The Importance of Managing Money
Samantha Gillis
Economics B2
In the adult world, managing money is a very important factor to life. By managing your money, it’s easier not to fall into deep debt, or worse. Methods of regulating money are important for your personal savings, businesses, and more. It's essential to understand the importance of your expenses, income, and investments for a productive, successful life.
(https://www.nber.org/papers/w22066)
Americans do a poor job of regulating their finances compared to other developed countries. According to theatlantic.com, households in The United States have the highest percentage (74.9%) out of 8 major countries with some form of debt. Economists say “international variations in banking regulations and mortgage taxation” take part in many of Americans' debts. Along with that, other economists argue that cultural beliefs play a part as well. Unfortunately, the U.S also struggles with credit-card debt as well. Compared to countries like Canada and the U.K., their credit-card debt rates are a lot lower than the U.S. Almost 40% of American households have credit-card debt, while countries like Italy and Spain have percentages in the single digits. You can clearly see the issue with Americans and their money-spending techniques. Many can benefit by regulating the way we use our money.
(https://www.mymoneycoach.ca/budgeting/what-is-a-budget-planning-forecasting)
Budgeting is crucial for your financial success because it ensures that you will always have enough money for the things you need. According to a recent study from ValuePenguin, the median credit card debt reached $2,300 per household in June 2019. Budgeting is when you balance your expenses with the income you have. It’s important to budget your money so you don't overspend with money that you don't have. By not budgeting, it’s easier to fall into debt. It’s especially hard to realize how much you’re spending if you use a credit card. Regardless, budgeting your money will help you in the future.
While owning a small or big business, managing your money at work is very important as well. If money isn’t managed well at work, the business will fail. According to finder.com, simple steps like properly managing your accounting, not spending prematurely, making financial projections and more are easy ways to manage money while owning a small or large business. It's important that you keep track of income and costs. This is why not spending prematurely is crucial. Spending more than you have at the moment will create more financial issues. Besides that, it is also important for you to plan ahead. Anticipating future obstacles will allow you to handle them better. Businesses are a huge part of the economy and it is important that businesses are managing their money well otherwise they will not be successful to the economy.
In conclusion, money is the main reason why the world works the way it does. Managing money allows better financial security, less stress/conflict, and advantages for opportunities. It’s important that we all manage our money as individuals or possible business owners because, overall, it contributes to our economy.
Works Cited
“10 Essential Steps To Manage Your Money The Right Way.” MoneyStrands, 31 Jan. 2019, moneystrands.com/10-steps-manage-money-right-way/.
Bell, Amy. “6 Reasons Why You Need a Budget.” Investopedia, Investopedia, 19 July 2019, www.investopedia.com/financial-edge/1109/6-reasons-why-you-need-a-budget.aspx.
Camp, Aliyyah. “17 Tips to Manage Your Small Business Finances.” Finder, 15 Apr. 2019,
www.finder.com/small-business-finance-tips.
Hill, Brian. “Importance of Money Management.” Budgeting Money, 26 Jan. 2019, budgeting.thenest.com/importance-money-management-3204.html.
Pinsker, Joe. “Are Americans Any Worse With Money Than the Rest of the Developed World?” The Atlantic, Atlantic Media Company, 14 Mar. 2016, www.theatlantic.com/business/archive/2016/03/americans-shortsighted-in-debt-and-bad-at-investing/472680/.
“What Is Budgeting? What Is a Budget?” What Is Budgeting and Why Is It Important? | My Money Coach, www.mymoneycoach.ca/budgeting/what-is-a-budget-planning-forecasting.
I do see that it's important to manage money. And I agree that you would not even fall into dept if managing money was taken very seriously. I do this that the huge amounts of households are in dept, and that is a big issue that has to be addressed. And speaking of addressing issues, keeping eyes out for future obstacles needs to start.
ReplyDeleteManaging finances is very important, as highschoolers starting good money habits now can put us on a good path for the rest of our lives. Credit card companies target college students because they know many are uneducated or unfamiliar with financial management. Staying aware of these things can put you far ahead. It makes sense that America has one of the highest rates of debt. America has a very materialistic culture, which leads to more spending, which means more debt.
