It is time for stretching your dollar where we give
you tangible tips to help you make the most of
your money. Well, it's college Decision Day and
in a few months, millions of high school grads
will be living away from home and managing their money
for the first time. A recent survey of 20,000
college students by ever showed how under prepared many actually
are for this milestone with just about 33% saying they
felt ready for the task. So joining me now
is Dan managing partner at the financial consulting from and
company Dan. It's good to see you and look
, it's a very important topic and probably a good
time to get started. Why is budgeting so important
? Especially when you are young? Well, it's
first of all developing good financial habits. I am
a strong proponent that in high school there should be
some teaching some course, some semester, some marking
period, whatever you want to say about personal finance
and how to handle your finances. And part of
that should also cover, for example, how to
determine how much what you should spend on going to
college in the first place. And taking on debt
. So I think a lot of our high school
students don't get that. So now they get dropped
into college and they've never had to manage their money
at all. So the key here is, is
you have to set up a budget and you have
to understand how to work through a budget. Now
, you can use something like an Excel spread cheat
to do that or, you know, the young
people these days, certainly there are many apps out
there that you can simply follow to figure out how
much you should spend. Ok, so let's talk
about this fact that if you are in college,
you might have a job, you might have a
work study, but a lot of college students,
they don't have an income dan. So in that
case, how do they manage allocating money to different
buckets? Uh Well, how about this one?
Maybe they should have a job. So it should
start with that. So if you're looking at,
for example, setting up your budget, so start
with what your expenses are gonna be. How much
do you need for your housing costs, for example
, those fixed expenses? And then what about the
extras? Like when you're ordering pizzas or, and
you wanna go out for a drink, iced tea
? Um And then what you have left over if
anything based upon how much income you're gonna have,
if you don't have a job, the first question
should be maybe I should. Yes, I think
a steady stream of income definitely is a good way
. Not just to manage your money, but also
time management, which can be an important lesson in
college as well. So, for anyone who thinks
I'm ok with money, I don't feel like I
overspend and I don't want to do the tedious task
of writing every single expense and budget down. What
would you tell those people? This is what I
would tell those people. You don't think you need
a budget. You do and it's no different than
why you have to weigh yourself every day. Because
if you don't track your weight, if you gained
a pound or two, you're aware you get right
on that. Do a little more exercising, a
little less eating. It's the same thing related to
budgeting with your finances. You want to be tracking
that consistently when you realize you overspend. Uh Oh
, something's got to give here. So my advice
is you must have a budget and you must track
it and the best way to do that just in
general. And we see that now is the 50
30 20 rule. You spend 50% of what you
have on necessities, like your housing and your food
, 30% on the things you wanna have like dining
out or entertainment and then 20% you need to save
whether it's retirement, whether it's an emergency fund,
whatever the cases, that's a great place to start
until you can figure out how to manage. And
dan the importance of course, of managing money,
being familiar with your money and setting up a plan
if you do have student loans, which many people
in America do. What's the importance if that's a
burden that you are saddled with? Well, the
first thing you gotta set your mind to is you're
gonna have to pay it back. So don't go
into, uh, a, a mindset of saying
I'm gonna take all kinds of debt and it'll get
forgiven. That is not a good planning tool.
You have to figure out what you think you're gonna
make in your earnings. And there's plenty of information
out there and say, how much do I now
have to allocate to be able to pay my student
debt back because that debt never goes away. You're
stuck with it. So you're gonna have to pay
it until it's until that's completely gone. All right
, Dan, rude. Great tips. It's an
exciting day. It's college decision day. Uh,
but always good to keep it in perspective. Dan
is managing partner at the financial consulting firm and company --> .