If there is one important aspect of life that young adults seem to lack sufficient knowledge of, it has to be personal money management a.k.a. financial literacy.

According to a recent MyPf poll, nine out of 10 adults state that keeping their finances in order makes them happier and more optimistic.

While it might be a daunting task at first, there is an instant payoff to learning how to manage your personal funds. In fact, sound personal financial planning will help you feel less depressed.

This guide will get you in the door.

Prioritise your spending

Prioritize your spending to ensure that you are progressing rather than just keeping the status quo. Create short-term goals for yourself, such as saving for a deposit on your first apartment or a car down payment, and make sure you put money away for them.

Remember your forthcoming school costs and make sure you have enough money set aside to cover them. Grants and student loans do not offset the majority of the education costs.

Start an all-cash diet

If you have a habit of excessive spending via online, this will help you get out of it. Many people’s lives were forever changed by the cash diet. Go ahead and give it a try. We promise you it is a lot less scary than you imagine it to be.

Never too early to save for your retirement

The earlier you begin saving for retirement, the longer your money has to expand and benefit from compound interest.

Time is a powerful lead for your savings, so putting off saving for a few years might dramatically shrink the amount of your retirement nest egg.

Compound interest will help increase non-retirement savings as well. For instance, you may be putting money into a high-yield savings account to save for a downpayment on a house.

The higher your interest rate and the longer you invest, the more growth potential your money has.

Live within your means

This seems to be one of the easiest personal finance principles to obey, but it may also be one of the most complicated.

In a consumer-driven world, it’s too tempting to live beyond your means; a reasonable rule of thumb is to save at least 15% of your income.

If you’re prone to overspending, consider paying for clothing and food with cash rather than a credit or debit card.

Set and stick to financial goals

To explain what you want to do with your money, use numbers and dates rather than just words. How much debt do you want to pay off? When do you want to do it? How much do you want to save, and when do you want to save it?

Get insured

You were covered by your parents’ health and auto insurance when you were in school. It is important to ensure that you have adequate coverage after you graduate.

Check with your parents first to see if they can keep you on their health insurance while you are in school.

Similarly, your parents may intend to keep you covered on their auto insurance when you’re at school, but you can’t count on it.

Use money apps

You can save money on overdraft fees by taking the time to balance your cheque book once a week. It will also assist you in avoiding a situation from which it will be difficult to recover.

Since the balance at the ATM does not represent all of the money you’ve spent, it’s easy to overdraw your account without realizing it.

It’s much easier to balance your account if you have an app that does both budgeting and account balancing.

Grow your rainy day fund

Okay, you probably don’t need persuasion that setting money aside for life’s never-ending stream of financial curveballs is maybe the greatest money stress reliever.

Setting a target for how much security you want to create in an emergency fund is the first step. It’s a safe idea to have three months’ worth of living expenses invested in an emergency account at the very least.

Save for retirement

Even if you have decades before retirement, now is the perfect time to start investing. The longer you wait to get serious about this big target, the more you’ll have to put in to ensure a comfortable retirement.

There is no single rule on how much you can save for retirement, but a good rule of thumb is to set aside a multiple of your income at various ages.

Having two times your income in your retirement account by the age of 35 sets you up for success.

By the time you’re 50, you should have six times your annual salary saved up, and by the time you’re in your late 60s, you should have ten times your annual salary saved up.

Be wise with money

When you graduate, make sure you’re making wise financial decisions. This involves paying the bills on time and weighing the pros and cons of taking on extra debt, such as for a vehicle or credit cards.

Starting with good financial habits will help you create a strong base. You will be ahead because of your wise decisions, rather than wasting years suffering from errors.

This article first appeared in MyPF. Follow MyPF to simplify and grow your personal finances on Facebook and Instagram.