Get Smart About Money

Get Smart about
Money
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Table of Contents
Find a Budget That Works for Me
Stick to My Budget
Get Ready to Manage My Money in College
Talk to My Parents about Money
Use a Credit Card Wisely
Should Teens Have Credit Cards?
How Smart Am I About Money?
How Financially Responsible Am I?
Get Smart about Money
Do I need this EduGuide?
Yes, if you want to learn how to manage your money and become financially responsible. Read on for information about financial
personality, budgeting for teens, and money management.
How does it work?
2 ONLINE EDUGUIDE
l Quizzes help you know where you stand. www.EduGuide.org
l Articles give you the background information you need to make decisions.
Get Smart about Money
Do I need this EduGuide?
Yes, if you want to learn how to manage your money and become financially responsible. Read on for information about financial
personality, budgeting for teens, and money management.
How does it work?
l Quizzes help you know where you stand.
l Articles give you the background information you need to make decisions.
l ShortCuts help you take immediate action. Choose one or go through them all.
What will I learn?
l What my beliefs are about money and how financially responsible I am
l How to create and stick to a budget
l How to be financially prepared to go to college
l How to talk to my parents about money
l How to make good decisions about credit cards
Quick Solutions
l What can I do in fifteen minutes? Take the "How Financially Responsible Am I?” or “How Smart Am I about Money?" quiz.
l What can I do in an hour? Discuss answers to the quizzes with your parents, compile a list of wants and needs and prioritize
them, or brainstorm ten ways to save money and ten ways to lose money.
A budget can be as simple as a piece of paper with headings for income and expenses written on it, or it can be a more detailed
worksheet that you download from one of many Web sites. The most important thing is to find a budget that works for you.
Budgeting for Teens: Create a Handwritten Budget
Most personal budgets are calculated monthly. Assuming you are going to create a monthly budget, remember to calculate your
income and expenses accordingly. For example, you may pay your car insurance yearly, so be sure to take the total yearly cost of the
insurance and divide it by twelve (the number of months in a year) to come up with a monthly cost. It’s also important to remember that
there are fiftytwo weeks in a year, which is different from taking twelve months times four weeks (which only totals fortyeight weeks).
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You will need to do this with any of your income and expenses that are not automatically figured monthly. Also keep in mind vacation
weeks when you may not get paid. For example, if you know you will have two weeks of unpaid vacation during the year, use fifty weeks
them, or brainstorm ten ways to save money and ten ways to lose money.
A budget can be as simple as a piece of paper with headings for income and expenses written on it, or it can be a more detailed
worksheet that you download from one of many Web sites. The most important thing is to find a budget that works for you.
Budgeting for Teens: Create a Handwritten Budget
Most personal budgets are calculated monthly. Assuming you are going to create a monthly budget, remember to calculate your
income and expenses accordingly. For example, you may pay your car insurance yearly, so be sure to take the total yearly cost of the
insurance and divide it by twelve (the number of months in a year) to come up with a monthly cost. It’s also important to remember that
there are fiftytwo weeks in a year, which is different from taking twelve months times four weeks (which only totals fortyeight weeks).
You will need to do this with any of your income and expenses that are not automatically figured monthly. Also keep in mind vacation
weeks when you may not get paid. For example, if you know you will have two weeks of unpaid vacation during the year, use fifty weeks
(instead of fiftytwo) when making your income calculations.
1. Start with any standard 8 ½” x 11” piece of paper and a pencil.
2. Write Income at the top of the page.
3. Under Income, list any sources of income that you receive regularly (paycheck, allowance, holiday money). If you are paid every
other week, be sure to take that into consideration when you figure your monthly income.
4. Add the total income and make a Total Monthly Income line.
5. Skip a few lines and write Expenses.
6. Under Expenses, list each of your monthly expenses on a separate line; these would include anything that you pay monthly
(gas for car, car insurance, cell phone, etc.).
7. Add the total expenses and make a Total Monthly Expenses line.
8. Subtract the total monthly expenses from the total monthly income; the difference is the amount that you should be putting in
the bank each month.
Sample Monthly Budget
Income
Wages/Paycheck $320
Allowance $40
Holiday/Birthday Money $20

