How do I manage my money better?

Question

I find that every paycheck I earn I am spending. I have money in the bank it's just that I have a credit card and I have like a $400.00 bill to pay on it. I have enough in the bank to cover it and I'm not sure if I should just pay the whole thing in full or pay the $100.00 statement I have now. I think it all evens out in the end if I pay it now or later it's the same amount of money right? After I pay it off I then want to be able to put my paychecks in the bank. Maybe not all of them but at least half of each one. It's just that I go shopping and I find myself buying something all the time. I work in an office 3 days a week and go to college l so I feel I need 2x as much of a wardrobe because I need clothes for both settings. I always feel like I need more clothes cause I don't want to wear the same things all the time. How can I figure out a decent budget for myself is there a website I can go on that will help me?

Answer 1

1) Find a credit union (CU or FCU) that you can join. They may be more helpful to you in the long run than a bank. CUs are non-profit. Your deposit with a CU is ownership shares. That is why the interest you earn is called a dividend. The maximum legal rate on a loan is 18% for CUs. Banks go much higher.

2) Pay off your credit card every month. If you only make the minimum payment, then most of the payment goes to interest and you will never pay off the balance.

3) Public Libraries save you money. Your library card is the most valuable card in your wallet. (I have 4) Get books, videos and music for free. (Of course you have to return them in 3 weeks, but think of all the money you will save!)

4) Go to the library (save $$) and check out a book or video on "Dress for Success". They will have suggestions on how to build a wardrobe with little money.

5) Avoid the mall and resist impulse purchases. Learn to recognize "marketing baloney". Take a hike instead. Look for free entertainment like museums and art galleries. Check the entertainment section of the paper for free stuff.

6) Set some financial goals for yourself like: how much to save out of each paycheck and calculate what that will be in a year. Plan to save for something important. That will help you resist that hot new top or pair of jeans.

7) Learn about your credit score. Building good credit saves you tons of money in interest over a lifetime. The people with the best credit get the best rates. They pay a lot less in interest, so they have more money to save or spend on what they want. Ask your CU for help.

Answer 2

It's not the same in the end - you should pay off the credit card in full. In the future, only charge what you can pay off at the end of the month.

Regarding clothes, I have seen (but don't remember where -- book, tv show, the web) clothing experts who advise on putting together a a wardrobe inexpensively where you can have variety for various needs by mixing and matching. You may want to do some searching and look into this.

It's very important while you're young to establish a good financial base and buying discipline. If you do this, you'll be much better off in the future and be able to have the things that are most important to you. Otherwise, you always be stressed and worrying about how you'll make ends meet.

Answer 3

If you are spending 100% of what you earn every pay period, you ARE mismanaging your money. You should save 20% of your paycheck every pay period. I suggest putting it into a high yield savings account until you build up enough cash to do otherwise. ING (www.ingdirect.com) has a pretty good rate for savings accounts.

As far as paying your credit card is concerned, I would recommend paying it off and keeping it open. Spend no more than 13% of your approved limit each month and pay it off when the bill comes if you can. If you can't, pay even $1.00 over the minimum payment. Your theory that it "evens out" is inaccurate since you have to pay finance charges on anything you borrow with your credit card. Some credit card companies even charge you an annual fee.

Allow yourself to shop, but limit yourself to 2 pieces per paycheck. Give yourself a budget, mine is $30. I shop at places like "Ross's" and get the most for my dollar. Re-organize your closet into color-coded tops, bottoms, shoes, and accessories and learn to shop your closet for new outfits. I am willing to bet you that you would find a new outfit to wear everytime. C-O-O-R-DINATE! If you still feel that your shopping is excessive, make yourself sell or give away a piece before you can bring a new piece in the house.

Answer 4

You are actually fighting a couple of different (yet related) problems.

In general, it is suggested that you "pay yourself first" which basically means that you save a certain portion of your paycheck before paying the other bills.

