Women on Money and Mindset: 5 lessons for youths
By Teri Parker
A five-step primer to help young people learn how to manage their money.
1. Learn to live within your budget
The first step in managing your money is learning how to budget. Budgeting is the process of documenting the amount of money you receive and spend within a specific period of time. Usually this is tracked on a monthly basis. The goal of a budget is to ensure you are meeting your basic needs — and some wants — without spending more money than you actually have or will receive.
Start by writing down all of your income and expenses. This income may come from a part-time job or possibly your parents in the form of an allowance. Next, write down how much you spend monthly on items such as lunches, Starbucks lattes, movies, clothes, music, etc. Do you have money left at the end of the month? Or do you run out before the end of the month and need to ask your parents for more? If you have money left at the end of the month, you are living within your budget. If you are running out of money prior to the end of the month, you are not. It is key to determine why.
Maybe you can afford to buy a Starbucks latte once a week, but not three times. Some of your expenses may be for a need, such as eating lunch. It is your option to bring a lunch from home or to purchase it. Some purchases are wants, such as buying a new outfit or that Starbucks latte. If you are not living within your budget and need to reduce your expenses, your wants are usually the first items to reduce or eliminate. But not always. Maybe in lieu of buying lunch you choose to save money by […]