Financial Literacy is something that has been crammed down my throat by my mother since I was a kid (and she still bugs me to this day lol). Being an entrepreneur its imperative that you create healthy spending habits and have top notch money management. Managing money truly is a skill and unfortunately its not one that many possess. Learning good spending habits early in life and sticking to them is the key to life long financial stability…and a fabulous credit score.
So grab a pen, paper, and check out these tips on how to budget your young moola baby!
Spending Habit #1: Details
Know where your money is going down to the cent by tracking every single penny that leaves the piggy bank. It may sound like a lot of work, but it will keep you from spending money that you really don’t need to spend. Are your spending too much money on food eating out everyday for lunch? Track how much you spend eating out for a week versus going grocery shopping and bringing your lunch every week. That right there alone will be a HUGE eye opener.
Spending Habit #2: Quality > Price
Being frugal with your funds does not mean that you are cheap. With that being said, for some things it makes sense to spend a little more coin for something that is of a better quality. I typical use this when shopping for furniture, clothes, technology, etc. I would much rather buy a piece of furniture that is of higher quality for lets say $500 then by a piece of furniture for $50 that probably won’t last very long and I’ll have to go out and end up buying that $500 piece of furniture anyway.
Spending Habit #3: Price > Stuntin’ & Keepin’ Up With The Joneses
It’s one thing to spend a little extra coin for something that is of a better quality, but just because you got a huge stimulus check and have the money to pay $2000 on a Coach purse doesn’t mean you ACTUALLY have to spend $2000 on that purse, especially when more than likely you can get that same purse for a lot cheaper. Don’t be the “poor person” making “rich person” decisions. Avoid extravagant and impulse spending. Strive to live within or below your mean’s and don’t let social media pressure you out of your financial security!
Spending Habit #4: Patience
Don’t fall into the traps that are set by credit lenders. Instead of taking the “Buy Now, Pay Later” option, just save your money and buy it when you have the money. A lot of times those interest rates and fees on those bad boys will have you paying a lot more for something than the original price. Which goes back Good Spending Habit #1
Spending Habit #5: Pay yourself first
My mother still tells me this almost every single day…pay your yourself before you pay anyone else. My suggestion would be to choose a set amount, whether its $10, $20, or $50, that you want to set aside biweekly (or monthly) and save, save, save!
Again, I am in no way a Financial professional and neither is my mama. These are things that I have found to help as well as those that I have came across after reading various other articles such this one. As always I you find these tips to be helpful!