Money is the very thing that so many careers, businesses, and legacies have been built on. Financial literacy is extremely important, but many people do not have a good concept of it. A good view on finance could sound like, “I am going to put X amount of my paycheck away for X amount of time, so that later in the future I can buy my own car.” A bad view on finance sounds like, “I should empty my bank account right now for something I will later regret purchasing.” Having a budget is a great method to help eliminate unnecessary spending and change someone’s views on handling money.
The first step to get on the path of budgeting is to set some short term and long term goals for yourself. As an example, one short term goal could be saving money to buy a really nice pair of shoes, while one long term goal could be saving money for college fees/tuition. Setting a goal is a wonderful source of motivation. What is the point of saving all of your money if you don’t have a reason? Determining your income (allowance, job, or gift money) is instrumental when dividing it between saving, spending, and other expenses you may have. According to an informal survey conducted in a few classes at Riverside Secondary, many students spend their money on gas, phone bills, clothing, or going out to eat. Keep in mind, it is expected that you must never spend more than you make.
Having knowledge of your income is a good skill to have when tracking your purchases. Most banks allow you to see your purchases through creating an online account, though writing it down works too. This step is optional, but tracking your purchases for one month or two allows you to see where your money is going and how much you’re spending. Keeping track of receipts are a must, even though it may seem chaotic at first.
One of the most annoying tasks to deal with when making a budget is eliminating unnecessary spending. What is unnecessary spending, one might ask? Look at coffee consumption as an example. Person A goes to Starbucks twice a week and buys a $5 drink. That $10 may seem small, but if you multiply it by the 52 weeks in a year, Person A is contributing $520 to Starbucks annually. Instead of going to Starbucks twice per week, Person A could go once and wind up saving $260 over the course of a year.
If sticking to a budget doesn’t work out for the first little while, don’t get discouraged. Try out other methods if needed, and find what works for you. By following these steps, you will be well on your way to a financially- relaxed future.
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