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It's Your Money -- How Do You Manage It?



An eLibrary article for Middle School students

Got cash? Wish you had some? Think about how you get spending money and how you spend it.

Got cash? Wish you had more? Think about how you get money and how you spend it.

Perhaps you consider yourself a good money manager already and save most of the money you get. If so, you’re on the right track.

Maybe you have friends who spend their entire allowance at the mall on things they didn’t plan to buy. Later, when something comes along they really want or need, they try getting an advance on the next allowance. If this sounds more like you, learning a few money management basics will help you take charge of your spending habits.

Cash-In

Perhaps you get an allowance for doing chores around the house; or you baby-sit for friends and relatives and take care of your neighbor’s plants or pets. In summer, you may do lawn work for neighbors or shovel sidewalks in winter to earn some extra cash. You might also get money on special occasions like your birthday or holiday. The money you receive from work, gifts or allowances are examples of your income.

Cash-Out

Stopping for pizza after a movie; renting a video game; getting a soda from a vending machine; putting money into a savings account or making a donation to charity – are examples of expenditures.

Tracking Your Spending

How satisfied are you with the spending choices you make? Perhaps you’d like to save for college, a game system or a new bike, but don’t know where to start. You can learn how to manage money by starting with a spending plan. A key to budgeting is to understand the difference between needs and wants.

Needs are things required to live, like shelter, food, transportation, and clothing.

Wants are things that would be nice to have, but are not necessary to survive. Going to the movies, eating out, buying name-brand clothing, video games or your own cell phone are nice to have, but aren’t required for day-to-day living.

Weekly Tracker

Completing a spending tracker for a week will document your income and expenditures and may uncover some surprises. If you find at the end of the week you don’t have any money left to save, or worse yet, you find you have more expenses than income, a spending plan will help bring your spending under your control.

Using the simple plan you see below, list all the sources of income under the first column. In the second column, list the dollar amount earned. Under Expenditures, list your purchases. In the next column, include the amount spent.

Below is a typical budget from a 7th grader we’ll call Shawn:

Shawn's Budget:
Income (list source)
$ Amount
Expenditures (list expenses)
Amount Spent
Baby sitting$20Pizza with friends$12.00
Allowance$20Movie 10.00
Music downloads 10.00
Extra money from Mom$1.50Soda & candy 5.00
3 bottled waters from vending machine 4.50
Total $41.50 Total $41.50

Oops…Shawn had to ask his mom for extra money! With a completed tracker, Shawn can plainly see there is nothing left for savings or charity and went over the original $40 for the week.

Re-Thinking Wants and Needs

Prioritizing is putting wants and needs in order of importance. Shawn can re-order the budget by deciding which expenses are more important than others.

When prioritizing, pay yourself first. That doesn’t mean keeping all your income to spend as you want. Instead, decide on a certain percentage you will always put into savings before spending anything. Saving 25 percent of your weekly income may be a good place to start, so if you have $40, you’ll first save $10.

Next, consider getting into the habit of charitable giving. You can choose from a variety of charitable organizations such as your local church, synagogue or temple, animal shelters, food pantries, homeless shelters and more. If you want to make charitable giving part of your budget, decide on a percentage of what to give each week, perhaps two to five percent.

The remaining money is divided between things you need and want. Again, you will need to prioritize… which of the expenses in Shawn’s budget example would be more important? Which could be put off until next week or until more money is saved?

Shawn's Revised Budget:
Income (list source
$ Amount
Expenditures (list expenses)
Amount Spent
Babysitting$20Savings$10
Allowance$20Charity 2
Pizza with friends 12
Movie 10
Soda & candy 5
Total $40 Total $39

The revised spending plan shows $1 remaining; not enough for music downloads this week, but Shawn can save it until next week. Shawn can also bring a water bottle from home and save money. Plus, he didn’t have to ask for additional money from his parents. Now, Shawn can feel good about saving some money for college; feel great about donating some money to a worthy cause and still have cash for going to a movie and pizza parlor with friends.

Now, you try it…track your expenses this week so you can see where your money came from and where it went. Make a plan every week for the next month and you will be empowered to control your money.

My Budget:
Income (list source)
$ Amount
Expenditures (list expenses)
Amount Spent

My Revised Budget:
Income (list source)
$ Amount
Expenditures (list expenses)
Amount Spent
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