Total Monthly Income $380

Expenses
Gas for Car $50
Clothes $50
Car insurance $50
Entertainment* $100
Gifts $20
Cell Phone $20
Donations to Charity $10
School expenses (clubs, sports, band) $10

Total Monthly Expenses $310
Cell Phone $20
Donations to Charity $10
School expenses (clubs, sports, band) $10

Total Monthly Expenses $310

*Includes money for eating out, movies,

technology updates.
Monthly Income $380 Monthly Expenses $310 Difference= $70
Based on this budget, you would be able to save $840 a year. It’s important to keep in mind that your income and expenses may not
be exactly the same each month—some months your income may be a little higher (extra babysitting jobs, more allowance for extra
chores), and other months your expenses may be higher (prom dress, concert ticket). But by creating a budget, you will have a pretty
good idea of how much you should be saving each month. Plus, when you see how much money you can put in the bank in a year, you
will have an incentive to keep saving!
Find a Detailed Budget on the Internet
There are hundreds of Web sites that offer sample budgets for teens and adults: you could spend hours looking through them all.
Since there’s just not that much difference among the various budgets, look at two or three and pick one that fits your lifestyle the best.
For one example of a simple online teen budget, go to http://www.MoneyAndStuff.info. Click on “Budget Worksheets” (under Activities &
Stuff). Next, click on “Budget Worksheet for Teens” (under How to Create a Budget). You will find an example of a filled budget already
filled out and a blank one to use as a template for your own budget.
Source:
MoneyAndStuff.info

Stick to My Budget
The easier part of a budget is creating it; the harder part is sticking to it month after month. With a little helpful advice and proof of
money in the bank, you can be successful at following your budget long term.
Here are some tips to help you budget successfully:
1. Create a smart goalsetting strategy. This might be the most important piece of advice on budgeting that you receive. What
are you saving for? Always keep your goals in mind and remind yourself what it is you are working towards. Put a picture of your
goal on your mirror, in your locker, or as the background on your cell phone. Make sure you set both longterm (college, car)
and shortterm (sweatshirt, pair of earrings) goals.
2. Write down everything you spend for one week. And we mean everything, from a pack of gum to a magazine. It’s amazing
how small things add up.
3. Review your budget often. After the first month, take a look at your final result and see how you did. Were your expenses and
income somewhat accurate, or should you make some adjustments?
4. Make adjustments as needed. Remember, your budget isn’t carved in stone. If you find yourself spending more on clothing
month after month, then it’s time to change things up a bit. You will either need to spend less on clothing (see “Ten Ways to
Save Money and Ten Ways to Lose It”) or cut expenses in another area.
5. Make a list of wants and needs. Be realistic about the difference between a want and a need. You may want that new pair of
hundred dollar dress shoes, but what you really need is a pair of everyday flats for forty dollars. You can tie this list in with your
goals and cross things off as you achieve them. Once you have determined your wants and needs, you can prioritize them from
5 ONLINE EDUGUIDE
most to least important. www.EduGuide.org
6. Decide what’s important to you. If your favorite band is coming to town next month and you really want to see them, make
Source:
MoneyAndStuff.info

