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Why Budget?

Reading, writing and math are the basics of any grade school program, too bad that list doesn't include personal finance. While you probably learned the basics of money and making change in grammar school, you may not learn how to manage money unless you choose finance as a career path. Given our current economic climate, it’s in everyone’s best interest to be prepared to face life's fiscal challenges.  While budgeting is hard for most adults, there are some quick and easy ways to think about the value of budgeting.

  • Don’t carrying a lot of cash. This guards against catastrophic loss and also teaches Good Consumer Tip #1: Resist buying on impulse.
  • Consider the life span of everything you purchase from materials necessary for school to an iPod tune. “Is this really worth the money?” “Will it last?” And when appropriate: “Is it durable?” “How much trouble will it be to take care of?” “Will it shrink?”
  • Comparison shopping almost always results in a better price and a better product.
  • Benefit from the experience of others by talking to people who own what you are shopping for: Do they like it? Did they have any problems?
  • Shop on sale. Wait until sale time before you consider paying full price for something.  You will be able to afford more because you are paying less!
  • Think about the costs of things, not in terms of dollars but in energy spent: Are new rollerblades worth 40 hours of babysitting, x number of hours at your part time job or six lawn jobs? Purchases might be placed in a new light when viewed in this way.
  • Any girl making a major purchase (electronics, computer accessories, stereo equipment, gaming devices) should know about Consumer Reports, also available at your local library and online.  It’s essential to do your homework before making major purchases.

5 Steps to Working with Budgets

Get the big picture before you get a surprise in the form of credit card bills, bounced checks, or automated teller machines that refuse to give out cash.

First-time budgets shouldn't be complicated. Simply follow these steps.

1. Work with an adult to itemize regular monthly expenses.

2. List total income, including money previously set aside, allowance or perhaps wages from a part-time job during school.

3. Subtract expenses from income to see if the budget is reasonable.

4. If the expenses outweigh the income, work with an adult to trim expenses until the numbers agree.

5. All budgets should include a savings strategy. Encourage girls to make regular deposits into a savings account for future expenditures (anything from school expenses to a special gaming device).

Budgets need regular care; it’s a good idea to periodically to review your budget. It’s important to not just create a budget but maintain it as well to avoid overspending and debt trouble. Even though budgets are not carved in stone, they can be flexible. If your  favorite band is coming to town and you want to splurge on a concert ticket, you’ll need cut back on other expenses for a while.

Check it out: for more info on how to budget visit: http://life.familyeducation.com/personal-finance/independence

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