Money Management for Young Adults

Silver And Gold Coins 300x199These are the things young adults need to know before they shuffle off to their respective dorm rooms and try to live on pizza and Cheerios for the next four years.

Maintain a Simple Budget

Budgeting has a tendency to get increasingly complicated as you get older and start accounting for mortgages and retirement savings and all that good stuff. For a recent high school graduate, however, the basics should suffice.

In its most basic form, a budget is just a plan for your income. Teach kids to think about how their purchases impact one another – how $20 here is $20 you won’t be able to spend there. Most importantly, they need to be able to see how their spending matches up with their earning (even if that "earning" comes from loans, grants, or allowances).

Separate Want from Need

One of the sharpest reality checks you receive when you become “independent” is the realization that your needs are no longer being taken care of by someone else. When you’re young it’s easy to spend money on wants, because you don’t really have to spend money on needs.