Which Type of Spender Are You? Once you’ve done all the math, which category do you find yourself in? Negative Natashas Are you spending more than you have? If so, it is time to cut back on those wants! Take a good look at your expenses column and look for places you can do some trimming. Making do with fewer shirts and meals out with friends can add up to serious savings. Also, pay special attention to those "little purchases" like soft drinks and donuts. These small cash purchases add up quickly even though it doesn't seem like you're spending anything. If cutting back too much seems difficult, then perhaps it's time to think about bringing in some more money. Balanced Bettys Good news: You're not spending more than you have. Bad news: You're not saving anything either. After all, you need savings to pay for that class trip, or cool car. Start budgeting by paying yourself (or your savings account) each month even if it's just $25 a month. At the end of the year, you'll have $300 in the bank. Skillful Sonias Spending AND saving? Keep up the good work. You seem to already possess strong budgeting skills. You go girl!

Creating a Budget

By Karen Newman

It’s 2006! The dawn of a new year and new beginnings. While thinking of all the positive resolutions you'll make this year, consider a fresh financial start. It’s easy and can help you save for the future. Want to know how to do it? Read on…

Spend less, save more. Sounds like such a good idea, and yet it somehow never seems to happen, does it? This year, in addition to vowing a kinder, gentler 'tude towards your sibs, how about committing yourself to actually spending less and saving more—you know, instead of just thinking about it.

Kicking off the New Year with a plan of action is a great way to get your financial ducks in a row—and the perfect way to do that is by creating a budget. And it's simple: A budget is just something that tracks your earnings (how much you bring in) and expenses (how much you spend).

Knowing what money you have, where it goes, and how much you need to bring in to keep yourself out of debt is a major step toward successful money management. It's also key if you're going to start saving those hard-earned dollars! How do you start? It's as easy as 1,2,3.

1. Jot it down. Keep a log of all of your expenses—no matter how small—for a week or a month. Record the date, where you spent the money, what you bought and why, and how much it cost. You can do that by keeping all of your receipts. Or you can carry a small notebook with you, or even devote a section of your school planner to expenses. The point is to make it easy—if it's hard, you won't do it. Make sure to keep a log for a minimum of two weeks and ideally a month or two. This will give you a much better picture of your spending habits.
   
2. Note if it's a need or a want. Are you are spending money on things you need or things you want? After all, there is a big difference! Wants are things like going to the movies or out to dinner, buying a new CD, candy, a manicure, or a "must-have" new sweater. But just because you think the sweater is a "must-have," it is not something you need—not even your cell phone is a need, even if you think you couldn't live without it. Things you need are: food (like groceries), shelter, items for school (a notebook and pen), and some clothing. Label each item as a need or want—and be honest.
   
3. Do the math. Add up how much you spent in any given month (only kept track for a week? Multiply your totals by 4.5—that will be roughly what you would have spent in a month). Then subtract what you spent from what you had. What’s the total?