Remember when your only financial concern was making your allowance last? Well, those days certainly don’t last!
Knowing how to manage your money well is certainly not an easy task. As we become older and transition into our youth and adult years, we start to find ourselves swamped with constant financial responsibilities, which can feel extremely overwhelming and daunting. However, if we educated ourselves with ways to manage our money better, juggling several financial responsibilities may not be as intimidating as you think.
Money management is the process of knowing where your money is going and having a plan in place for where you want it to go in the future.
Here are some tips on money management for youth:
1. Saving Your Money
Saving money is extremely important. You should consider setting up a bank account that has both a “savings account” and a “chequing account” for your personal spending. If you find yourself having difficulty with saving money, consider having your bank automatically transferring a certain amount of funds from your spending account to your savings account weekly or monthly. Or, consider not having easy access to your savings account with your debit card. This ensures that you stay responsible with the money in your savings account!
2. Set Short-Term Goals and Long-Term Goals
Once you start to earn and save money, you should set realistic and easy-to-reach goals for your money. A short-term goal (3-6 months) example might be saving for a new cell phone. A medium-term goal (1-3 years) may be to save towards the down payment for your first car. A longer term goal (3+ years) may be to save towards your post-secondary education costs.
3. Have a Budget Plan
A budget plan allows you to see what comes in and what goes out of your bank account. Having a budget plan can restrict what goes out so you can get rid of wasteful spending, while still having the money to pay for expenses that are most important to you.
You can keep track of your spending the old fashion way – writing it down in a notebook! You can also use a computer spreadsheet, or if you are more tech savvy with smart phones, you can even download budget planners.
All of this may sound overwhelming, but good money management takes practice, discipline and commitment. You may not be able to stick to these strategies every single time, but educating yourself of different ways to manage money better can help you do the best you can with your hard earned money!