Budgeting is a complicated concept that causes people to think that they need to restrict themselves from spending money, but planning a budget should be liberating.

Present-day teenagers should learn how to allocate costs as they have a myriad of expenses ahead of them. College is like a money vacuum that sucks in all of their life savings. However, teenagers also find it essential to have fun, which can be expensive. Responsibility and maturity is a hard concept for many teens to grasp as they are transitioning from high school to college.

It is extremely beneficial for teens to invest time in plotting out a budget as it teaches them to be responsible and contemplate the choices that they are making.

The first thing that comes to a person’s mind when coming up with a financial plan is tying up their funds and thinking that having fun isn’t an option. However, keeping track of one’s expenditures can be empowering and even enjoyable when executed in the correct way.

Through the process of arranging personal income, the first step is to have the right frame of mind. Individuals should only say and decide to do something if they truly want to. If someone doesn’t have the desire to make a budget, then they won’t ever commit to following it. Going through the motions of doing this may cause more harm than fortune.

A tip for starting a budget is to have at least $1000 in a savings account for emergencies, harness those anxieties and fears into motivation. Most people have experienced a time in their life where an extra dollar was a luxury.

The second step, after digging up the inspiration to account for one’s finances is to come up with a game plan.

The 50-30-20 method is proven to be simple and effective in saving money. Senator Elizabeth Warren helped develop this method as a professor at Harvard University. The sizable portion, 50 percent, of income should be used towards necessities including groceries and utilities. The next segment, 30 percent, can be used for entertainment and discretionary expenses, and the last 20 percent of income for savings and possibly a rainy day.

This method allows amateur budgeters to have what they need, buy what they want and have money in the bank. However, everyone should save at least 10 percent of their income for their long-term goals.

Lastly, people should change their attitude toward money. In life, economics plays an essential role in what choices people make when it comes to buying things. People have unlimited wants, but they have limited resources. Let the scarcity of cash affect the decisions that will be made; there isn’t an unlimited amount of money.

Credit cards and overdrafts can be detrimental to one’s finances. People are tricked into thinking that money just grows on trees and that constantly swiping a piece of plastic is harmless. When money is out, it’s out.

A proper mindset is fundamental in achieving goals that lead to success; something that many people fail to realize. All it takes is a little bit of determination.