The Dos and Don'ts of Managing Your Money

Here are some tips you can put to use right now—no matter how much (or how little) you've got in the bank.

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No. 1: Don't: Try to Impress Your Friends

Sure, you want to keep your friends close, but spending money on them is not the way to win their affection (and if they think it is, it may be time for a BFF breakup). "One of the biggest mistakes you can make is overextending yourself," says Tonya Rapley, creator of the financial education and lifestyle site, My Fab Finance. "We like to treat our friends, but if you don't have the money to do it, it will put you in a financial constraint." Instead of buying everyone dinner, throw a potluck at your place, or find a creative way to exchange gifts—White Elephant, anyone?

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No. 2: Do: Use Your Phone

Consider using apps that will help you along the way, because, as we all know, money can be a hard thing to keep track of on your own.

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Mint (free): Mint, the app that helps you stay on top of your bills and keep track of your credit score, "has made significant improvements [in user experience]," according to Rapley, who recommends it.

The Finance Bar: Expense Bar (free): "For understanding your percentages, you can plug in your income and it tells you, based on that information, how much you should be spending on each item," Rapley says.

You Need a Budget (free): "Need a Budget is also great," Rapley says, because it helps you build and maintain a healthy budget, no matter how low or high your income is.

No. 3: Don't: Bet Your Life on Student Loans

With the rapid rise of tuition costs, student loans are the norm for millions of college students across the globe. So if you find yourself in debt, don't feel alone! But don't rely on that refund check every semester. "Student loans aren't free money," Rapley says. "Graduation might seem far off, but loans can add up quickly. Try to borrow the minimum, and act as if you have to pay them back immediately." Follow that advice and you can develop a habit of saving money, and start building a cushion that will help you stick to your payment schedule once you're out of school.

No. 4: Do: Save for College

Saving for tuition is tough, so consider starting to save by simply setting a little aside for your college experience. "The summer before you start college is the perfect time to begin saving for college expenses, so you don't always have to call home and ask for support," Rapley says. "The experience is bigger than just tuition and books—there are games and extra-curriculars that you're going to want to set aside money for to avoid credit card debt." So keep that summer job, and give yourself a savings goal with each incoming check.

No. 5: Don't: Forget About a Budget

Whether you're paying for everything or receiving some support, a budget should be tailored to your individual experience. There are a couple of important factors to consider when creating monthly goals. "In setting up a budget, pay for what you're responsible for first, such as rent and bills, and then factor in the things you like to do," Rapley says. "Eating out isn't necessarily a budget line item, but if it's something you enjoy doing, it should be included. Same goes for shopping." When you graduate and get a job, base your spendings and savings off of the size of your paycheck, after taxes.

Here are three things Rapley says you should focus on when creating a solid budget:

No. 1: "Pay for your responsibilities and necessities first."

No. 2: "Don't spend more than you actually have or heavily use credit cards."

No. 3: "Save a little bit in a savings account."

No. 6: Do: Save, Save, Save!

Your parents are right: you need to save up. But we know it's not that easy. Rapley gives advice on how to make your #savinggoals less of a hassle. "Make it automatic, and get into the habit of [regularly] saving something—even if it's just 1 or 5 percent of your income—as anything matters and counts," Rapley says. "Make your savings account less available, so you can't take out money easily, and separate it from your primary bank account—you just need a simple online account that you can transfer money into and forget about."

Last, but not least, save for the things you want! "You should [identify] different goals. You need an emergency savings, but that shouldn't include your travel experiences or your Beyoncé ticket fund. Your different priorities should be put into different buckets."

No.7: Don't: Be Reckless With Your Credit Cards

You can legally get a credit card once you turn 18, and before you send off the application, think about the responsibility you're about to take on. "There is a perfect mindset and position for getting a credit card," Rapley says. "Understand that it isn't extra spending money, and that it should only be used in emergencies and to help build credit." In order to use credit, though, you still need to have money. "You shouldn't get a card if you don't have a way to pay it back, which means if you don't have monthly income or support, then you shouldn't go after a card."

Want more info on money issues? Visit Rapley's website, for advice, workshops, and tip sheets.

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