October 2009     Premier budgeting company MyBudget says young adults who make smart financial decisions now will reap the rewards later in life and guard themselves against money woes.

There are plenty of possible pitfalls for those leaving school to head out into the world as adults, including credit schemes, mobile phone plans and home loans.

MyBudget director Tammy May said she and her consultants regularly see young adults already in financial difficulty after making unsound decisions. "One of the first steps people should take when they begin to take on more financial responsibility is to track their spending and draw up a budget," Ms May said. She said there were definitely traps for young people to be aware of that were tempting because they offered a quick solution.

"The buy-now-pay-later deals can be a great way to get some needed furniture or appliances but many people in this age bracket get caught out with huge interest rates and repayments they may not be able to afford," Ms May said. "The same goes for credit cards because it is my experience young people should not sign up, and if they have they need to pay it off and then begin using a debit card."

She said it was an important lesson to learn to spend only what you earned. "I have personally seen many young clients who have found themselves in hot water over enormous mobile phone bills," Ms May said. "All of a sudden they receive a large bill they can't afford to pay by the due date and their phone is disconnected, yet if they are on a contract they are liable to pay it out in addition to their bill."

She said when considering large purchases or financial commitments it was important to shop around and ensure the cost was within the budget. "If you are comparing home loans, use a trusted mortgage broker who perhaps is recommended by friends or parents," Ms May said.

Websites such as www.canstar.com.au offer comparisons on interest rates, credit cards, bank accounts and insurance.

She said young adults could help themselves to prepare for this new stage in their life by speaking to their parents about budgeting and understanding the difference between wanting and needing something. "It is so important for people at this age to realise spending habits are just as important as saving habits," Ms May said.

MyBudget is Australia's premier personal budgeting company, which assists clients by managing their finances, teaching them to break bad financial habits, achieve their financial goals, reduce debt and save money.

From a media release by Seeking Media, October 9, 2009.

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