Study Strategies Beginning Financial Literacy Particularly for busy college students, it is easy to lose track of how you are spending your money on a daily, weekly, and monthly basis. Unfortunately, spending this way can lead to credit card debt, overdrawn accounts, and other fi nancial woes. The good news is that there are some simple skills you can apply to create a budget that will help put you in the driver’s seat of your fi nancial life. • Identify your fi nancial goals. Do you want to save for a big purchase? Pay off your student loans or credit card debt? Simply avoid debt in the fi rst place? • Track how you spend your money. For a week, write down every purchase you make in a small notebook that is always with you. This will help you understand how much you spend on small, daily purchases. • Make a list of everything you know you will need to spend money on in the year ahead: tuition, rent, car insurance, and so on. • Make a list of all your income for the year ahead, such as wages and fi nancial aid. • Make a budget by adding up all your sources of income and then everything you spend money on. • If you fi nd your costs are greater than your income, fi nd ways to reduce your spending. • Also consider ways to earn extra income, perhaps by taking on a part-time job, if your schedule permits it. • Review where you stand fi nancially each month, and adjust your budget accordingly. For example, make sure your estimates for how much you will spend on food or entertainment match what you actually spend. • Reconsider your fi nancial goals. Given how much money you make and how much you spend, are your goals realistic? • Be on the lookout for issues that might create budget chaos, such as credit cards with interest rates that spike after a certain amount of time. 714 CHAPTER 10 Signed Numbers www.mhhe.com/messersmith
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