What They Don’t Teach in School:
HOW STUDENTS CAN MANAGE MONTHLY POCKET MONEY
Aliya Putri
When someone says “pocket money”, most people would think of the term as a necessity for students. There are some ways parents give their children pocket money based on a specific period of time; it can be daily, weekly, or even monthly. Usually, when their children grow older, parents prefer to give them pocket money every month. Every parent also has different rules about pocket money, whether they can give more of it when their kids ask or not. This article will be focused more on the later case, i.e., when the pocket money is already fixed for a month without any additional ones. In this case, students should be aware of their expenses. But does every student know what they will do or buy with the money? Do they realize that the money should be able to fulfill their needs and wants in a month?
As a teenager that can already distinguish between needs and wants, they must be equipped with basic financial management skills so that they can use their money wisely according to their needs and the number of their expenses will not be the same or even greater than their cash inflow. By applying this basic finance management, perhaps students will never experience things like dissipation or running out of money even though there are still some things that need to be paid. Doing this method will also aid them to be trained in managing finance until the future. Another benefit is students will know how to prioritize stuff of expenses.
Here are some tips to manage your monthly pocket money!
1
Hold the principle that you are not allowed to spend more than what you get
This principle will help you to control your expenses and avoid using your savings/emergency fund just to buy useless things you want
2
Make a list of your supposed spending in this month
You can add everything but make sure you can distinguish between things you need and things you want but they’re not too important.
3
Prioritize the money you spend based on your level of need
You can create several priority groups as follows:
-
FIRST PRIORITY
For things that are important and ultimate whether you like it or not. Things that are included in this group might be your first destination for spending money
-
SECOND PRIORITY
For things you need and want and you have money to purchase with.
-
THIRD PRIORITY
For things that you do not want, but necessary for you. Sometimes, this group loses its priority over the fourth group because a lot of people prefer to spend their money on something they want but need rather than spend their money on something they need but they do not like.
-
FOURTH PRIORITY
For things that you do not need, but you like/want. Most people buy stuff in this priority group just because they are cute or eye-catching. They can be something like an outfit, accessories, footwear, or cute but useless things.
4
Separate your money based on groupings and put them in envelopeS
You do not have to put the money in the envelope but doing it can help you much. It helps you to take only the amount of money as needed. You can also give a label/description in front of the envelope to make it clear what you are using the money for.
5
create your financial records every month after you use the money
Make sure you make a record of your income and expenses also every transaction you did within one month.
If you do this method regularly, you will be able to control all of your expenditure and know clearly what your money is used for. Doing this will also help you avoid stuff like having greater expenditure than income. In the end, you will be helped not to be extravagant anymore. Even though these kinds of financial management are a set of pretty old and conventional methods, they are the easiest and most suitable to be applied to school students.