Budgets and Saving Money
On the basis of the personal record account you have made, you can decide upon a possible plan for future use of your money. Such a plan is called a "budget," a "spending plan," or a "financial plan." Your plan may or may not be good, but you cannot tell until you give it an honest trial. No budget is any good unless it is carried out. Compare your actual spending with your plan frequently. The first plan you make may not really fit your needs, and you may have to revise it until it is right for you and helps you to meet your goals.
-It saves you time and bother every time you want to spend money and can't decide whether or not you should.
-It helps you to get the things you want as well as the things you need, and may even allow for a bit of foolish spending.
-It will give you experience in learning to plan your spending and saving that will be of value to you all your life
-It allows you to save for things you could not afford otherwise.
Every good budget should provide for setting aside an amount of money - no matter how small - for saving. By saving is meant putting aside a definite amount regularly. This amount should be included in the budget and taken out first. Unless you do this, you will probably not be able to save.
It is easier to save when you are putting money aside for some definite purpose, not just for the sake of saving. The person who has saved money is also better prepared for an emergency.
It will help you to keep from dipping into your savings unnecessarily if you put the money away where you cannot readily get it.
Reasons for Saving Money
-To be prepared for an emergency or have money on hand for future use.
-To have money on hand for the purchase of an article too expensive to buy otherwise.
-To develop habits of thrift and living within an income
Ways To Keep Savings
-Give it to your parents to lay away for you, and do not ask for it back.
-Have a bank in your room that cannot be opened easily
-Put it in a commercial bank
-Buy Savings Bonds
What You Gain by Careful Management of Your Money
-You can have more things for the same amount of money
-You will have less trouble with your parents
-You can have more of the things you want
-You can save for your goals or for large articles
-You will not be worried or frustrated about money problems
-You will gain a skill that will help you as a homemaker
The first step in managing your money more wisely is to keep a record of the way you are spending your money now. Make a complete, accurate record over a period of at least a week. A month's record is better. At the end of the time, look at your account to see where your money has gone. Have you spent it wisely, or have you wasted some of it? Only you can decide, and you will have to be very honest with yourself in making the decision.
An expense record like below will help you to keep an accurate account of just what you are doing with your money.
Record of Expense ..... Mon.... Tues....
Gifts, loans, etc.
Keep a written account of your personal expenditures for two or three weeks. At the end of that time combine the expenditures into such groups as lunches, bus fares, clothes, amusements. On the basis of your results, decide whether or not you need to improve in your spending practices.
Keeping a record of what you spend gives you an opportunity to see where you might be spending too much and why you may not have money for some of the things you would like to do or have.
No matter how much or how little money you have, it is still important to plan carefully the way in which you use it. Some people, through good planning, get much more for their money than do others.
What Determines How Your Money is Spent?
Have you ever thought about money, what it is really for? Actually, it is only a means by which we exchange our work or the work of others for the clothes, food, books, amusements, or other things we may need or want.
There is a difference between our needs and our wants. By wise planning of the spending of your allowance for the things you really need, you may have enough left for the things you want. One of the pleasures that comes from managing your money well is being able to spend a little money foolishly if you want, because you know you've done well with your other money.
Your Personal Aims or Goals
If you want something very much, you will be willing to save for it. Thus your personal desires, or your aims and goals, influence your spending. You may even get your parents to match dollar for dollar, each dollar you save, until you reach your goal of maybe saying, buying a bicycle.
Your parents may have a lot to do with the way your money is spent. If you have a definite allowance, you probably have an understanding with your parents as to what expenses your allowance must cover. School lunches, bus fare, Sunday school and church offerings, paper and pencils, club dues, as well as the occasional ice cream, soda, or movie may be included. You may be given some chance to select and buy part of your clothing or the accessories for your room. After you have reached an understanding with your parents as to what is to be included in your spending, the actual management is your responsibility.
The way your friends spend their money usually affects your spending. You can think of many examples of ways in which your friends' purchases of cosmetics or clothing accessories have influenced you to spend your money for similar things. As a result, you may buy something which your own better judgement tells you is a foolish purchase. On the other hand, in some cases your friends' spending practices could be a good influence.
Ways That Young People Waste Money
1. Going on a spending spree the minute any money is received.
2. Spending money on snacks and trinkets that give only temporary satisfation
3. Being influenced to spend money for things not really wanted.