Personal Finance By Tauren

Firstly what is debt? Debt is money that an individual or a company can borrow from someone else or another company if they do not have the money at the time. Larger debts usually gain interest overtime and can become a very pricey investment. There can be risks to taking out loans and having debts like not having the money to pay it back when it is due.

People can get overwhelmed with a credit card and just spend their money on things they want but don't actually need. These can bring someone into credit debt because they didn't even have the money to buy all the things they wanted. If someone doesn't have the money to pay back these debts it can turn out very bad for them.

When you take out a loan if you are buying something expensive like a house or a new car, the bank will always look at your income and see if you would be able to pay back the loan and if they don't think you have a stable enough income they will not give you the loan.

Budgeting is the process of making a plan on how and what to spend your money on. Budgeting is important because otherwise people would blow all their money on things they want rather than what they need. The idea of budgeting is to prioritise your money into paying for food, shelter and any other things that are necessary for you

Budgeting is important for teens because it helps to learn all the things other people have been having to pay to support them and raise them. Teenage years are when you go from a kid to an adult and you have to start being more responsible. Teens often get jobs so they can get money to save up for things they want to buy and this is a form of budgeting.

There are many different ways to save and prioritise money. Research taken from thesimpledollar.com (http://www.thesimpledollar.com/little-steps-100-great-tips-for-saving-money-for-those-just-getting-started/) shows over 100 different ways to budget and save money. Some of these include, making home cooked meals, having yard sale for all your old unwanted stuff and turning off lights to save electricity.

Saving money is all about getting your priorities set and getting rid of any unnecessary purchases until you are in a comfortable financial position. This could mean buying used resources for study or work or signing up for rewards cards for whatever you frequently spend money on like groceries.

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