Effective personal finance management tips for teens - being fiscally responsible

Today we've got a guest post from Kane Clark, a financial writer from the U.S. If you reside outside the U.S. the issue of student loans may not be that relevant, but I think the the rest of the article should still be.

Normally, I'd try to give an intro, but in this case I'd like to share my thoughts after the article.

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Most college students go through a lot of undue financial hardships due to being poor money managers. While they’re wondering about the fact that they’ll get the opportunity to taste freedom, they fail to understand that not being able to manage their money will do nothing but lead to a mess. Each year there are too many students graduating from college but are they all aware of the ways in which they should deal with their finances?

Given the soaring student loan debt in the nation, it is necessary for each and every student to take care of their money so that they don’t further contribute to the spiraling debt level in the nation. If you’re someone who is not being able to cope up with your finances and you’re confused about the ways in which you should manage them, here are some tips that you may consider.

  • Always stay current on your student loans: The first tip to take into account is to stay current on your student loans, as there are many other loans to take into account. The student loans don’t carry outrageously high interest rates like the credit cards, but yet you should stay current so that you don’t have to worry about the ways in which you can deal with your student loan debt. When you have revolving debt to take care of, it is certainly better to take care of your student loans.
  • Keep track of your pennies: Using paper and pencil to keep track of your pennies is certainly a better option than not keeping tab on your finances. Unless you keep track on your money, you can’t ever be able to maintain a safe distance with debt. Either take a pen and paper or use an online tool in order to help control your finances.
  • Don’t misuse your credit cards: You shouldn’t misuse your credit cards simply for the sake of using them. Although your parents must have gifted you with credit cards but when you’re wondering about reining your finances, you shouldn’t ever misuse your cards. The cards are the main reasons for your surging debt amount. But when your aim is to get out of debt, you should lock them safely at home. Unless you take steps to stop using your credit cards, you can’t stop yourself from drowning in debt.
  • Save money and don’t get influenced: When you’re in college, you must be rejoicing at the thought that you will be able to lead a life free from the undue attention of your parents but this is also the time when you might get influenced by your roomies or your college mates. This is the not something that you should practice as it will lead to a further mess in the long run. Know what you’re doing with your money so that you don’t repent in the long run.

Therefore, when you’re getting confused about your finances and you’re seeking help, get help of the above mentioned options. If you still incur credit card debt, opt for credit consolidation so that you can combine your debts and protect your credit score.


Author Bio : Kane Clark is a financial writer who is associated with few financial community like DebtConsolidationCare. He is having immense knowledge on financial factors and issues. He therefore helps in solving various money related issues for those who are in debt and need help in budgeting and even for business finances. He has written numerous articles on credit cards, money saving tips, budgeting, bankruptcy, insurance and so on.

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At this point, I'd like to add my thoughts. In case you aren't familiar with the term, debt consolidation (or credit consolidation; basically the same thing) is the process of rolling your various debts into one big one and paying it off with a more affordable single monthly payment.

It's got an obvious allure: just one payment to make, and it's a small one. It's also got a hidden negative: the monthly payment is small(er) because the loan is stretched out longer. That means you actually pay more over time. Dave Ramsey himself isn't that fond of debt consolidation. Primarily because it doesn't fix our habits; we're not solving anything and we're just treating the symptom.

But if you're already in debt, there aren't a whole lot of good choices. I myself don't like paying more than I'd have to. But I'd probably draw the line if my quality of life would be affected (real quality of life; not my capability to eat out and buy stuff).

I agree with Kane's advice; just don't get into debt, especially if it's the bad/high-interest kind. If you have debt, be proactive in managing it and avoid taking on more of it. But if you're already drowning in debt, debt consolidation could be an option for you - but don't stop there, correct your spending habits as well.



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