Stick to My Budget
The easier part of a budget is creating it; the harder part is sticking to it month after month. With a little helpful advice and proof of
money in the bank, you can be successful at following your budget long term.
Here are some tips to help you budget successfully:
1. Create a smart goalsetting strategy. This might be the most important piece of advice on budgeting that you receive. What
are you saving for? Always keep your goals in mind and remind yourself what it is you are working towards. Put a picture of your
goal on your mirror, in your locker, or as the background on your cell phone. Make sure you set both longterm (college, car)
and shortterm (sweatshirt, pair of earrings) goals.
2. Write down everything you spend for one week. And we mean everything, from a pack of gum to a magazine. It’s amazing
how small things add up.
3. Review your budget often. After the first month, take a look at your final result and see how you did. Were your expenses and
income somewhat accurate, or should you make some adjustments?
4. Make adjustments as needed. Remember, your budget isn’t carved in stone. If you find yourself spending more on clothing
month after month, then it’s time to change things up a bit. You will either need to spend less on clothing (see “Ten Ways to
Save Money and Ten Ways to Lose It”) or cut expenses in another area.
5. Make a list of wants and needs. Be realistic about the difference between a want and a need. You may want that new pair of
hundred dollar dress shoes, but what you really need is a pair of everyday flats for forty dollars. You can tie this list in with your
goals and cross things off as you achieve them. Once you have determined your wants and needs, you can prioritize them from
most to least important.
6. Decide what’s important to you. If your favorite band is coming to town next month and you really want to see them, make
sacrifices in your entertainment expenses so you can get to the concert. If the ticket costs seventyfive dollars, and your entire
monthly expense is one hundred dollars, stay home for a few weeks and put the money towards the ticket. Remember, you can
have anything you want—just not everything you want!
7. Keep it simple. You don’t need an elaborate budget. By keeping things simple, you will be able to follow your budget more
easily. If you are having trouble keeping track of your expenses, chances are your budget needs to be simplified.
8. Ask for help. If you’ve tried everything, and you’re still having trouble staying on task, ask a friend for help. Some people are just
really good at organizing and keeping track of money; ask someone like that to show you what works for him or her.
Sources:
MoneyAndStuff.info
FamilyEducation.com

Learning how to manage your daily finances can help relieve stress and ease your transition to college. Here’s what you need to know
in order to maintain financial responsibility:
1. Set up a checking account. Your first order of business is to set up a checking account. If your parents will be depositing
money regularly, it makes sense to keep your account in your hometown bank. But if you are going to be making most of the
deposits yourself, it may be more efficient to open an account at a bank in your college town. Most banks can help you decide
MoneyAndStuff.info
FamilyEducation.com

