Money Management and You

It's never too early to learn how to effectively manage your money. Though our country finds itself in the middle of the worst financial crisis since the Great Depression, there are ways you can help safeguard yourself from future money woes, whether you're in high school, college, or are about to enter the workforce.

Track Your Spending
For one month, keep track of every penny you spend. It helps to put each expense into categories, including rent, utilities, entertainment, gas, and groceries. You will soon get a sense of where you may be spending too much. For example, if you like to grab a cup of coffee at the local coffee shop on a daily basis, it can quickly add up. Seeing the way in which you spend your money laid out in front of you can help you cut down on frivolous spending.

Once you have an idea where your money is going, you can begin to lay out a budget. Allot for necessities first. Entertainment and frivolous expenses should be at the bottom of your list. You may need to pull money from this area to allow for savings.

The Importance of Savings
In this "got to have it now" society, it's easy to move away from saving money, but the importance of having money to fall back on in case of emergency cannot be stressed enough. Ideally, you want to have enough money put away so that you could live off it for three months should you lose your job or in case financial aid for college runs out. One cannot be expected to save everything all at once, but it's a good idea to put away at least 10% of your income for your "rainy day" fund.

Credit Cards
Beginning in college, credit card offers will start pouring in. It's tempting to snatch up any offer that comes your way, but be wary of high interest rates and annual fees. It's a good idea to discuss this with a parent or trusted adult before accepting any credit card offer.

Once you have a credit card, use it wisely. Many of us live beyond our means these days with the help of credit cards, but don't let yourself fall into this trap. Spend only what you'll be able to pay off next month, or risk charges from high interest rates. You also want to be aware of your FICO score. The higher your score, the better chance you have of qualifying for low interest loans that will help you to buy a car or a house down the road.

Be on the Lookout for Great Deals
Whether you're buying groceries or a new bathing suit for summer, make sure you check for the latest offers and coupons before paying full price. When grocery shopping, opt for store brand foods when possible. They taste very similar and can save you a lot of money in the long run. Check the newspaper for weekly specials, and always bring a list with you to the grocery store.

When shopping online, check out coupon sites like Coupon Cabin before making your purchase. There are often great deals out there the store wouldn't necessarily tell you about.

The bottom line is that it's best to save money wherever possible. Although it seems impossible in this slow economy, you can be savvy and make the right choices that will help you in the long run.

Resources
About.com's Budget Worksheet
Fico Score Estimator