Financial needs
Financial Education Basics 2
We learn all kinds of things before we graduate from high school. We have proficiency tests for Mathematics, Reading, Writing and a new one on science. We are tested on required subjects, but we do not learn two of the most important things we will ever need. We do not learn parenting or money management (unless we took a short course on living skills.) I will not try to explain parenting, because certainly I am still a work in progress, and my children may tell you I have not taught them all of the money skills they should have, but I am working on teaching them and as we go along I will also try to explain my plans to each of you.
Wants and needs are different for each person. The basics needs are a roof over your head, food to eat, transportation, health care, clothing, a worthwhile job (which can be paid or unpaid and also includes the hard work of completing an education looking for a job) and planning for the future. Most people also include some sort of recreation as a need. Anything else, unless it is required for a job, is a want.
We all have different requirements in these categories. Some of us live in a small apartment shared with others, others have a large upscale home just to themselves. The most important part in determining our individual needs is to figure out what is most important to us, and then what we can afford.
After we determine our needs, we can determine whether we are spending too much money on wants, or if we need to earn more money to pay for our needs. We also may find that we have committed ourselves to wants that we cannot afford (cell phone contract, cable TV, etc.)
The first step for each of us is to determine where we spend our money, and how much money we make. I challenge each of you to spend the next month determining how you spend your money and how much money you bring in each month. The easiest way is to write down everything you spend, when you spend it. Carry a notebook and write it all down. I personally write them all down at the end of each day by category (utilities, food, education, medical care, etc.) See what you can learn from this activity.
Money management comes down to three questions. Number one, do you have enough money? If you do and your bills are paid and you are happy, you are probably doing fine. If not the two remaining questions are: what is a want and what is a need, and number two is determining if you have a deficit in earning, or an excess in spending.
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