Money for Your Life: Invest in Your Financial Future
CHAPTER ONE MUCH ADO ABOUT SPENDING SAVING Psst want to know the number-one rule of managing money Don't spend more than you have Of course that's easier said than done What if you really need something but don't have the money needed to pay for it Then you have to make some decisions Is it really something you need or do you just want it How can you buy it if you don't have the cash 4 So many things to pay for but only so much money to pay them with How do you decide what is a need and what is a want Should you borrow to pay for something Learning how money works can help you budget what you have plan for the future and make wise choices
Being Smart With Money Making money decisions doesn't have to be difficult It's important to have a basic knowledge of math and a handle on how money is made before you can spend it wisely Saving wisely is also important You want to make the most of your money Luckily there are many ways to do so Money A challenging relationship Many people have an awkward relationship with money We live in a world where we are all consumers We all need basic items such as food shelter and clothing Most of us pay for these basic needs If we have enough money left over we might spend it on something we want Some people have more than enough money to pay for basic needs as well as satisfy all their wants Other people don't have enough money to meet basic needs SHOPPING WATER BILL ELECTRICITY BILL EDUCATION AUTO LOANS TRAVEL INTERNET PHONE BILL HEALTH MEDICINE TRANSPORTATION FUEL HOME LOANS CERA BILL COFFEE MONEY SAVING CREDIT CARD FOOD Shown here are some of the expenses that you may have to pay every month when you become an adult As you become more financially independent you will need to sit down and balance costs such as these It's all a part of becoming financially savvy CREDIT 5
Where Your Money Comes From Take a look in your purse wallet or back pocket Are you flush with cash Likely not unless you are fortunate enough to have wealthy parents or a generous grandparent Most people work hard to earn their money Knowing where your money comes from is one of the first steps to managing it An allowance a part-time job and gifts are all sources of money Most allowances are given by parents or caregivers They are set amounts that may be tied to some form of work such as chores Jobs are usually paid hourly so that you get a set amount per hour worked That money is ongoing for as long as the job lasts If you are lucky you may get gifts of money for your birthday or Christmas These gifts are great but they are temporary Once you have a handle on where your money comes from you can put a value on it It will help you make smart decisions about what to do with your money LOAN DOWNPAYMENT CREDIT CARD PURCHASE MONEY FINANCE TRUST INSURANCE PERCENT BANK Whether they are talking about buying a gift for a friend or getting a loan to buy a new car for most adults money is a part of the conversation of everyday life And learning the language of money is a big step on the path to financial literacy and success 6
Speaking of Money Teaching kids sound financial habits at an early age gives all kids the opportunity to be successful when they are an adult Warren Buffett influential business executive known for his financial skill and generous support of charitable causes Learn the Language of Money Financial literacy is about learning the language of money and becoming comfortable speaking that language It’s about understanding how to earn money keep track of it and save and spend it wisely Mostly financial literacy is about learning how money works and how it can work for you Many people consider money a taboo subject or something that is not acceptable to talk about in public Not talking about money though can lead to financial problems in life Living Close to The Edge More than half of all American adults live paycheck to paycheck That means they receive a paycheck at work spend their money on bills and necessities and have nothing left until the next payday They never get ahead They can never save for something special They never set aside a stash of cash for emergencies It’s a frustrating way to live There are many factors that contribute to living paycheck to paycheck Some have to do with declining wages and job opportunities and higher costs of food and housing Others involve inequality between wealthy members of society and the working poor who live in poverty even though they have jobs There are also historic and stubborn cycles of poverty that so many people cannot break free from no matter how hard they work Many of these factors lie beyond the control of average citizens For example money is often passed down within families meaning that the same people will stay wealthy These people often have the cash to start businesses and make a lot more money Sometimes job opportunities are only available to people who live in certain expensive cities Still there are ways that can help prevent people from living paycheck to paycheck One great way to fight falling into this cycle is to launch your financial literacy learning ASAP 7
