Learning to manage money is one subject that students may need the most in life, but unfortunately it gets the least amount of attention.
Money (or the lack of it) can become one of the biggest stresses in life if you’re not careful. Here are three things you have to do if you’re going to learn how to manage your money:
Create a game plan
In order to win with money, you have to know how much you have coming in and how much you have going out. You need to know where your money is going, so it doesn’t just walk out of your wallet—as it may be doing now. In order to do all of this and effectively manage your money, you need a game plan. This is more commonly known as the dreaded “B” word. Not that “B” word, you filthy animal! Get your head out of the gutter. I’m talking about making a budget (cue scary music, screams, lightning, thunder, etc.). A budget is essentially a road map for handling your money. If you were going on a road trip, you would take the time to map out on Google or MapQuest where you were going and how you needed to get there. A budget is the same thing for your money.
Avoid debt like the plague
I’m talking about all kinds of debt—credit card debt, school loans, car loans, any type of debt. Avoid it at all costs. If you can’t pay cash for it, wait and save up until you can. There’s no sense in going into debt for some electronic gadget, a new outfit or a trip to the movies. Pay cash or don’t get it. If you currently have debt, the only way you’re ever going to get out of debt is to stop borrowing money!
Think long term
Do you remember the story about the tortoise and the hare? More importantly, do you remember who came out on top? The way I remember it, the tortoise always wins the race. If you learn to make sacrifices today, it will always pay off in the long term. Personal finance is 80 percent behavior and 20 percent knowledge. I can give you the knowledge you need, but it really comes down to changing your behaviors and implementing the things you read in this article to life in the real world. I know, I know. You’re thinking all of these ideas look great on paper, but in real life, they are pretty difficult to carry out. You can do each and every one of these things listed.
Is it easy? Not necessarily. Is it worth it? Absolutely!
Grant Baldwin is a national speaker and author of Reality Check. Contact him through GrantBaldwin.com or email email@example.com.