It Pays to Manage Your Money, Take it From This Teen

Editor’s Note: The author of this post, Angela Lin, 18, is a 2016 graduate of Clements High School in Sugar Land, Texas. In May 2016, she won the H&R Block Budget Challenge and was named the most “real-world ready” out of more than 150,000 high school students in the competition. Angela earned a college scholarship and now attends the University of Houston, majoring in management information systems and marketing.

I would love to buy a new outfit every month. But, I realize other things are more important to me now — like going to college. That’s why I’m so much more careful about what I spend, when I spend it, and how much I save.

Like most teens, I never thought much about money or personal finance, much less about managing a budget. Now I do.

I have some advice for other teenagers (or anyone who wants to be more financially responsible) on how to manage your money. Relax … it’s really not that hard if you take the time to do it right. Trust me.

1. Make a Flexible Plan

I use a spreadsheet to track my spending and my personal budget. Like almost every other teen out there, I don’t have all the money in the world to spend. If I want to go on a senior trip, I have to cut back on other things. Or, what if my car breaks down? Not fun. But it happens. Life happens. You need to save money in an emergency fund, so you can pay for life’s little “fun” surprises.

2. Prioritize

You have to set rules for yourself — and here’s the hard part — stick with them. Decide what’s important — that new dress or that future vacation. Do I want this impulse buy that caught my eye right now? Or do I want to save for something else? It’s helpful to weigh the benefits and the consequences before you do anything.

3. Use Your Phone

If you’re like me, my phone is a part of me. So, when you’re bored, why not spend a couple of minutes on an app that can help you manage your money?

Research apps that link your bank accounts and credit cards together and are viewable in one place. These apps allow you to see how much money you have and what you’ve been spending it on. You can then categorize it to see what you have spent the most on — fun or food? It’s fun, useful, and most importantly easy to use!

4. Do Your Homework

Carefully research something before you make a big purchase. Last spring break I needed to get a new phone and saw one promotion where I could save a lot of money on the cost of the phone. It seemed like a good deal at first, but when I read the terms and conditions, it would have required me to sign up for a long contract and apply for a credit card too. So I found another deal where the phone cost more money, but I didn’t have to sign up for a contract — making it actually cost less in the long run.

Through my business education class and taking the H&R Block Budget Challenge, and just from paying more attention to costs, I’ve learned a valuable lesson: sometimes the cheapest price isn’t always the best deal.

5. Live Within Your Means

Many kids going off to college don’t have the experience of managing their own funds. They may spend as if their money will never run out which could cause them to exhaust their funds and have to ask their parents for more. Yikes. It’s important to learn to distinguish between wants and needs and stay within budget to reach your goals.

6. Go For It!

Another thing I learned from my parents and my teachers is that you should strive to reach your dreams. Even if it takes a lot of time and money to achieve my goals, if I keep a close eye on my finances, I plan on graduating without any debt and starting off on a great career path!

Teens may think managing money is boring. But it’s not. It’s actually pretty fun — especially when you take the time to make smart decisions.

I’m not saying you have to stop buying those cool T-shirts and awesome video games or stop doing the things you love. Just know what you have and what you need before you spend your money.

The H&R Block Budget Challenge, part of H&R Block’s Dollars & Sense program, helps teens get real-world ready from the safety of a classroom. Through the free online game, students pay bills, manage expenses, save money, invest in retirement, and pay taxes as if they were recent college graduates.