What Does Your Money Say About You?
Finances have very little to do with actual money. The way you approach managing and spending your money reveals what you value, how you view your own self-worth and your relationship with God. So, if you want to find out what you really value, just look where you spend your money.
It’s Not Your Money
The first step to establishing a healthy approach to spending is to recognize that your money is not your own. Everything you have and everything you earn is a gift from God. He is the owner of all your possessions. Ownership can be a source of anxiety. An “owner” of a company worries about whether there will be enough money to pay the bills, but a “manager’s” responsibility is to be faithful to the owner. The Bible teaches that God is the owner of all things and that He’s in charge. We’re only managers and stewards. One day, God will ask us to explain what we did with our money, talents and time. So, every spending decision is a spiritual decision that demonstrates how much we trust God with our lives.
Share the Wealth
Giving away the first portion of your money, whether that is 5%, 10% or more, is a key to managing your money well. Be generous by helping the needy, give an offering to your church or support a cause that affects your family or a close friend. When you give away part of what you’ve earned, your focus will shift by being a reminded of the gifts that God has provided you. By giving away what the world deems valuable, you’re demonstrating that your true value lies in something greater than yourself. It lies in a God who can do amazing and miraculous things with you because you are a great value to Him. If you’ve never tried giving some of your money away, a goal of 10% may seem daunting. Start small by giving 1% of your earnings and keep building. With practice, you will discover that there is greater joy in giving then the joy you receive from what you buy.
Save Before Spending
Establish your spending habits in a responsible manner by saving the second 10% of your earnings. There is no exact number for the amount of money the average teenager should have in savings. This number varies according to your personal circumstances. A general rule is to have one month worth of expenses put into savings. It’s really not too much when you consider that the majority of your money is spent over the weekend hanging out with friends at the movie or the mall. This savings should be used during an unforeseen event, when something bad happens and you need to rely on money you’ve set aside. Recognize that when you move out of your parent’s house, a better goal is to maintain a savings of six months of expenses. So, it doesn’t hurt to start gaining perspective on the amount that you indirectly spend through what you cost your parents. Knowing how much your cell phone bill and car insurance cost may help strengthen your responsibility and appreciation toward those items.
Learn to Budget
Create a budget for the remaining 80% of your income. Whether you earn your money from a job or an allowance, you must categorize where you want your money to be spent. Think of it as a closet: if you have a cubby for all your shoes, use hangers for your dresses and drawers for your socks, underwear and tanks you know exactly where everything is. Money should be the same; you should know what you are spending your money on and how much goes where. Make a choice on what you want, not what others think you should have. If you like to buy more clothes than spending time at the movies, allow yourself more fashion spending money. 80% of your monthly budget means budgeting for 100% of the month, not just payday, so know if you’re close to spending your max for each category and mind your budget. Your budget can change from time to time, it’s not permanent, but if you find you need to spend more money, you’ll need to make more money.
Make a choice on what you want, not what others think you should have.
Debt is a heavy word, so having awareness now will establish and implement healthy financial habits that will help significantly down the road. Consider your homework assignments: if you turn in an assignment late, you’re docked points, even if you did a perfect job on the assignment. As with debt, when you purchase a $100 dress this month with your credit card but don’t have the $100 in cash to spend, you’ll end up paying $115 for the dress next month because of interest. So even though the purchase is only worth $100, you are docked $15 extra because you didn’t take care of the purchase up front. If you don’t have $100 this month, why would you have $115 next month? As dramatic as this may sound, in essence debt is selling a piece of your future for a piece of now. There are times when you will incur debt such as paying for your college tuition or purchasing a car, but use credit cautiously. Only use credit for items that you can pay off immediately, or investments in your future, never for something you want, but don’t have the money to buy right now. And don’t fool yourself, just because its on sale doesn’t mean you’re saving money. When you can’t pay for something, don’t buy it, even if it is on sale.
Just like finding your first job without having previous experience, you’ll need a good credit report established before you actually need credit. So, how do you manage a credit card without getting in too deep? For starters, just put gas on your credit card. Once you’ve proven that you can handle a credit card, buy groceries, dinners out with friends, coffee study dates or ice-cream outings with your credit card. Pay the bill right away and always keep your budget in mind! Try getting into the routine of paying off your credit card every week or two, but set a payment schedule that works for you (as long as you aren’t racking up interest charges). Don’t put anything on your credit card unless you have that amount in your checkbook so you can pay it off when your bill comes. Your parents may be able to help if you spend a little too much for your budget to handle, but try not to make a habit of leaning on their financial stability. They want to see you become responsible for your own spending and lifestyle, so give them that opportunity.
The Teen Girl’s Gotta-Have-It-Guide to Money by: Jessica Blatt, with Variny Paladino
Jessica Blatt advises the women of tomorrow on how to handle their money now. The newest addition to the Teen Girl’s Gotta-Have-It series empowers girls by showing them why money matters. From making money, to saving money, to investing money, to spending money, this book is packed with advice and innovative ideas for helping girls manage their money wisely, starting right this minute. Real-life examples and upbeat text show girls that smart money habits aren’t just about scrimping and saving—they’re about creating freedom, choice and independence. Quizzes, entertaining illustrations and interactive elements (including a personalized real-life money plan) make learning about money fun and non-intimidating. Developed in consultation with finance expert and savings educator Variny Paladino, this book has advice worth a million bucks.