Teaching young adults how to budget happens more often outside the classroom and through personal experience. Although most states require personal finance to be integrated into a K-12 curriculum, students are not required to take classes in Economics or Financial literacy. For students who have spent time in a residential treatment center where they did not have the opportunity to manage their own money or work in the community, they often struggle when they step down to a transitional living program and are forced to budget for the first time. In high school, they may have been given money by their parents or earned illegal income that they were less likely to keep track of. Their needs were likely taken care of by someone else and any income that they had went towards their own leisure.
At Foundations, students are taught how to be responsible with their money and to still be able to enjoy fun, healthy activities in a budget-conscious way. Mentors help students with financial literacy by teaching them the basics of money management: budgeting, saving, debt, investing, and giving. Many students work part-time or volunteer in the community and become conscious of their role in society. Mentors help them identify career goals, possible opportunities, and teach job skills. As students are given freedom to spend time in the community, it is important for them to learn the basics of how to budget their money and to save for the future.
Ways to Start Thinking about Budgeting
Keep track of income and spending. Don’t throw away bank statements. Decide whether to auto-pay bills or wait until you receive a statement. Create spreadsheets to compare monthly spending.
Categorize spending. Separate purchases into different categories and create realistic goals for each category. Decide what should be prioritized. While most students do not have to pay household bills, identify what bills you may need to pay every month: credit card bills, phone bills, streaming services, health care costs. Other categories may include food, personal care and entertainment.
Separate want from need. Consider Maslow’s hierarchy of needs. Physiological needs and safety needs should be prioritized. Socializing and finding creative outlets are also needs, but you need a stronger foundation in order to achieve them. Wants can be hard to identify in a consumer society that teaches you experiences are necessary for your personal growth and technology makes your life easier. There can be a balance, if your basic needs are met first.
Save for a rainy day. Or an emergency. Or both.
Identify financial goals and personal goals. Decide what you want to do with your savings. Are you saving up for school, your own apartment, a car? Are you planning for a trip or a special occasion? Do you want to invest your money in stocks or a business in the future? Consider what hobbies are worth investing in. Would a membership to a gym or studio be worth the use you’d get out of it?
Know where to shop. Learn how to thrift shop for clothes. Compare prices in store to prices online. Compare prices at different grocery stores. Sometimes the closest store is not always the most convenient in the long run. Buy off-brand food items. Most of the time, the taste difference is minimal. Sign up for newsletters from local businesses to stay up to date on promotions. Pull out coupons if you have them!
Identify resources in the community. While Foundations mentors help teach job skills, there may be workshops in the community that provide more specific information about budgeting. Local assistance programs may help with paying bills. Many churches and community centers offer community meals, groceries, clothes, and household items without asking for proof of need. Many of our students are enrolled in the local community college and can use their student ID card for many discounts at local businesses. Don’t be afraid to mention it at places, you might be surprised where it applies!
Read travel blogs about your city. Although you might be local, travel bloggers have mastered the art of traveling on a budget without restricting opportunities. Look up free events or activities available nearby. Find recommendations for cheap restaurants. Go to local parks. Explore a new area of your city without entering any businesses for fun.
Know when to ask for help. Talk to mentors and family for additional guidance. They’ve had to learn the same skills before. Talk to other people in the program about what works for them.
Foundations Asheville Can Help
Foundations Asheville is a young adult transition community. The program serves young men and young women ages 18-24, who are looking to acquire the tools to make the transition from adolescence to adulthood. Foundations encourages students to work in the community and helps them learn how to budget and manage their personal finances.