Budgets, Checkbooks, and Credit Cards – Oh My!


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April 15 is Tax Day, the national deadline for filing taxes for 2014. While it is a bit too late to guide Smart Girls through how to approach the income tax forms and working with programs like TurboTax, it’s never too late to get a grip on how to manage your finances and work for that extra cash. Many college and graduate students come into independent living with little to no idea of how they can manage their lives. Credit cards, budgets, balancing a checkbook – many of us have no idea what these terms even mean, let alone how to do it. Fear not, Smart Girls, because here are some breakdowns and how-to’s on important (but fun) adult stuff.

Budgets

Budgets help people keep track of their finances, letting you see how you can manipulate a steady flow of income into manageable portions. It may consist of a number of things, like saving all your pay stubs, bank statements, and receipts. Most budgets help you divide portions of your paycheck into three main categories: living expenses, savings/emergency fund, and spending money. This guide will help you get an idea of what’s necessary for you to break down how to spend and save. Of course, if you’re too busy to sit down and work on a Microsoft Excel spreadsheet, you might find it more useful to use apps like Mint to keep track of your money.

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Image via HR Essentials

Balancing a Checkbook

This is a small component of managing a budget. Some people prefer to do it the old-fashioned way, using a small notebook that comes with your checkbook. However, you can do the same online, using an Excel worksheet. The process of balancing is fairly easy: you write down expenses incurred using checks, a debit card, or ATM withdrawals, and deduct them from what your current account balance is. You also write down any ‘credits’ to your account, when money is deposited into your account, and add them to the balance. Ultimately, you get to compare them to your monthly bank statement, or log into your bank account online to see what your balance is. This helps you catch any errors you might have made, or see if fraudulent charges have been applied to your account.

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Image via The Points Guy

Credit Cards

Whenever these are in the conversation, they’re either amazing for all of your purchase needs, or you’ll hear stories about how they leave you in never-ending debt. The golden rule of credit cards is that you should never spend more than you have. You incur a balance each month, and as long as you pay it off in full, then you don’t have any interest. What’s important for girls looking for their first credit card is to look for something with low interest rates, so in case you can’t pay off a charge on your credit card, you won’t have severe fees. Some possible first cards to look into are the Wells Fargo and Citi ThankYou® Preferred Card for College Students. A good reason to have a credit card is to build a good credit score, which lets you get credit cards with better rewards and in some cases, approval for emergency loans or an apartment.

Overall, it’s really easy to keep track of basic financial skills as an adult. There are definitely some skills that you need to have, but it’s simple and very doable.

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