5 Great Money Tips for Young People

RCU Spokester Shelby Wodarck wants you to get money smart so you can have more cash fun

Shelby Wodarck, photos by Andrea Paulseth

Shelby Wodarck 

1. Know your Budget and Make it Realistic

We all have heard it time and time again: Budgeting this, budgeting that. But what if there actually is something to this? Do you really know what your budget is? How much can you really spend on a night out on the town or at a restaurant? Have you ever taken the time to really map it out? If you were like me, you probably didn’t know how to answer any of this. I kind of had an idea on what I maybe had coming in, but I had no idea what I had going out.

How did I solve this problem? By kicking it old school and breaking out the checkbook, that’s how. I simply kept track of my spending in addition to my income. I always thought that I could just do it by memory, but let me ask you this: Can you tell me how much you spent on dinner two Saturdays ago? If not, how are you going to remember an entire month of expenses?! Keep it simple, track your expenses, make a budget, and keep it realistic.

2. Be Careful with Credit Cards

Credit cards are an excellent way to build credit history, but you have to be cautious of what you’re doing with them. I know there are many in-store credit cards that you can open, and if you are not careful, you can easily max out. There were a few different stores that I personally got in trouble with, and let me tell you, it was not good. Credit cards are awesome if you keep your balances low and pay off the total amounts you have on them each month. If you can’t afford to pay off your credit card each month, you are spending too much and could end up drowning yourself.

Credit cards are not an income; they are a line of credit that you have to pay back. This may seem like such an easy concept, but many people seem to get this horribly confused. Be careful with credit cards.

3. Stop Someone Else from Spending Your Money

Identity theft is a real problem. One big misconception is that identity theft only happens with online purchases. This is inaccurate. If you drop your credit card or debit card, someone can run it at a store and sign as you. What about your PIN protection? At most locations you can select cancel for credit, or if the purchase is small enough, they don’t have to enter your PIN at all.

What is my solution on this? Get smart and prevent the attack from happening. When you go out with your friends, only bring one card that you need. Leave your debit card at home, and bring a credit card with a small limit instead. Be sure to keep an eye on your finances. If you don’t have an app for your financial institution, get one and use it! The closer in touch you keep with your finances the better you will be at protecting them.

4. Buying a Car

Having a sweet whip has always been an ideal thing. I have never once had a fancy car, but that is because one has never been in my budget. It is really simple people: SHOP AROUND. It is so easy to get swept up in something shiny and fast. But shiny and fast doesn’t mean affordable and fuel-efficient (gas is expensive, always take that into account). Don’t go getting yourself into huge amounts of debt over a shiny car. Check your interest rate and always talk to your financial institution about how to properly fund your ride. You don’t want to take five years to pay off a three-year loan.

5. House Hunting

So we can’t be homeless, we have to have a roof over our heads. No matter if you are looking for an apartment to rent or looking to buy your first home, there are a few factors that will influence your ability to rent/own. One of the first things you should do is look at what your total monthly payment would be. Are water, electricity, trash removal, snow removal, and other utilities included in your rent? And if you are looking to purchase a home, remember to add these costs on in addition to your mortgage payments. You should be able to find out all of this information from your landlord or get an estimate from your utility company. Once you have figured this out, try to budget it out for six months; this will give you an idea on what you can or can’t afford.

Well there you have it. A few tips to make you a bit better educated in the world of finance – helping you get money smart so you can have more cash fun!

Shelby Wodarck is the “spokester” for Young & Free Royal, a financial literacy program aimed at people 25 and under, sponsored by Eau Claire-based Royal Credit Union. Learn more at www.youngfreeroyal.com.