Starting Off Right with Budgeting Tips

In our consumer-driven society, young people are pressured into spending their hard-earned money, but most are not encouraged to save money. Credit card companies routinely bombard them with new ways to finance a made-for-television lifestyle. You can prepare your children for a better future by helping them develop good financial habits at home. Start with discussions about budgeting and how to stick to a budget plan. As your children mature, you can include more advanced financial topics, such as making large purchases, borrowing, saving and investing. Here are a few tips to guide your discussions: 

Before purchasing a big-ticket item, sleep on it

Buying a big-ticket item such as a car, furniture or computer is a big deal for a first purchase. Help first-time buyers think about how much the item really costs if it isn’t being paid for in cash. Explain how interest charges work and that perhaps a long-term budget plan can make the item more affordable. 

Managing the costs of education

Student loan debt has risen beyond $1 trillion in the United States. Creating a plan to defer the costs is not only smart, but necessary. Some students choose to work while they study. Others may choose a state school over a private school to bring the costs within the range of affordability. 

Creating a realistic budget

Everyone should make a budget. Young adults can start by creating a weekly budget, then move to a monthly budget. Encourage them to make a list of all their expenses and anticipate how much they need to save for an upcoming bill or purchase, such as tuition or books. 

Stay away from credit card overload

Building and maintaining good credit is a necessity. Unfortunately, over using and relying on credit cards is an easy way to fall into the debt trap. The key to success is to avoid the attitude “I can make that payment”, which keeps snowballing larger and larger until in is unmanageable. Explain to young adults that they should only borrow what they can pay back in full the next month. 

Teaching young adults early on to live within their means can provide them with a more secure future. Take time to talk to your young adults about money issues. A Pennsylvania bankruptcy attorney is available to help if you or some you love has accumulated an overwhelming amount of debt.

By Harold Shepley | Published November 26, 2013 | Posted in Financial Literacy | Tagged budgeting tips, Pennsylvania debt relief attorneys | Leave a comment