Handling Your Money
Here you will learn what to do with your money once you earn it. Handling your money responsibly is one of the most important skills in life to have. If you don't have this skill then you can get into serious financial problems and be in debt. It's best to always stay out of this situation and prevent it.
Never feel the need to spend money. It's okay to just save your money to grow it or save for something you REALLY want. For example, instead of buying the latest iPhone, you could save your money for the future or you could invest it to earn even more money. However, if it's something that you would really enjoy then maybe it would be a good investment for your entertainment. Also remember: price is what you pay and value is what you get. This means that when you buy something what is its value that you get in return?
Try to always allocate money in case of emergencies. You don't want to spend all of your money and then have no money when it's time to pay bills, debt, etc. You always want to have money as a "cushion" so you don't get into any financial trouble. It's better to go to zero rather than to go in debt. Again, you DON'T have to spend your money just because you can afford something. Think about how this money could grow or go towards something better.
Strategies. One strategy you can use reduce the amount of money spent on items for entertainment is reduced is to record all the items you buy. You can record all these items in a notebook or simply on your phone. Later on you can look back at the items you bought and ask yourself Was this worth the money? Did it bring me happiness? This way you have a basic idea of what makes you happy and you won't have to buy things that don't bring happiness.
You can use the notebook strategy to prevent spending money erratically.
Another strategy you can also use to keep track of your earnings and to save money is to keep a log. In the first column you should put your starting balance, or how much money you had before you make the record. In the second column, you should put how much money you are earning or depositing. If you are spending money then just put 0 in the column. In the third column you should write how much money you are spending or withdrawing. If you are recording earned money then just put 0. In the fourth column you should put the reason for this log. It's always good to remember why this happened so you know what your spending your money on or how you're earning your money. In the fifth column record the date of when you made this record. Finally, in the last column put your final balance (which is calculated by adding your starting balance and adding the money you earned or subtracting the amount you spent). If you log your activity with money then it could keep it more organized and you will know how you are handling your money.
Log how much you earn and spend so you can prepare better for the future and how to handle your money.
Log the money that you spend or earn so you can prepare for the future.
By using these strategies you can keep track of how you use or earn money. This will greatly help you for your future financials. If you can get into the habit of recording your money, then you will become more organized and responsible.
One thing I strongly advise you NOT to do is to ask advice from friends, and maybe even family about how to spend your money. Although they know you best, they probably won't care very much on how you spend your money and will give you bad advice. Getting help is usually the best option, but in this case it's best to think for yourself and evaluate your own situation.
This is probably common sense but keep your money safe. At school it's probably best not to let people know that you have money in your backpack, even if it has 10 compartments. You don't want kids trying to steal your money because you can lose not only your money but important school work or private information. At home put your money in a safe place that a isn't obvious but is accessible. After all, it's no use in hiding money from thieves if you can't reach it yourself.
Once money is earned. A lot of people like to spend money that they earn immediately. This will be very bad for your future if you always spend your earned money right away. Always keep in mind that there's no rush to spend the money you earn. If you spend your money immediately then you may buy something that will be used once or you will just enjoy for a few seconds. Just think about how you can make the most with the money you earn and make last. For instance, you can use the money to create a business to earn even more money or you can save it for when you will need it most.
Moreover, a lot of teens that are broke feel the need to spend their money once they get it. Well, it's never too late to start saving for your future, so if you're broke, try to get out of that situation and have some money in your pocket. You can start a bank account so you have a place to store your money. Also, it might lower your temptation to spend your money.
It's much better to use your money to start a business and potentially earn even more money, rather than putting your money in a bank account and letting it sit there. Although you aren't wasting your money, your also not doing anything with it either. It's best to maximize your money and start a business.