Managing Your Money:
Why it is Important to Start Young
Tracking Your
Spending Habits
Make a list of all the
money you spend in a month. Examine your list, and then answer the
questions below:
- What patterns do you observe in your spending habits? Do you
buy a soda every day? Do you get food for the vending machine
on a daily basis?
- How do you decide what to purchase? Do you buy on impluse or
do you plan out what you buy?
- What factors influence your purchasing decisions? Availbility?
Price?
The
Budgeting Process
- Assess your personal and financial situation,
including your needs, values, and stage of life.
- Set personal and financial goals.
- Create a budget for mandatory, flexible, and
optional expenses based on your projected income.
Mandtory expenses
are the same each month, such as rent, loan payments, insurance
premiums, car payments, etc.
Flexible expenses
differ each month, based on how you choose to spend your money.
Examples are grocery bills, restaurant expenses, entertainment,
clothing purchases, etc.
Optional expenses are
items that are not necessary for survival. If you are spending
more money than you earn, you need to eliminate items from this
category to cut back on expenses
- Monitor your current spending patterns.
- Compare your budget of how you wanted to spend your money
to what you have actually spent.
- Review your financial progress and revise your budgeted
amounts.
Setting Up
Your Budget
Use the forms on the
following two pages to create your personal budget.
After you've completed
these forms, try to stick to your budget for one month. At the end
of the month, write down your actual income and your actual
expenses.
Calculate the difference
between what you thought you would earn and what you actually earned,
and what you thought you would spend and what you actually spent.
