You and money
Tuesday 8 January 2008
Trying not to spend all your money is good but it doesn’t necessarily mean that you are good with money. To be good with money it’s vital that you think about how you spend it. Find out more.
Good with money?
Martin Lewis is a financial whizz who writes blogs for the News of the World and runs his own much respected website - MoneySaving Expert.com. In July 2007 Martin ran a Teen Cash Class which was broadcasted on ITV1.
“Being good with cash is just as much about how you spend, as whether or not you spend,” says Martin “It’s about how well you understand the value of money, and what it can be used for.”
In Martin’s Teen Cash Guide he uses two examples to illustrate his point.
• Sally the Saver: She has £400 for a holiday. She spends £250 on a budget flight to Rome, and stays in a youth hostel managing to save £60 of it.
• Silvia the Savvyspender: She also has £400 for a holiday. She manages to find a bargain business class flight to New York, stays in a nice hotel with a pool and gets discount theatre tickets but spends the whole £400.
Which one is better with money? The answer depends on the person’s circumstance.
If Silvia’s in debt, and splashing out on a holiday, she’s not good with money even though she got the better bargain. Being cash savvy is therefore both about understanding what money you have, and how to use it.
I’m skint
If you are skint try not to spend any more unless you really, really (really) have to! Ask yourself these questions:-
• Do I need it? - If you don’t need something then don’t buy. It’s that simple. If you buy something you don’t really need then you are effectively wasting your money.
• Can I afford it? - If you can’t afford something then also don’t buy it. According to the Teen Cash Guide, “If you buy something you can’t afford, you begin a cycle of living beyond your means. Eventually, you’ll have to borrow money to do this; and you could end up in debt crisis!”
• Can I get it cheaper somewhere else? - If you are skint but still really must buy something then the best way to minimize the impact on your pocket is to shop around for the best bargain. You can often find the best bargains on line. Go to your High Street first, take note of a few prices then get on line and see if you can find the same goods cheaper. Price comparison sites are often a good way of going about this.
I’m not skint
The same rules apply if you’re not skint and if you live by them it will mean that you’re very likely never to go in the red or be short of cash.
For those who are not skint ask yourself these slightly different questions:-
• Will I use it?
• Is it worth it?
• Can I get it cheaper somewhere else?
“Think about the differences between this one and the skint mantra.” advices the Teen Cash Guide. “Here the questions focus on whether it’s going to be a good buy, not whether you should buy.”
For more advice on how to handle your money, work through Martin Lewis’s Teen Cash Guide.
