How Kids Should Spend Money Wisely

Do you hate it when you really need money, but your wallet is empty? No matter how little or how much money you have, spending it wisely is a good idea; it enables you to get the most bang for your buck. Follow these tips to reduce expenditures in key areas and help in money management for children .

Create a budget.

Track your spending and income to get an accurate picture of your financial situation. Save receipts or write down your purchases in a notebook as you make them. Review your bills each month and add those expenses to your budget.

• Organize your purchases by category (food, clothing, entertainment, etc.). Categories with the highest monthly amounts (or monthly amounts you consider surprisingly high) may be good targets for saving money.

• Once you've tracked your purchases for a while, create a monthly (or weekly) limit for each category. Make sure the total budget is smaller than your income for that period, with enough leftover for savings if possible.

Plan your purchases in advance.

Making spur of the moment decisions can balloon your expenditures. Write down what you need to buy while you're calm and at home.

• Make a preliminary trip before you go on your real shopping trip. Note the prices of several alternatives at one or more stores. Return home without buying anything and decide which products to buy on your second, "real" expedition. The more focused you are and the less time you spend in the store, the less you'll spend.

• If you are motivated to treat each purchase as an important decision, you will make better decisions.

• Do not accept free samples or try something on just for fun. Even if you don't plan on purchasing it, the experience can convince you to make a decision now instead of considering it carefully in advance.

Avoid impulse purchases.

If planning your purchases in advance is a good idea, buying something on the spur of the moment is a terrible one. Follow these tips to avoid making shopping decisions for the wrong reasons:

• Don't browse store windows or shop for fun. If you're only buying something because you find the act of shopping fun, you'll likely end up spending too much on stuff you don't need.

• Don't make purchasing decisions when your judgment is impaired. Alcohol, other drugs, or sleep deprivation can harm your ability to make sensible decisions. Even shopping while hungry or listening to loud musician be a bad idea if you don't stick to your shopping list.

Shop alone.

Children, friends who love shopping, or even just a friend whose tastes you respect can influence you to spend extra money.

• Do not take advice from store employees. If you need a question answered, politely listen to their response but ignore any advice on purchasing decisions. If they won't leave you alone, leave the store and return later to make your decision.

Pay in full and in cash.

Credit and debit cards increase spending for two reasons: you have much more money available to spend than you normally would, and because no visible money is changing hands, it doesn't register as a "real" purchase. Similarly, running up a bar tab or using a delayed payment scheme makes it harder to realize how much you're actually spending.

• Don't bring more cash with you than you need. If you don't have the extra money, you can't spend it. Similarly, withdraw your weekly budget from an ATM once a week rather than filling up your wallet whenever you run out.