Learning how to manage your daily finances can help relieve stress and ease your transition to college. Here’s what you need to know
in order to maintain financial responsibility:
1. Set up a checking account. Your first order of business is to set up a checking account. If your parents will be depositing
money regularly, it makes sense to keep your account in your hometown bank. But if you are going to be making most of the
deposits yourself, it may be more efficient to open an account at a bank in your college town. Most banks can help you decide
which type of account is best for you and your situation—just ask for help when you visit.
2. Develop a budget. Make sure to set up your budget several months before you leave for school so you can see how well it’s
working for you. (For help setting up a budget for the first time, read the ShortCut “Find a Budget That Works for Me.”) Once you
are at college, you may need to make some slight adjustments as you settle into your new living arrangements. Don’t be afraid
to tweak the numbers a bit if you need to.
3. Check into credit and debit cards. Credit and debit cards can be useful when you are at college, but they’re not for everyone.
For help deciding which card (if any) is best for you, check out the article entitled “Should Teens Have Credit Cards?” If you
have a card, read the ShortCut “Use My Credit Card Wisely.”
4. Prepare for a job on campus. Many students work while attending college. If you want (or need) to work, prepare a simple
resume now that highlights your high school academics, extracurricular achievements, and prior work experience. Ask
previous employers or teachers if they are willing to be references and get their contact information (do this before you
graduate from high school). Potential employers will be impressed at how organized you are, which could give you an edge
over other applicants.
5. Look for bargains at school. Some coffee chains offer special pricing to college students, for example, by charging fifty dollars
for a mug and giving free refills all year. If you drink at least one cup of coffee a day, that can be a great deal. Volunteer ushers
often get free admission to plays or concerts. The bargains are out there, but you may have to search for them.
6. Save money on your weekly entertainment. Instead of going out for dinner and a movie, get a group of friends together and
split the cost of a pizza and some DVDs. Most colleges offer free or cheap movies on campus. For other money saving ideas,
read “Ten Ways to Save Money and Ten Ways to Lose It.”
7. Take a personal finance class. During your junior or senior year, sign up for a class that will teach you how to manage your
money. Classes such as personal finance and basic accounting teach you how to write a check, balance a checkbook, and
understand credit card interest and fees.
Some topics can be a little sensitive for teens to approach with their parents; money is one of them. Whether you want to discuss
getting an afterschool job or increasing your allowance, plan your discussion carefully. Here are some tips on what to talk about and
how to make the conversation run smoothly.
Topics for Discussion
l Allowance. If you don’t have an allowance, you’ll probably have an easier time convincing your parents to give you one if you
come to the table with a proposal. You can start high and be prepared to settle for less. If you offer to pay for more items out of
7 ONLINE EDUGUIDE
your allowance (clothes, gas for car), your parents might be more willing to consider your proposal. www.EduGuide.org
l Setting up a budget. Parents can be a great resource for learning how to create a teen budget. Ask them to show you the
understand credit card interest and fees.
Some topics can be a little sensitive for teens to approach with their parents; money is one of them. Whether you want to discuss
getting an afterschool job or increasing your allowance, plan your discussion carefully. Here are some tips on what to talk about and
how to make the conversation run smoothly.
Topics for Discussion
l Allowance. If you don’t have an allowance, you’ll probably have an easier time convincing your parents to give you one if you
come to the table with a proposal. You can start high and be prepared to settle for less. If you offer to pay for more items out of
your allowance (clothes, gas for car), your parents might be more willing to consider your proposal.
l Setting up a budget. Parents can be a great resource for learning how to create a teen budget. Ask them to show you the
basics of budgeting. If they don’t have a budget set up for themselves and aren’t sure how to help you, check out the ShortCut
“Find a Budget That Works for Me."
l Setting a limit for purchases. Should you consult your parents on every purchase you make, regardless of the cost? It is your
money, but your parents might want to guide you when it comes to larger purchases (over fifty or over one hundred dollars, for
example). Work with them to create a limit you all can live with before purchases become an issue.
l Defining financial responsibilities. What should you be expected to pay for? Car insurance, gas, entertainment, clothes? This
will depend, in part, on how much income you bring in each month (assuming you have a job) and how much your parents can
afford to help you.
l Getting a job. If your grades are solid and you find yourself with some free time after school, your parents might be receptive to
you looking for an afterschool job. Tell your parents that earning money in high school and college is a great way to show
responsibility and maturity to future employers.
l Setting up a checking/savings account. Ask your mom or dad to go to several banks with you and learn about different
checking and savings account options. A parent can also give you a quick lesson in writing a check and balancing your
checkbook.
General Tips
l Always plan what you want to discuss before you sit down with your parents.
l Always talk facetoface; don’t discuss serious topics through email.
l Don’t beg. If your parents say no to something you want, respect their position and don't revisit the discussion for at least a few
weeks.
l Be specific about what you are asking for. Don’t get off topic and forget what you were originally discussing.
l Start the conversation on a positive note by thanking your parents for taking the time to listen to you.
l Be prepared to accept less than you are asking for, and be grateful for what you get.
l Be on your best behavior prior to the meeting. Show your parents how responsible you are.
l Turn off TVs, phones, email, etc. before you start your discussion; distractions can make everyone tense and take away
from the seriousness of the meeting.
Source:
WikiHow.com

