Practical tips for Successful Money Management:
- Use a budget to list your income and expenses. Click here for a sample budget form.
- If you have difficulties establishing a workable budget, just keep a list of all expenditures for one month. This exercise will help you become aware of how you spend your money. Sometimes a simple awareness leads to a choice of better spending habits. Use your list of expenses for one month to construct a budget that is realistic and suits your needs.
- Save some money. Experts recommend saving 10% of your earnings. College students may not be able to save this amount but save something so that you can afford those books next semester or meet other goals. The most important thing to remember is to get in the habit of saving. After you finish college and get that first good job, aim for the 10% savings to accomplish your financial goals.
- Have a financial plan. Sit down and write out some financial goals such as paying for college, buying a car, renting or buying a home, savings, investments, travel or other goals.
- Start managing your money now. The
younger you start the better. Francis Leonard, in a book entitled "Time is
Money"' says that you can retire at age 68 with a million dollars by saving these
amounts at 10% interest at various ages: Age 22, save $87 a month
Age 26, save $130 a month
Age 30, save $194 a month
Age 35, save $324 a month - Learn about investments. Saving your money is not enough. You will need to know about various investment options to secure your financial future. You can learn through your own reading, taking a college course or speaking with an investment advisor. Most financial advisers recommend investing in the stock market for the long run.
- Don't take on too much debt. Using a credit card is very tempting but expensive in the long run. Use your credit card to establish credit. Pay it off each month to avoid costly interest.
- Plan to buy your own home eventually. Mortgage interest is tax deductible so you can keep more of your money and not have to deal with the next rent increase. As a college student you may not be able to buy a home now, but put this idea in your financial plan.
- If your old car runs, keep it. Each month that you drive your used car, you save money. College students are often tempted to buy a new car and wind up working so many hours to pay for the car that there is not enough time left for study.
