Have you ever been in a situation where it feels you never have enough money to spend? If you could get your hands on more, you could buy that thing you want for so long, or buy those shoes you “need.”
We all want more money, and we all need it. The problem comes when your expenses exceed incomes.
That is why it is essential to learn how to manage money while you are still at home, living with your parents before you go to college.
Here I will talk about some bad habits that can lead you to spend more than you need, how to get a glance in controlling your money, and what can you do to put finances under control.
Sometimes friends may invite you to go out, to some expensive place. And instead of saying: “Sorry, I can’t afford to go,” you decide to join them and end up spending more than you can afford.
That puts you in the position when you have to fear for every dime you have, often sacrificing things you truly need, just because you went out and had a bit of fun.
Mastering the skill of managing your funds can be tricky, and perhaps scary, but it is not impossible. Rather than fret about the money you don’t have, why not learn to manage the money that you have, one that passes through your hands?
You could wait until you leave home to learn how to manage money. And somewhere along the way, I am sure you would handle it and figure out priorities.
But, think about it through this example: would you jump out of an aircraft without first learning how to use a parachute?
Again, you might be able to figure out how it works while hurling down fast to the earth.
Wouldn’t it be better if you learned the basic principle of using the parachute before actually jumping out?
Likewise, the best time for you to learn to manage money is while you are at home, before harsh financial reality confronts you, and often punch you in the … face.
The money will benefit you only if you learn how to control your spending. Doing so will boost your confidence.
If you want to run, you first need to learn how to walk. Have you ever asked your parents to explain what is all involved in maintaining your household?
Do you know how much it costs to provide electricity, heat, and water each month? How much it costs to run a car, buy food, or pay the rent?
Remember, you help to generate those bills, and if you leave home, YOU will be the one who has to pay the bills. So by gathering relevant information, you will have a general idea of how big your bills are going to be.
Ask your parents if you can see some of the household bills, and listen to them, carefully, as they explain how they budget for them. This is like free advice from a financial advisor.
Truth be told, controlling your spending is easier in theory than in practice, especially if you live with parents and receiving an allowance or earn money from a job.
Your parents are most likely ones that are paying the bills, and as a result, a fair share of your money is available for you to spend as you wish. And spending money is fun.
The problem may occur if your friends pressure you into spending beyond reasonable limits. One form of entertainment among the younger generation is shopping. Cloths. With mark. Expensive.
It is almost an unwritten rule that you must spend money if you are going to have fun. And that can become costly.
Although it is natural that you want to fit in with your friends, but ask yourself: Am I spending money with friends because I can afford to or because I feel I have to?
Many people spend money in an attempt to boost their reputation among friends or associates. They try to impress others with what they have rather than who they are.
That trend can cause significant financial problems, especially if you have a credit card. How can you prevent reaching a limit on your credit card?
Instead of maxing out your credit card or spending whole paycheck in one night when going out, use your money rationally. Calculate a limit of your spending.
If your salary goes into a bank account, plan ahead and take out only the amount you need for a certain period of time. If not, put it at your bank account and keep it there. That way you will not be able to spend more than you have with you.
Keeping track of your purchases would be wise. Sometimes you may be charged for something you haven’t purchased. Pay your credit card bill on time. If possible, pay it in full.
Avoid using your credit card as a means of obtaining quick cash. Usually, those interest rates are way higher.
Maybe you think you already have your money and finance under control. And that is excellent if you. But ask yourself: How much money did I spend during the past month? What did I spend it on?
If you can’t answer those question with certainty, here is how you can take control of your spending before your spending takes control of you:
- Keep track. In a period of at least one month, decide that you will record each income and outcome. Meaning, write down date and amount of money which you receive and describe each time you buy and how much it costs. You can download this simple table sheet and print it, or download an excel version.
- Make a budget. Plan how much money you think to spend in the current month and add anything you can think of that is relevant to you. As the month progress, in the final column write the amount you actually spend on each planned expenses. Don’t forget to record all of the unplanned spendings as well.
- Adjust. If your spendings are inside your budget, that is great! If not, adjust your spending habits. Think if you can cut in some fields to save up for other things.
Money can be a useful servant if it is appropriately used and in the right way. If not, you can become its servant. And that is where most people fail. Don’t let this happen to you!
Control your finance, separate what you really need from your wishes. Learn to plan your budget and always stay in control.
Don’t be ashamed to ask help if you need it! Your parents can help you understand how to manage your spendings, and that will help you control your money flow. Being responsible with your money is the first step to control your life!
Learning how to manage money while you are still living with parents will teach you how to manage your money in college, once you move away from the safety of your home.
I hope you learned something new. If you find it useful, please share it with your friends. I would also like to know how you manage your money? Do you often spend on things you don’t really need?