By Devin Epps
Welcome back guys to the second publishing of the Top 6 Money Management Tips for Young Men. Before I get back to talking money management.
Going back to the first publication, we talked about saving, paying on time, and working for the money you have; all very important financial habits. Hopefully you have already planned on ways to implement these tips into your daily life. If you haven’t, no worries, here are 3 more great money habits to develop at a young age.
1. Make a Budget
The act of Budgeting is “to allocate funds to,” or “to plan or provide for the use of.” Assigning a certain amount of money to a certain use and sticking to it requires a huge amount of discipline, which is why budgeting is so valuable these day.
The ability to purchase anything at anytime is more abundant than ever. You need to know how much of your money is going to a certain expense. Personally, no I don’t track my expenses down to the last cent, but a budget needs to be well kept enough to where you know when to pull back on the spending in a certain area, or if you have more money to enjoy somewhere else.
Let’s face it budgeting can be… Boring, BUT since it might be your first time making a written budget, let’s make this as simple as possible:
First, you want to start with your income. You can’t have a budget without money, so figure out how much you make on average per month. (I like to do my budgets monthly, but feel free to do it differently)
Next, you want to figure out your fixed expenses. What are you spending your money on regularly?? Whether its bills or rent, write those costs down next. If you don’t yet have the responsibility of such payments, writing down the money you save each pay period will be fine.
Finally, you want to set your spending goals for each category with the leftover money. One of my good friends Warren Buffet said, “Spend what is left after saving.” So that’s exactly what we’re going to do.
Come up with a few categories you tend to spend your money on the most, and set a dollar amount per month for each category. Areas like entertainment, clothes, and food are the most common; any other unusual expenses can be put in an “other” category.
As with many things, there are a lot of different ways to do a budget. I just find this way the most simple and effective for someone starting out.
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