ReplyDeleteWithin your last paragraph, I agree with everything that you had said, especially explaining the importance of financing your money. One thing I struggle at is balancing my needs and wants, this being with money. I struggle at putting money aside for future, and I struggle with saving. The points in this article you had wrote are crucial, and I know how important is to obtain good financing skills. I loved the flow of this article, which made it overall very easy for me to read. You had brought up many important key factors as well.
ReplyDeleteI defiantly agree with you on how important it is to know how to manage your money. It is a big issue that Americans deal with especially recently. Being in high school it is good to begin managing your money so that you are well prepared fro when you have to be on our own. I think that your information is really well laid out.
ReplyDeleteWith your last paragraphs I also agree with managing your money. Even for me It's hard to save and I always end up spending. I definitely think that if I manage my money now It could be better for me and my future. :)
ReplyDeleteManaging your money is a very important skill to take up when you are young. I can't believe that the US is one of the top countries with debt. I feel like most of the Gen X and Millennial were not able to gain these skills so I feel that most of them are truly the 78% that are living paycheck to paycheck and unable to pay of credit card debt. In the end managing you money will help you succeed in life without any financial stress, so be smart about it and set goals.
ReplyDeleteI find it interesting that in 1946 the first credit card was issued within America, making us the first country to ever have a card issued, but we remain the country with the highest amount of credit card debt compared to countries like Canada and the UK. Perhaps credit cards. Is it possible the credit cards are not the most beneficial and safest plan in the long run?
ReplyDeleteI completely agree that Americans as a whole have a huge problem with budgeting. Countless Americans fall into debt each year and many private bushiness go out of biliousness because they don't have access money to fall back on when something goes wrong like huge operations have. Many Americans put their wants ahead of their needs and proceed to buy things such as a expensive car or a bigger house and then are not able to make their monthly payments and as a result the credit score deprecates drastically. In high school students should be given a slightly better education on the risks of debt and given information on budgeting along with how to build a credit score for their future. Overall debt and budgeting is a huge problem in America and their isn't a huge solution to this problem currently without a huge cost to the government.
ReplyDeleteI thought it was interesting to see how the US compares to other countries in terms of credit card dept and spending habits. It's true that the culture here encourages a lot of spending and consumerism. Advertisements are always encouraging us to buy more, and if not that, we are encouraged by the people around us. I think that budgeting is something that most Americans need and can help us better manage our money.
ReplyDeleteAgastya Asthana
ReplyDeleteFinancial security is one of fundamental things people should do when they get out of college and enter a job. Many people aren't equipped with ability to manage and spend the money wisely. Investing your money into businesses can yield big paybacks over the course of an year or two. I couldn't agree more with the statistics you have provided for example, from the Atlantic. It would be beneficial if money management could be taught at school which would be more helpful than some of the common core classes.
I agree with the majority of this post. It is extremely important, especially as high school students getting ready to enter a world where we have to manage our own finances it is critical to be able to understand how to manage our money. Things like how to save and invest and how to make the most of the money we receive every 2 weeks or every month. Even just knowing how to ensure financial security or how to spend money wisely. These are all things that everyone needs to know and should implement in our lives and routines.
ReplyDeleteI completely agree with your point that money is what makes the world work the way it does. This just shows how important it is to manage your money well so that you can live comfortably. I think your visual comparing the United States as a whole to other economically successful countries really strengthens your argument. This also surprised me because politics display that the United States is super strong outliers to the rest of the world when, in reality, we have just as much hardships as others. Planning ahead and anticipating future events is important when managing money because emergencies happen out of nowhere. This is a very important topic and your use of visual and comparison is great!
ReplyDeleteI agree that making and managing money helps the world turn. But I feel like you could better narrow down your audience. You talked about why saving money is important, which can be a very broad topic and can lead to a broad audience. If your message is to highschool students you should talk to them which can help improve your argument
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