Managing Your Money:

Why it is Important to Start Young

An Example Of How To Rework Your Budget

Let's say Joe works part-time at a grocery store while he attends high school. Joe ends up taking about $600 home each month from his paycheck.

Joe's mandatory expenses each month are $175 car payment and $98 for car insurance. His flexible expenses are $50 for college savings, $30 for his cell phone, $100 for food, $40 for gas and oil. Joe's optional expenses are $40 for clothes, $20 for the movies, $30 on recreation. In a typical month, Joe is left with $17 after expenses.

Adjusting Joe's Budget

Let's say this month Joe picks up $45 in overtime (additional income) and his expenses change. His car insurance goes up to $118. Joe spent only $90 on food, but paid $25 at the movies and for pizza with his friends. He spent $30 for a birthday present for his mom (an unbudgeted expense).

How did Joe do this month? His extra income allowed him to spend more money, but he still didn't spend more than he earned. Good going, Joe!

Why Credit Card Companies Want Teens

You've probably received lots of mail from credit card companies. More and more teenagers are being offered credit these days-despite the fact that most full-time students don't have regular income.

Teens and young adults are also solicited by credit card issuers because:

• College students spend a lot of money on things like tuition, books, late night pizzas, and t-shirts. Often, these expenses are charged to credit cards.
• College students generally have high future earning potential, as well as high spending potential.
• Several studies have found most people hold onto their first credit cards for up to 15 years.
• Aggressive marketing techniques have paid off for the credit card companies. An estimated 80% of today's college students have credit cards