Today’s lessons is about leveraging your value to employers to get you a stable part-time student job.
Greg is an award winning educator and the Director of the Ross School of Business. In this role, Greg has pushed financial literacy concepts to the forefront of the program creating personal finance lessons that are geared toward teens and young adults. Learn more at http://www.gregcawsey.com
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Before you can even begin to think of getting control of our money you must first find out where it is going. Drawing up a budget is a complete waste of time if you have no clue where all your hard earned cash has gone. Setting a limit for yourself of $50 a month on clothes – makes no sense if you currently spending over $100 each month. Before you can chart a new direction for your personal finances, you must find out where you and your money are headed.
When I was back in high school – I made some great coin working various jobs for the Town of Pickering. I was rolling in it, and since my awkwardness towards the opposite-sex ensured that I didn’t have a girlfriend, my dough was all mine. When I look back now at all that discretionary income I had I am left with one question – where the heck did it all go?
The reason, I don’t know is that I never tracked my spending. I couldn’t tell you how much I spent on entertainment, clothes, or fast-food. The only thing I could tell you was that I didn’t save a thing. I never could be bothered tracking my spending – because in my day (man, I sound old) we didn’t have debit cards. Everything was paid for with cash – which can be a good thing, but it doesn’t leave a paper trail. When spending cash, tracking your spending requires you to write down in log book or computer the details of each cash payment. Who has time for that?
Luckily for you, we live in the time of debit cards and internet banking. These tools will track your spending for you. All you have to do is use your debit card instead of paying cash for one month. I think you can do that.
Now, I know there are still some instances when you will need to use actual hard cash. You will need to record where the cash went each time you pull it out. So only use cash if you have no other choice during the month.
The key point however, is that you shouldn’t change your spending habits at all. If you have internet banking account all you have to do is go back and look at your transaction history and add up where you are spending your money for a month. Each transaction will have a summary and give you details of where you are spending your cash. If you don’t use internet banking currently its time you got into the 21st century and signed up. Otherwise you can track your spending the medieval way and by using your debit card and collecting your receipts in a shoe box for a month. Then go back and look at them to add up where your money has gone.
Either way tracking your spending for one month is pretty easy and requires little effort. Just do as you do – then go back and take a look. What you find may surprise you.
When looking things over you may say to yourself some of the following common reactions:
“Who knew I spent $300 on going out to eat?!”
“Wow – my phone costs a lot?!!”
“I just spent over $400 this month on clothes that I don’t even wear”
“Yeah, that seems about right.”
Whatever your reaction is at least you now know where your money has gone. Now comes the tough part – deciding if you are happy with your spending decisions. This is a personal decision that is yours to make since it’s your money. Maybe life is good and spending every dime you make partying it up is fine by you. Getting in charge of your finances doesn’t mean you have to make any big changes where you spend – the change will come from how you spend. But before we get there I do need to shed some light on your unavoidable future and the bills that come with it. This is the part missed by older people who complain they were never told about this when they were in high school. Well read on and then be rest assured that now- YOU HAVE BEEN WARNED!!
Text Lesson #1 – How Do You Feel About Money
Today, I want to discuss a topic viewed by many as a very personal matter.
Some adults believe discussing it in public is just plain rude. Some parents avoid talking to their kids about it at all. Their children are kept in the dark, left to find out what they can from the world around them. What is this private, controversial topic of extreme personal consequence?
The topic is money — specifically, your money.
Surprised? What did you think I was going to say? Unfortunately, adults have trouble discussing important personal matters with young people. Anyone who has sat through one of those uncomfortable facts-of-life talks with their parents already knows what I’m talking about. Well, at least you had “the talk.”
When it comes to money, too many families avoid the topic of personal finances altogether. It’s understood in some circles that discussing money is taboo. It is looked upon as being crass, rude or tasteless.
Unfortunately, this lack of discussion can cause people to be ill-informed and make bad financial choices. This ignorance is then passed on to each generation until someone is willing to break the silence and discuss the financial facts of life with their children.
We live in an economic system that revolves around money. You can’t escape it. Even those who go off to live in their own communities without electricity and modern conveniences still use money.
Money surrounds us, and it’s not going away. But before you can look at developing your own financial independence, you should examine your own attitudes toward money.
Everyone has different emotional attachments with money, and for many these feelings are negative. Just recall many of the holiday movies that were just aired and the negative associations made — some call a wealthy person “filthy” or “stinkin” rich. “Making a killing” is commonly used to describe a profitable situation.
Many believe that money corrupts you or steals your soul. Others feel a sense of guilt with the belief that having large amounts of money means that you are taking advantage of your fellow man. Maybe you have some of these negative thoughts about money. Where did you get them from?
Perhaps it’s time to develop your own positive associations. After all, it’s tough to become better at managing and growing your money if it makes you feel uncomfortable.
People don’t want the physical substance of money. Stacks of crisp bills are not what people covet. It’s what those bills represent that people are after. For many of us, it all comes down to one thing — freedom. Freedom to do what we want and live the way we want. Money gives people the freedom to make choices that reflect their values.
You may still think that more money brings more problems and it will corrupt you, but think for a moment of all the good you could do in your life with it. Give to charities, create scholarships or fund research to fight a disease. Maybe your goal right now is to have enough money so that you can graduate college or university debt-free.
If you don’t want to focus on earning mass amounts of money, that’s fine. Our focus, going forward, is not to show you how to make a quick buck, but how to manage the money you do have — better.