CHAPTER 19

How Can I Manage My Money?

How often do you feel that you don’t have enough money to spend?

□ Never

□ Sometimes

□ Frequently

How often do you buy items you can’t really afford?

□ Never

□ Sometimes

□ Frequently

How often do you buy something you don’t need just because it’s on sale?

□ Never

□ Sometimes

□ Frequently

DOES it seem that you never have quite enough money to spend? If you could get your hands on more, you could buy that game you want. If only your wages were higher, you could buy those shoes you “need.”  Or you may face the same dilemma as does Joan, who says: “Sometimes my friends invite me to do things socially that are expensive. I want to be with my friends, having fun. Nobody wants to say, ‘Sorry, I can’t afford to go.’”

Rather than fret about the money you don’t have, why not learn to manage the money that does pass through your hands? You could wait until you leave home to learn how to manage money. But think, Would you jump out of an aircraft without first learning how to use a parachute? True, a person might be able to figure it all out while hurtling to the earth. How much better, though, if he learned the basic principles of using the device before jumping out the door!

Similarly, the best time for you to learn to manage money is while you’re at home, before the harsh financial realities of life confront you. “Money is for a protection,” wrote King Solomon. (Ecclesiastes 7:12) But money will protect you only if you learn how to control your spending. Doing so will boost your confidence and will increase your parents’ respect for you.

Learn the Basics

Have you ever asked your parents to explain what’s involved in maintaining your household? For instance, do you know how much it costs to provide light, heat, and water each month or how much it costs to run a car, buy food, or pay the rent or mortgage? Remember,  you help incur those bills​—and if you leave home, you will be the one who has to pay the bills. So you might as well know how big your bills are likely to be. Ask your parents if you can see some of the household bills, and listen closely as they explain how they budget for them.

“A wise person will listen and take in more instruction, and a man of understanding is the one who acquires skillful direction,” says a Bible proverb. (Proverbs 1:5) Anna asked for skillful direction from her parents. She says, “My father taught me how to make a budget, and he showed me how important it is to be organized in managing family funds.”

Meanwhile, Anna’s mother taught her other practical lessons. “She showed me the value of comparing prices before buying,” Anna says, adding, “Mom could work wonders with a small amount of money.” What has been the payoff for Anna? “I am now able to care for my own finances,” she says. “I carefully control my spending, so I have the freedom and the peace of mind that come from avoiding unnecessary debt.”

 Recognize the Challenges

Admittedly, controlling your spending is easier in theory than in practice, especially if you live at home and receive an allowance or earn money from a job. Why? Because your parents are likely paying most of the bills. As a result, a large percentage of your money may be available for you to spend at will. And spending money can be fun.

A problem may arise, though, if your peers pressure you into spending beyond reasonable limits. Ellena, 21, says: “Among my peers, shopping has become a major form of entertainment. When I’m out with them, there seems to be an unwritten rule that you must spend money if you’re going to have fun.”

It’s natural for you to want to fit in with your friends. But ask yourself, ‘Am I spending money with my friends because I can afford to or because I feel I have to?’ Many people spend money in an attempt to boost their reputation with friends and associates. They try to impress others with what they have rather than who they are. This tendency can cause real financial problems for you, especially if you have a credit card. How can you prevent this?

Take Control

Instead of maxing out your credit card or spending your whole paycheck on one night out, why not try Ellena’s solution? “When I go out with friends,” she says, “I plan ahead and calculate a limit to my spending. My pay goes  straight into my bank account, and I take out only the amount I need for that outing. I also find it wise to go shopping only with those of my friends who are careful with their money and who will encourage me to shop around and not buy the first thing I see.”

Here are some other suggestions you may want to apply if you have a credit card.

● Keep track of your purchases and carefully match them to your monthly statements to be sure that you’re charged only for purchases you made.

● Pay your credit-card bill promptly. If possible, pay it in full.

● Be very cautious about giving your credit-card number and expiration date over the phone or online.

● Avoid using your credit card as a means of obtaining quick cash. Cash advances usually incur a higher interest rate.

● Never lend your credit card to anyone, not even a friend.

But wouldn’t simply having more money solve all your spending problems? Not likely! To illustrate: If you were driving and did not have control of your car or if you were in the habit of steering with your eyes closed,  would putting more fuel in your tank make it more likely that you would reach your destination safely? Likewise, if you don’t learn how to control your spending, earning more money won’t improve your situation.

Maybe you think you already have your money under control. But ask yourself: ‘How much money did I spend during the past month? What did I spend it on?’ Not sure? Here’s how to take control of your spending before your spending takes control of you.

1. Keep a record. For at least one month, record the amount of money you receive and the date you receive it. Describe each item you buy and the amount it costs. At the end of the month, add up the amount received and the amount spent.

 2. Make a budget. Look at  the chart on page 163. In the first column, list all income you expect to receive in a month. In the second column, list how you plan to spend your money; use the entries in your record (step 1) as a guide. As the month progresses, write in the third column the amount you actually spend on each of the planned expenses. Also, record all unplanned spending.

3. Adjust your habits. If you’re spending more than you anticipated on some items and are accumulating debt, adjust your spending habits. Pay your debts. Stay in control.

Money can be a useful servant if it’s used properly. In fact, in most cultures, making and managing money is an important part of life. But try to keep a balanced attitude. “Money has its place, but it is not everything,” says a youth named Matthew. “It should never be put ahead of our family or Jehovah.”

IN OUR NEXT CHAPTER

Is your family poor? If so, how can you make the most of your circumstances?

KEY SCRIPTURE

“Money is for a protection; but the advantage of knowledge is that wisdom itself preserves alive its owners.”​—Ecclesiastes 7:12.

TIP

Make a list of what to buy before you go shopping. Bring only the amount of money you need, and limit your purchases to items on the list.

DID YOU KNOW . . . ?

If you have a balance of $2,000 on your credit card with an interest rate of 18.5 percent and you make only the minimum payments, it will take you 11 years to pay off your debt and will cost you an extra $1,934 in interest.

ACTION PLAN!

I can control my spending by ․․․․․

Before I buy something with a credit card, I will ․․․․․

What I would like to ask my parent(s) about this subject is ․․․․․

WHAT DO YOU THINK?

● Why should you learn to manage money while you’re still living at home?

● Why might you find it difficult to manage your money?

● In what ways can you use your money to help others?

[Blurb on page 162]

“When I’m on a budget, I save better. I don’t buy things that I don’t need.”​—Leah

[Box on page 158]

Money Talks

What do you spend your money on? If you regularly spend money helping others, then your money​—not just your words—​says that you genuinely care about others. (James 2:14-17) By regularly donating money to support true worship, you “honor Jehovah with your valuable things.” (Proverbs 3:9) On the other hand, if you always spend your money on your own needs and wants, what does your money say about you?

 [Chart/​Pictures on page 163]

 Worksheet

My Monthly Budget

Copy this page!

Income

ALLOWANCE

PART-TIME JOB

OTHER

Total

$․․․․․

Budget for Expenses

FOOD

․․․․․

CLOTHES

․․․․․

PHONE

․․․․․

ENTERTAINMENT

․․․․․

DONATIONS

․․․․․

SAVINGS

․․․․․

OTHER

․․․․․

Total

$․․․․․

Actual Amount Spent

FOOD

․․․․․

CLOTHES

․․․․․

PHONE

․․․․․

ENTERTAINMENT

․․․․․

DONATIONS

․․․․․

SAVINGS

․․․․․

OTHER

․․․․․

Total

$․․․․․

[Picture on page 160]

Spending money uncontrollably is like driving blind