Finances and Money Management
One of the most important things you will need to take care of in life is your money. Practical money skills are important in your day to day living, such as shopping, transportation and housing. But it's also important for 'big ticket' items such as a home or vehicle. Learn how to manage your money wisely and responsibly. When you do so, you have financial security and choices in your life.
You make decisions about money everyday. If you decide to spend all your money on fun activities, games and movies, then you may not have enough money to buy groceries, make your car payment or pay your rent. You must decide what is important and plan. A budget is a plan you make to decide how you will use your money, pay bills, plan for emergencies, and allocate money for activities and items you would like to buy.
Finances can be divided into two categories: Income and Expenses. Income is the money you have from a earning a paycheck, Social Security or a trust. Expenses are the items or services you buy such as food, rent, clothing or recreation.
Decide how you will manage your income and expenses. Income can be managed in several ways.
- Checking account - checks, debit card, overdraft
- Savings account - both short term and long term
- Investments - setting aside money to grow and earn more money
- Housing - room and board at home, rent an apartment or own a house
- Food - shopping or restaurant
- Clothing - for work, school or community activities
- Transportation - bus, taxi, vehicle and vehicle insurance
- Recreation - movies, travel, etc.
Learn about money and budgets
- Talk to your family about how they manage their money and about making a budget
- Talk to a banker about savings and checking accounts and how they work
- Talk to someone you trust who has a budget
- Take a finance or business class in school, or through your local school community education program
- Take a finance and budget class from your local Center for Independent Living
Credit and Loans
Some people choose to have credit cards or loans. This is when you buy something, but do not have the money. Banks, creditors, etc. lend you the money, but you must pay it back with interest. Using a credit card for emergencies may be one strategy in your budget. However, if you use the credit card, and exceed your income each month it will hurt your credit rating. A credit rating is very important when you want to buy a vehicle or home using credit. It can also be important in renting an apartment too.
There are many websites that have information about managing your money and financial planning. Some include worksheets that can be used to help you set up a budget, others inform you on how to set up savings and checking accounts, some include workbooks and others offer games to help you have fun as you learn. Check out the Finance and Budget Links to learn more.
Assets - Saving for homes, vehicles and education
When you think about the future, do you want to own your own home or condo? Buy a car or other vehicle? Want to start your own business? Go to college? If you said, 'yes' to any of those questions, you are just like many Americans. We dream! However, planning and budgeting is needed to achieve those purchases. There are several ways to save. Begin with putting money into a savings account. But then also investigate ways to save, or have assets, to make these purchases. Asset building is one strategy to planning and saving for what you need.