing in assets, shares and bonds as a way to improve future financial status necessary to manage constantly changing financial demands over the duration of an individual's lifetime.
Babiarz, Patryk., and Cliff A. Robb. "Financial literacy and emergency saving." Journal of Family and Economic Issues, vol. 35, no.1, 2014, pp. 40-50.
Gutter, Michael., and Zeynep, Copur. "Financial behaviors and financial well-being of college students: Evidence from a national survey." Journal of Family and Economic Issues, vol. 32, no.4, 2011, pp. 699-714.
Shim, Soyeon., Jing J. Xiao., Bonnie L. Barber., and Angela C. Lyons. "Pathways to life success: A conceptual model of financial well-being for young adults." Journal of Applied Developmental Psychology, vol. 30, no. 6, 2009, pp.708-723.
Xiao, Jing Jian, Swarn Chatterjee, and Jinhee Kim. "Factors associated with financial independence of young adults." International Journal of Consumer Studies, vol. 38, no.4, 2014, pp. 394-403.
Xu, Yingjiao. "The influence of public self-consciousness and materialism on young consumers' compulsive buying." Young Consumers, vol. 9, no.1, 2008, pp. 37-48.
What are some common financial challenges faced by young adults?
Young adults often face difficulty when it comes to managing their financial independence and expenses effectively. Impulse buying and overspending can become serious obstacles to saving money and meeting obligations on time.
How can overspending and impulse buying affect one's financial stability?
Overspending and impulse purchasing can make saving money and reaching financial goals challenging for individuals. They could spend their hard-earned funds on non-essential products or services instead, leaving no funds for meeting essential needs or saving for the future.
What strategies can help overcome overspending and impulse buying habits?
Planning ahead by creating a budget that aligns expenses with long-term goals can help individuals avoid overspending and impulse buys. Establishing plans for spending and saving, opening savings accounts and exploring investment options can promote financial security while helping individuals manage changing demands in life.
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