Money Management Skills

Learning how to manage your money wisely provides you with valuable skills that can be beneficial in many parts of your life. Being in college allows most students to be in control of their finances. It also presents moments where students can be tempted to overspend and possibly get into debt. The sooner you start practicing good money management, the better your financial outcomes will be in the future. So let's get started.

1. Look at your current finances. Do you know where have you been spending your money? Grab a few months of your previous financial statements and see where your money is going. Are you spending more money than you are gaining? Are you growing your credit card debt to try to cover your spending?
2. Set a goal. Having a goal gives you something specific to work towards. Do you want to get out of debt? Pay off credit cards or loans? Maybe you want to save for something special like college tuition, a car or a retirement fund? Once you decide on a goal, estimate how much money you will need to accomplish this.
3. Make a budget. At this point, you know how much money you have coming in and how much money you are spending. So let's plug these numbers in a budget calculator or worksheet. 
   1. Budget Calculators and Worksheets - CFNC offers a free budget calculator for your convenience. You can also find free budget worksheet templates online. They can be as simple or as complex as you need. If you do download a template, make sure you have software compatible with that template on your device. Google Sheets and Open Office are a few free resources that may work for you.
   2. Enter your incoming finances first. Grab your pay stubs, bank statements, and any other statements that list the income you are making. List these out separately on your worksheet in the Income section.
   3. Enter your expenses. Get your bills and bank statements so that you can list your spending one by one in your Expenses section. Make sure you include loan payments, grocery bills, transportation fees, utilities, and any discretionary spending. Discretionary expenses are the costs of items or services that are not necessary. These are 'wants' not 'needs' purchases. 
   4. Check your totals. Is your income total more than your expenses total? Are your expenses more than your income? Being able to visually see where your money is going is very helpful in knowing where you can make adjustments.
   5. Make the necessary changes to meet your goal. Consider areas where you can cut back on your expenses. Are there opportunities where you could increase your income? How much do you think you can realistically save each month to meet your goal? Even small changes now will add up over time. 
4. Use your budget. Planning a budget is the easy part. Now you have to try to stick with it. Discretionary spending tends to be where most people blow their budget, so be sure to stay aware of this expense section. Below are some tips that can help you try to stay within the budget guidelines that you set for yourself.
   1. Make a shopping list. Having a list of items you need helps to decrease the likelihood of impulse purchases. There's a reason there are small items at the cash registers of most businesses. Those items tend to be less expensive and more prone to a customer impulse buying one or more of them. "Well it's not that much, and it would be nice to have. I'll just get one." These types of purchases will add up quickly. Stay strong, stick to the list.  
   2. Look for lower prices. Doing a little research can save you big bucks. Shop around to see if you can find a lower price. There are free online apps that will compare prices for you. Don't stop there. Look around for lower rates on things like your credit card
   3. Seasonal sales. Did you know that most retail stores have sales at the same time each year? Black Friday is probably the most popular day for sales as it's the day after Thanksgiving. Did you know that you can get good deals on TVs around the Super Bowl? Gym memberships and movie tickets tend to be cheaper in June. Waiting until the item you want is on sale is a great way to save money. 
   4. Coupons. Online and print coupons are also a great option. Check the websites of your favorite retailers to see if they are offering a coupon that could benefit you. Most retailers will send coupons directly to you when you sign up for their alerts via text or email.
   5. Can I do this cheaper? Start thinking about what you could do that might be cheaper than things you pay others to do now, like eating out, working out, going to the movies and etc. Cooking more meals at home, following a free online workout, and streaming movies would all be cheaper options.   
5. Update your budget often. Update your budget on a regular basis - daily or weekly is recommended. This will help you track your spending during the month so you can see when and where you might be getting off track. If you have a windfall, like a raise at work or a rebate on something you purchased, add that too.
6. Consider investing. Once you have your budget running smoothly, it may be time to consider how to make your surplus money work for you. As your income grows you will have the opportunity to put some of your unused funds in a financial account that will allow it to increase and help you reach your goals. However, it's strongly encouraged that you do your research before you start investing. Learn about the different types of investment accounts like savings accounts, stocks, mutual funds, 401K and etc. Discover which financial institutions are dependable and have a proven track record of success. Everyone's investment strategy is different, so be sure to personalize yours to best meet your needs.

Incorporating good money management skills now will benefit you far into your future.