“How to Be Money Smart,” New Era, Aug. 2014, 10–12
When I got my first paycheck for my first real job (at a sandwich shop), I rewarded myself with a shopping spree. I bought some music and a cute outfit. After spending every dollar I’d earned, I thought about my purchases.
“There goes two whole weeks of work,” I thought. And a sick feeling started to grow in my stomach.
As I thought about all those hours of hard work making sandwiches, my superficial purchases hardly seemed worth it. I vowed to be more careful with my money.
So from then on, I saved every penny for college and a possible mission and never bought anything I wanted ever again.
I was still a normal teenager who wanted stylish clothes, good music, and fun activities with my friends. But coming from a big family, I knew that if I wanted those things, I would have to save money to pay for them myself.
It might sound impossible, but I found ways to be financially prepared for the future and have fun at the same time—even with a part-time job that didn’t pay very much. Here are some tips on how you can increase your “money smarts.”
You’ve probably been told about budgets from the day you earned your first nickel or dime. That’s because it really works. A budget is a plan that will help you make the best use of what you earn and save. Here’s one way you can set up a budget of your own:
Decide on a time frame for your budget. Most budgets plan for expenses monthly.
Add up every dollar you plan to make to figure out your expected income. (Or use last month’s earnings for this month’s spending so you have an exact amount available.)
Calculate how much you’ll need to pay for tithing, along with any other offerings you might want to give.
Create a list of things you think you’ll purchase throughout the month, along with how much they’ll probably cost.
Separate your needs from your wants, because you’ll want to spend your money on needs first.
Subtract the total cost of your needs from your total income.
Set aside a little money each month for your wants.
After paying for tithing and your immediate needs, put most of the money that’s left into savings. Look to the future and set a plan to save for college, a mission (particularly young men), or other big things. Think about how much you need to save every month to meet the financial goals you have for those big things in the future.
Remember that making your budget work takes solid planning, a strong commitment, and self-discipline. It’s tough, but it’s worth it.
If you’re like most teenagers, you’re probably going to want to spend some of your money at the mall, at a store, or online. So you’ll want to know some basic principles about shopping before you go:
Decide what you’re planning to buy before you go shopping. Then stick to your plan and avoid the habit of buying things on impulse.
Buy something only if you really love it. Don’t let your friends, a salesperson, or an advertisement talk you into buying something you’re not going to use often.
Remember that the word sale doesn’t always mean you’re getting a good deal. Look for the best quality at the lowest price. Sometimes that means paying a little bit more for something that will last a lot longer.
Ask yourself if you can live without the item. Remember the old adage: “Fix it up, wear it out, make it do, or do without.”
Here’s a little-known fact: a half-gallon of ice cream from the grocery store tastes almost as good as ice cream from an ice-cream shop. Also a fact: you can often buy a half-gallon of ice cream for the same price you’d pay for a single serving at an ice-cream shop. So if you need to save some money, suggest that your friends all split a half-gallon from the store rather than spending a lot more at the ice-cream shop.
And that’s just one example of simple money solutions. You can be frugal in lots of ways while still having a great time:
Watch the newspaper or look online to find free community or local events.
If you want to see a movie, go to a matinee or a dollar theater for cheaper tickets.
Plan ahead. Make a list of ideas of free things to do with your friends so you won’t rely on spending money to entertain yourselves.
Have fun outdoors without paying much (if anything). Enjoy a campfire in the canyon or on the beach or a free Frisbee game at the park—they can be just as much fun as going to a movie or a concert.
Just to finish, here are some general, money-related guidelines to keep in mind:
Keep track of your money and keep it in a safe place.
You can’t buy happiness, but being willing to share usually results in a smile.
Avoid gambling of any kind.
Be cautious of things that seem too good to be true—they usually are.
The most important lesson about money, however, is to keep in mind that we’re not here on earth to get rich or to have a lot of fancy things. Remember these truths from the Doctrine and Covenants: “Seek not for riches but for wisdom, and behold, the mysteries of God shall be unfolded unto you, and then shall you be made rich. Behold, he that hath eternal life is rich” (D&C 6:7).