Managing Money

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Why Does Money Management Matter?

Buying a car, getting an apartment, going to college, and getting a bank account are all part of the exciting adult experience, and they require managing your money. Developing financial knowledge, skills, and habits is an important part of transitioning into an empowered young adult life, where you can get ahead and sidestep financial headaches. The tools and resources listed here support your journey to financial well-being.

Budgeting

Budgeting is seeing where your money gets spent and how you can save for big purchases, such as buying a car. To re-cap the video above, you need to:

  • Know how much income you have.
  • Know what your expenses are.
  • Prioritize your needs and wants.
  • Check to see what you are spending each month.
  • Assess your finances monthly - are you coming out ahead and saving money?

Paychecks

When you receive a paycheck from your employer, taxes and other deductions will be taken out, and you should make sure you understand how to read your paycheck stub. You may receive a paper paycheck stub, or you may be able to view or download it from your employer.

Living Expenses

To help with budgeting, you can use the Texas Reality Check website you figure out how much you need to cover your living expenses in various cities in Texas, and how much certain jobs actually pay.

Saving Money

In addition to setting up a savings account yourself, you can look into match savings programs (IDAs), which are designed to reward you for saving money.

For more in-depth information about budgeting and managing your money, check out Hands on Banking for youth (available in both English and Spanish) and The Mint. The Mint also has an app.

Check Your Credit Report

Your credit report has a credit score from 300 to 850 that indicates your reliability and history of paying off credit and loans, as well as any debt you may currently have. Banks and credit card companies use your credit report to help them decide if they will loan you money or issue you a card, and how much they will charge you. This is why it is important to check your credit report annually - the better your credit report score is, the easier it is to get credit or a loan and with lower fees!

If you are between 14 and17 ½, ask your caseworker if a credit report has been run for you.

If you are 18 or older, you can check your credit report on Annual Credit Report.com. It’s free.

LOANS

If need to get a loan, you want to make sure that you will not get in a situation where you own a LOT more money than you were expecting. In particular, never co-sign on a loan and avoid payday loans. There are other possible loan options that are much less risky, so do your research!

Never Co-Sign on a Loan

Never, never, never co-sign a loan for anyone. No matter what! Co-signing means you agree to pay for whatever the person is buying if they aren’t able to pay for it.

Here’s an example of how this can get you into trouble. Let’s say your boyfriend or girlfriend buys a car and you co-signed for it. You break up and find out they can’t pay for the car. Your credit score will continue to drop lower until the payments are made and the car is paid off. The car will be re-possessed, meaning someone will come and take it wherever it is. This will affect your credit score for years.

Avoid Payday Loans

Although payday loans are quick and meet an immediate financial need, they also come with very large fees and the risk of your check being cashed before you have the money to pay it - which could result in more fees from your bank. Do your research before considering these type of loans, and avoid them if you can!