Money Management: It Starts Young
Personal finance starts early – even as early as your teens. By using careful planning, common sense, and a little strategy, you can make sure that your finances do not rule your life:
1. SAVE MONEY (YOU WILL NEED IT): Saving money is the first and most important money lesson you can learn. Too often, people fund their lives through credit; however, when you have to rely on credit to get the things you need, you are in no position to save and your financial position overall is weakened.
2. SAVINGS ADD UP QUICKLY: Many people shun saving, especially when they are in school and income is very limited, but you would be surprised by how quickly even $10-20 per week adds up ($500-$1000 a year), making it more than worth your while.
3. BUDGET WISELY: That said, the problem is that many people budget their full salary, living stipend, or allowance instead of budgeting to save and budgeting for known upcoming expenses. For instance, it is very likely that you will need to buy a new coat every year, so begin putting aside $10 per week in August; by the time the cold weather hits, you will have more than enough to buy a new coat.
4. GO FOR BARGAINS: Smart personal finance also involves focusing your spending on sale items, promotions, and coupons. If you limit your spending to only discounted items, you can save 20-30% of your shopping budget.
5. KNOW THE DIFFERENCE BETWEEN WANTS AND NEEDS: Focus your spending on your needs instead of your wants to save even more money. Remember, a want may fulfill a need (e.g. You want a new coat because you need something to keep you warm), but buying that $500 coat is not a need.
6. DON’T BE AFRAID TO ASK FOR HELP: If you are having a hard time getting your finances under wrap, don’t be afraid to ask for help. There are many financial literacy programs being offered throughout the country, many free of charge. Similarly, if you have gotten yourself into debt and you are unsure how to get out, ask your parents, or apply to a lender – if you have a job – to loan you the money to repay that debt.
7. BE CREATIVE ABOUT HOW TO PAY FOR SCHOOL OR TRAINING: Think also about how you will pay for school. Paying for school or job training is much more complicated than contacting your local bank for a school loan – at least it is if you want to be able to readily afford college. Look to government-based programs such as income based repayment, honors programs that take a percentage off your tuition just for taking a few honors courses, or scholarships (a great option so long as you begin applying early). These sources can greatly reduce your total tuition bill, saving you tens of thousands.
Posted at "The Credit Blog" by Chris.