WikiHow.com
Use a Credit Card Wisely
Stay Out of Debt
So you’ve decided you're ready for a credit card. Read the following tips before you sign up, and your plunge into credit will be a safe
one:
1. Evaluate how well you currently handle your finances by taking the “How Financially Responsible Am I?” quiz, and follow the
recommendations at the end.
2. Talk to your parents. Ask them to explain their credit card statement to you. Ask them about interest rates, interest charges,
hidden fees, and minimum balance.
3. Ask your parents to monitor your credit card charges for one semester. If you are ashamed to have them see what you are
buying, you probably shouldn’t be charging it.
4. Open a checking account. If you already have one, great! If not, you need an account (with money in it) so you can pay your first
month’s bill. For help in setting up a checking account, see the ShortCut “Get Ready to Manage My Money in College.”
5. Do your homework. With so many types of cards available, be sure to research more than one or two. Interest.com offers free
teenage advice and recommendations on the best credit cards for older teens and college students. Visit their Web site and
click on “credit cards.” Then click on the article entitled, “The Best Credit Cards for College Students.” Be sure to read about
their favorite picks for credit cards, and see which one is best for you. You might also find it helpful to follow the “student credit
card programs” link for more details on several recommended credit cards. Only consider cards with a low limit (up to five
hundred dollars to start with).
6. Make a commitment to use your card wisely. Put your plan in writing and share this information with your parents:
l Make a list of the types of purchases you plan to make with your credit card. Will your card be for emergencies only, or will you
use it more regularly? A good rule of thumb: never use your card to pay for anything you can eat, drink, or wear.
l Commit to paying your card off every month. Don’t carry a balance over from month to month.
l Have a contingency plan for emergencies: How will you pay off a large unexpected “emergency” credit card charge such as a
car repair or emergency rental car? What will you do if you get into debt?
Sources:
interest.com
about.com

Yes, No, Maybe
EduGuide Staff
Everyone is telling you that you have to have a credit card or two—especially the credit card companies. Here are some facts to help
you make an informed decision.
interest.com
about.com

Yes, No, Maybe
EduGuide Staff
Everyone is telling you that you have to have a credit card or two—especially the credit card companies. Here are some facts to help
you make an informed decision.
Two Good Reasons to Get a Credit Card
1. A credit card is helpful in an emergency (for example, a car breakdown).
2. Having a credit card helps you establish a good credit history. That's provided you pay your bills on time. A good credit history
is important when you apply for a job (some employers check credit scores of job applicants), a car loan, or a mortgage. And a
good score can help you get cheaper car and home insurance.
Two Poor Reasons to Use a Credit Card
1. Reward points. Trying to earn reward points may tempt you to overuse a card just to earn points for stuff you really don’t need.
Plus, you have to use the card a lot to make this benefit worthwhile.
2. Instant gratification. You can have stuff now and pay for it later when you graduate and get a highpaying job. Assuming you do
get a highpaying job, there will be plenty of other things you may need to buy, including business attire, a better car, etc.
Four Good Reasons Not to Get a Credit Card
1. High interest rates. If your card’s interest rate is 21% and you only make the minimum payments, that $500 laptop you can’t
live without today will end up costing you about $757 by the time you graduate and start earning the big bucks. When you don’t
pay off your balance at the end of each month, you pay only interest and never make a dent in the principal.
2. Temptation. It’s too easy to get a card. Credit card companies make it easy to get one with a high limit, and they don’t explain
the interest rate, late charges, etc. It’s too easy to make purchases with a card, so you end up buying things you can’t afford
because you can charge them and pay later.
3. Immaturity. Some teens (and lots of adults, too) aren’t mature enough to handle the temptations of a credit card.
4. Stats. Teenagers’ statistics are against you. One survey (from student loan provider Nellie Mae) shows that 78 % of college
students have credit cards with an average balance of $3,200; one in ten students is more than $7,800 in debt. To put that
information in perspective, if you paid $200 a month on a credit card with a balance of $3,200 at an interest rate of 21%, you
would pay $495.58 in interest over a oneyear period. In other words, your original $3,200 balance just became $3,695.58.
Sources:about.com
interest.com


Due to the dynamic nature of our quizzes, they are only available on the web. Follow the addresses below to take a quiz on our
website.
Sources:about.com
interest.com

Due to the dynamic nature of our quizzes, they are only available on the web. Follow the addresses below to take a quiz on our
website.
How Smart Am I About Money?
http://www.eduguide.org/Parents/TakeQuiz/tabid/114/quizId/33/view/StepTakeQuiz/Default.aspx
http://www.eduguide.org/Parents/TakeQuiz/tabid/114/quizId/34/view/StepTakeQuiz/Default.aspx

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