However, in your case, I would HIGHLY recommend that you get rid of your credit card debt first. This is beacuse of the outrageous interest rates that they charge! If you can't pay it off completely each month, then contact the credit card company and ask for a lower rate. If they don't give you a decent rate, then drop that card and get a new one with another company!

Your other issues regard spending more than you want (or need). One thing that might help is a budget. However, that tends to freak people out. In general, you just need the disipline to control your spending. For example, if you get the urge to buy something new, force yourself to ask "why" you need it. If you only "want" it, then don't get it. Also, force yourself to compare what that item means in other terms - for example, if you want a pair of shoes... that would be equal to a fancy evening out with friends, or maybe a few movies, or something else that you would enjoy. (And no, you don't really need to buy those other things.) Doing this helps you realize how you prioritize things.

There are many websites that exist that can help you. Most are pretty general (and some are worthless). Search for "personal finance".

Also, if you want more personal feedback, please feel free to email me. I am pretty good at personal finances and investing. :-)

Good Luck!!!

Answer 5

I designed a budget for teens/young adults (anyone with limited bills and irregular incomes) for my son. His GF, who is a college student, has started using it and is absolutely thrilled with her results. It is still probably "beta", uses Excel, and is totally free. Contact me if you want to have a copy.

As far as the credit card goes - you want to get in the habit now of only charging on it when you already have the money to pay it off. Then you want to pay it off every month. The interest they charge is outrageous! Here's an example I heard recently ... say a young couple have a baby and charge $5000 on a credit card to furnish the nursery. Every month they pay the minimum, and they never charge on the card again. How old will the baby be when the card is paid off? Would you believe ... 34 years old??

You want to focus first on paying it off now, and being a smart credit card user by never charging what you can't afford in the future. To do that, it's important to set up an "emergency fund". And you have to understand that you need to only use it for emergencies - like if your puppy is hit by a car. A good sale, or wanting an ipod is not an emergency! Those items should be budgeted and saved for.

It's easy to get in the habit of buying lots of clothes, but if you are budgeting, you can learn to control how much you spend on them!

Good luck.

Answer 6

It's not just going to a website that will help, it's more discipline..
but I"m assuming you don't have other bills to pay...
because if you had rent, cell phone, electric, gas, it does add up in the expense column... and we wouldn't have this conversation...
Lucky for you that credit card bill is not at the killing zone yet, assuming you're making over 100 dollars a week,
yes you should pay all off, or even 300 dollars off it so that you have money still in your account... intrest is high but not at the rate say if you had a 2000 bill...

suze orman of msnbc finance used to have great financial advice, she usually takes questions and answers them, and had a show msnbc, i don't know if she still on, she was in 2006 fall...

I've been there too...
but i don't know it from the girl's side..

but until you get your next high paying job...
you can buy some new clothes, but so how in there you may have to mix in what you bought before, I know you don't like repeats but not spending 50 dollars on that outfit this weekend may have that 50 dollars going to something else you need to pay off...

Answer 7

You need a budget, which is a scary word, in other words you need a plan for your money.

First, read The Total Money Makeover by Ramsey.

Next check out his website for budget forms and start a plan for your money! You don't need 2 wardrobes for school and work- you can wear the same- believe me, I have done it! Not to be mean, but you sound like a princess when you say "i don't want to wear the same things all the time." Everyone rotates their wardrobe and wears the same things over and over (unless you are Oprah or Paris Hilton!). What is more important, savings or clothes? Savings will let you retire in the future or buy a house, more clothes won't.

Check out Dave Ramsey and start planning how to spend your money. Good luck!

Answer 8

Don't use credit cards! Keep enough out of your paycheck for clothes and put it in an envelope. If you use it up, no more clothes for that month!

Listen to Dave Ramsey at daveramsey.com

Answer 9

why did yuh need any website, work out wid ure mind :)
First of alll Bank comes ..... then othr shopping things