Sherri Mabry Gordon - Be Smart about Money: Money Management and Budgeting

Manage Your Benjamins With Care!

When you get your first paycheck, the impulse is to spend it right away. After all, there's the new smart phone and video game system you want. But if you choose to spend quickly, you'll find your money disappearsfast! How do you avoid this common mistake? Smart money management and budgeting! Be prepared for your first paycheck. Plan a budget. Save. Be Smart About Money will show you the basics to managing your money, provide smart ways to save and spend, and how to create your personal budget.

About The Author

Sherri Mabry Gordon is a former magazine editor and reporter who is currently a freelance author and educational writer. Among her previous books for Enslow Publishers, Inc., is Using Technology: A How-to Guide.

Your first experience with managing money probably involved a piggy bank. Did you ever wonder why banks are shaped like pigs? After all, pigs arent animals known to save like squirrels save nuts or dogs bury bones.

Well, according to history buffs, in the 1600s, it was common to store money in orange clay pots called pyggs. As time passed, potters eventually started shaping these pots into pig shapes because the pygg name made people think of the farm animal. Thus, the first piggy banks were born in the 1700s.

Today, people still use piggy banks to store spare change. You might have one of your own. But now youre looking for more sophisticated ways to save and manage money. You may even have a bank account already. But a bank account is of little benefit if you dont know how to properly manage the money thats in it.

Money management is a way to map out how you will use your money. When you manage your money, you are determining not only how you will spend your money, but also how you will save and invest it. When learning about money management, its a good idea to start early so that you dont spend beyond your means and end up in debt. If you make smart decisions about your money, you will have money available when you need it.

Unfortunately, though, not everyone knows how to manage money. For instance, in 2012, high school students who took a government-sponsored test on money issues, known as the National Financial Capability Challenge, only got 69 percent of the answers correct. For this reason, parents and educators want to help kids like you manage money effectively.

There are a number of benefits to learning how to manage your money now rather than later. For instance, if you learn how to manage your money effectively, you will:

• Develop good spending and saving habits.
• Learn how to set financial goals and reach them.
• Learn how to make wise purchasing decisions and make your money go further.
• Develop self-control when it comes to making purchases.
• Avoid spending beyond your means and getting into debt.
• Have the ability to give to others in need.

Today, money management is extremely important for teens like you. You have access to more money than ever before. You may earn money from allowances, monetary gifts, chores, and part-time jobs. But money management doesnt just involve the money coming in. It also involves the money going out.

Sometimes you probably would like to have more money on hand. Thats where money management can be helpful. With solid money management skills, you will have more money than ever before.

Time Is Money

One important concept in money management is the idea that time is money. What this means is that managing your time along with managing your money is important.

For example, lets assume you make $10 an hour watching your neighbors kids. If you buy a $30 video game, then you had to work three hours to pay for that game. When you go to purchase the game, your local game store was out of it. But they are expecting more in two days. However, a store an hour away has it in stock. You want it now.

When deciding whether or not to drive the hour there and the hour back to buy the game, you have to consider that time is money. If you drive the hour there and the hour back, you have now paid $50 for the game because of the two hours you spent getting it instead of waiting the two days. Plus, you have to factor in the cost of gasoline.

Dollars and Sense

When it comes to money, you have to realize that other people want it. Some will do almost anything to get it. So do your research before entering contests and buying things, especially online. In fact, online scams are some of the biggest challenges to effective money management. Dont assume that these offers are legitimate. The best practice is to investigate everything first before agreeing to purchase or enter.