Financial: Watch Out for Wasting Money
Handling money isn’t easy for anyone, whether you’re a teen, a college student, or an adult. Being good with money takes practice and effort; no one is magically a financial genius. But it’s easy to lose track of your spending if you’re not paying attention, especially when you’re young and likely don’t have much money to begin with from an allowance or a part time job. If you feel like you’re always short on cash or asking your parents for money, take a look at your spending to see where you might be wasting money without realizing it.
“Treat yourself!” is a common refrain, and while it’s true you should get something nice for yourself once in awhile, it’s easy to let this snowball into significant overspending. This can be particularly difficult if you’re often out with friends to the mall or browsing online shopping.
Peer pressure from friends, even if they mean well, can lead to purchasing too many non-essentials: clothes your friends insist “look just perfect on you,” that extra book, video game or movie that “you just have to see/watch this one,” or going out to eat too often “because you should treat yourself.” Online shopping is particularly dangerous, since shopping sites are geared toward convincing you to buy more — even when you don’t need it — by making sales or free shipping or add-ons seem appealing or “a great deal.”
The bottom line is that if you’re often buying things you don’t need, you’re not spending wisely.
It isn’t just shopping that can drain away your money without you noticing how it adds up. Having a social life is important, and involved anything from going to the movies, to school dances, clubs, and sporting events, or bigger things like car expenses or wanting to go on a trip. While you can and should participate in social events with your friends, these can be expensive and add up to a significant portion of your spending.
That’s not to say “never do these things,” but rather to pay attention to how much they cost and either limit yourself to a few events that are your favourite, save up for specific events, or simply take only a little bit of money with you and leave the debit card at home to reduce your chances of overspending.
So, how can you make sure you’re not wasting your money?
Planning a budget — and sticking to it — is the best way to be sure you’re spending wisely. Make a list of your needs, such as basic clothing, school supplies, or car expenses, versus your wants, like a new video game, sporting equipment, or a social event. Set up separate bank accounts too, one for daily spending and one for savings, and be sure to put most of your money into the savings account to prevent yourself from spending it on impulse purchases. Review your budget and your bank statements regularly to see your spending patterns — if you’re dropping hundreds of dollars in Starbucks or the mall, it will be easy to see.
Lastly, your social life shouldn’t suffer from your budget, but there are ways to cut down your costs. Libraries and community centres offer free or low cost access to books, movies, music, video games, and activities or events. Or just choose to spend your movie night at home with a group of friends and some snacks, instead of at the theatre with fast food.
As long as you pay attention to your spending habits, you will be able to spend wisely and save for the future!