by Brett Hofmeister

Created on: February 17, 2009

The tips I have are good ideas for anyone but young people should pay special attention and learn early.

Too many people get their paycheck and go blow it on partying or buying some new toy then have to struggle to pay their rent or other expenses. Planning a budget can help to remedy this behavior. Budget planning is probably the most important step to managing one's money. Planning a monthly budget helps to show how much income is expected, what expenses need to get paid, and how much money is left to play with. The hard part is sticking to the budget and not blowing money on wants when there are still things that are needed.

Weighing needs against wants is another useful skill when managing money and it goes hand in hand with making a budget. If you want to have a cell phone then you need to make the cell phone payment. It is hard to live in or eat a monstrous television but I have seen people choose to spend their money on such things instead of paying their rent or buying food. Then they need to use their credit card to pay the rent of buy groceries.

Debt is a trap. The "have it now and pay for it later" philosophy that has been so popular lately is scary to me. Credit card companies know how to keep you under their thumb. The minimum payment on most credit cards won't even cover the interest accrued. I know someone who paid only the minimum payment required for her credit card and ended up with a larger balance than she started with. Avoid debt whenever possible. Buying a car or home on credit is understandable but using the credit card for little things and wants is a bad idea. Instead of charging the credit card for wants, try saving the money and using cash. I have found that by saving the money first I have more time to shop around and find the best deals before I buy. Most of the time the price goes down or a better model is available by the time I have the cash to buy whatever it is I am looking into.

Smart shopping is a great way to help manage your money. Stretch your dollars as far as possible by looking for deals, waiting to buy things that aren't immediately necessary, and investing. I always compare prices on things I am buying. It takes a little time and some thinking but it is worth it to have the saved money. If something isn't necessary and seems too expensive, wait to buy it until it is absolutely necessary or the price goes down. If you have the money now and you see something you are going to use in the future go ahead and stock up on it. Buying in bulk saves money but it isn't worth it to buy a bunch of something and then throw it away because you didn't use it.

Smart money managing can lead to long term financial stability so start early with using your money wisely.

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