Attention: Young People
Are you a good spender? Try This Young Spender's Profile
Written by Paul S. Richard, Executive
Institute of Consumer Financial Education
|Practically everyone loves
to spend money usually, surveys say, "because it's
fun." Spending money is even more fun and exciting,
however, when it is carefully planned in advance, because
it will buy even more. But the advertising messages are
seemingly Irresistible, that millions of Americans, young
and old, routinely take on expensive short term credit
card debt in addition to wasting 20 to 30 percent of their
money, because of poor spending habits and Practices.
Consider the extent to which some merchants and credit
card issuers will go in order to entice people to spend
beyond their incomes: no fee and low fee credit cards,
instant credit approvals, first time buyer programs, sweepstakes
and contests where chances of winning are increased with
each credit-based purchase, extended manufacturers warranty
programs, replacement insurance programs and, of course,
"cash-back with every purchase."
Everyday spending decisions, especially credit based ones
will have a far more negative impact on your financial
future than any investment decision you may ever make.
Take heed: Spending is the key to savings, spending is
the key to a prosperous financial future.
It is not just credit-based spending decisions that get
people into trouble. Some people who have either exhausted
credit or ruined their credit rating have no trouble over-
spending at all. Cash slips through their fingers so fast
that at the end of the day, if they started out with $30,
they often have less than $3 remaining and will have great
difficulty determining just where it was all spent. Does
that sound familiar?
Spending Perception Scale
Following are 20 statements pertaining to spending
techniques. There are five responses to select from which indicate
the degree of your likeness to each Statement. Just mark the number
on a sheet of paper. Should a statement not apply to your
situation, skip it and adjust the scoring accordingly. The scoring
section follows afterwards.
- Totally like me
- A lot like me
- Equally like and unlike me
- A little like me
- Not like me at all
1. ____ Each time I receive any money, I usually
put a small amount ` of cash aside as savings.
2. ____ Each time I receive any money, I usually deposit
it into a checking or savings account.
3. ____ I keep track of the money I receive from all sources.
4. ____ I set aside a pre-determined portion of my money
for regular weekly expenses.
5. ____ 1 set aside ten percent of the money I receive for
6. ____ My money is managed (both spending & savings)
according to a written spending-plan.
7. ____ My food and grocery spending is planned in advance
and done with a list.
8. ____ I rarely make less than two trips a-week to the
grocery or convenience store.
9. ____ Grocery and other coupons are utilized whenever
10.____ Comparison shopping for quality, value, price, etc.
is something I do for practically every purchase, large
11.____ I do not have any credit cards with a balance owing.
12.____ I do not have any loans with balance owing.
13.____ I have comparison shopped for food and clothing
in the last year.
14.____ I don't dine out (breakfast, lunch or dinner) two
15.____ I have received an earnings statement from Social
16.____ I account for all my cash spending by collecting
17.____ I balance checking/share draft accounts with each
18.____ I have looked into joining and/or am a member of
a credit union.
19.____ I am saving money towards my college education.
20.____ I have given money/food to needy person in the last
17-27 VERY PERCEPTIVE.
Time to teach others how to do it.
28-42 Pretty Good. Concentrate on improving
a few of the weaker areas and you'll be amazed at the
43-58 Average. An hour a-week focused
on improving spending would equal an increase saving and
give you more to invest.
59-75 Lousy. Immediate changes required
to avoid financial disaster - implement a spending-plan,
get on a pay-as-you go basis as soon as possible.
75 + It Stinks! go to: Spending-by-choice,
and also Signs
& Symptoms of Money Troubles