Basic Money Management 101

Basic Money Management

Don’t let the idea of learning to manage your money scare you. Anyone can do it, and just remember that you’ll be improving your life by doing so. Once you learn the right techniques and get the right tools to help you, you’ll have no trouble managing your money. Think of it as a game, you just need to learn the rules and you’ll be winning in no time.

There are basically nine steps or ideas that you will need to get your money plans in order.

9 Basic Money Management Principles

1. Get ready for a change – Starting basic money management techniques can be hard, but if you accept that your current habits aren’t work, you will be ready to move forward.

2. Surround yourself – Find a community of people in the same situation you are, either through an online message board or even friends in real life.

3. Examine your situation – Take time to see what you’ve been doing in the past, and how you are managing your money currently.

4. Consider the future – You can’t reach a goal if you don’t know where you are headed. Think about what your life will be like once your money is under control.

5. Make plans – Once you know what you want, start making a set plan to get there.

6. Commitment – A plan only works if you stick to it with some dedication.

7. Choices – Consider your plan every single day, and make money choices that reflect your plan. Remember the goals you are trying to reach.

8. Reward – Congratulate yourself each time you reach a milestone, or just make a sound financial decision.

9. Keep going – Once you reach those goals, start the pattern all over again with a new goal in mind. By keeping your financial management broken down in to reasonable steps, you will keep yourself from getting overwhelmed with it all. Each step is easy, so stick to one at a time. There is no rush, so you can focus on just one step each week if you want. Consider it a game, and concentrate on being the winner at the end. Design your financial plan to suit your lifestyle and your needs, not anyone else. Your plan needs to help you solve your problems and get you where you want to go. That’s all that matters.

How to Budget Effectively
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How to Budget Effectively

How to Budget Effectively

Okay, all this talk about a budget. You know what a budget is and why you should have one, but how to budget effectively?

In the beginning, a good idea is to keep track of everything you spend money on for 1 month. You can set it up in a notebook with three columns, one for the description of what you bought, the second for your income, and the third for what you spend.

On this form, you must record everything. Even if you just spend a dollar on a soda, record it because in the end, both sides need to balance out. This is a good habit to keep up all the time, but it isn’t necessary.

Next, you need to examine what you’ve bought. Sort through it and decide which expenses are fixed expenses, or expenses that are for the same amount every month. These types of expenses are most often bills like cell phone bill, insurance, etc.

How to budget effectively requires you to list all these expenses. Write down next to them the amount to be spent.

Then look at the things you spent money on that were changing, such as snacks, movie tickets, gas, and gifts. Gas should be made one section. Take how much you spend in one week and multiply it by 4, for one month. If you spend $20 a week, put aside $80 a month for gas.

I have a certain amount of money set aside each month for gifts, whether I have any gifts to buy that month or not. It’s a really good idea. All you have to do is calculate about how much you will spend in a year on gifts and divide it by 12. This will come in really handy at Christmas time. If you have to pay for your own clothes or personal hygiene products, it may be a good idea to do the same with these necessities.

Now, for the remaining categories, you need to use your own discretion. Use a Budget Calculator to Calculate how much you spent on everything else which should include food, the movies, mini golf, books, clothes, and just about anything you chose to spend for fun or your own amusement. Does it seem like an outrageous number?Did you spend $300 dollars in one month on this stuff? I can tell you, as a teenager that is outrageous.

Depending on how old you are, you should make this expense anywhere between $20 and $100.Although, I think $100 is even a little steep. Set this amount aside every month and stick to it. You may even find yourself saving some of it for more exciting months. If you put aside $50 a month and you only spend $35, by the end of the year you’ll have an extra $180 that you can spend on something big to treat yourself.

Knowing how to budget effectively will lead to improving your financial situation

Every month, you should spend your first paychecks on important bills. Set up a little file system and put aside each expense in a slot. Look at all your expenses as a bill including fun money and gifts. Let’s say you get paid weekly and your expenses add up to $200. If your paychecks are for $100, you can set aside all your expense money in the first two weeks and then the checks for the rest of the month can go right to savings.

After you pay for each expense for the month, cross them out so that you know that they have been paid. You don’t want to pay any bill more than once.

Now that you know how to budget your money, learn how to budget your time, and you’ll be on your way to feeling rich!

Why Should I Budget?

Why Should I Budget

So Why Should I Budget?  You know what a budget is and you still aren’t convinced that this inconvenience will be of any benefit for you. Why should you budget? Why is a budget important?

A budget is important for people of all ages, from teenagers to retirees. It’s critical to budget if you want to get the most out of your money.  This can lead to financial freedom!

When you start a budget, in the beginning, it might seem very constricting. You feel like you can’t just go out and buy something on a whim. That’s partly true. You can’t just go out and blow fifty bucks whenever you feel like it, but it isn’t that strict.  There are some great budget templates out there.

When allotting yourself a certain amount of fun money, you can spend that whenever you want. You just have to remember that once it’s gone, you’re done for the month. Of course, this doesn’t include emergencies such as car trouble.

It’s important to put this restriction on your finances so that you are able to save. Saving money is the easiest way for teens to make money. Like they say, a penny saved is a penny earned.

So then, why should I budget? You should budget not only to teach yourself self control and learn good habits when you are older, but so that you are able to save money.

Having money saved will keep you out of trouble in case of emergency and will allow you to have money for the big things such as a car, or vacation. But I believe the biggest benefit of a budget, especially today, is the fact that it will help keep you out of debt.

With a budget, you keep yourself in check and will always know what you can afford. Debt is a horrible thing to have because it can affect so many parts of your life, including relationships, and even just your own happiness and stress levels.

You must remember that a budget isn’t magic. Just because you plan out your expenses, it doesn’t mean you will have money to pay for everything of your dreams. Just because you stick something in your budget, it doesn’t mean you’re going to get it. Everything has to be balanced out between what you make and what you spend.

Budgeting is a great way to make money as long as you look at it the right way!

What is a Budget?

what is budgeting

What is a budget exactly? A budget is an estimate of expected income and expense for a give period of time in the future. But what is that really? This means that after you cash your check, you don’t blow half of it on the way home. Instead, you take all of what you make from any job you may have and you plan it all out. Every dime is accounted for.

Instead of just paying bills when they come in and buying whatever you want whenever you want you have to plan it out. Most people are probably used to this, but it could cause a lot of problems. You might forget which bills were paid off for which month. It’s important to be organized when it come to money.

You must have all your expenses planned out and set up for each month. This way you know exactly what you need to spend each month. When you have all your bills planned out, you don’t have to worry if you remembered to pay them all.

Even if you don’t get formal bills a budget will help you keep track of all your expenses. Maybe you just give your parents money to pay for your cell phone. In fact, this could be easier to mix up if you don’t keep track. You might end up paying twice for one month. I’m sure you don’t want to do that.

In your expenses, you must include everything you could possibly spend money on, including fixed expenses such as gas and insurance, but also variable expenses such as fun money, and money for gifts.If you have a set amount, you won’t go over. You must budget out every dollar you make.

By spending this way, you will always be spending nearly the same amount every month and may just have room to start saving. I’ve been budgeting since I was about 16 and although sometimes I go off of it, it has helped me organize a lot. Also, I’ve gotten my spending under control and I have been able to save for a lot of important things such as a car and college tuition.