Spending money over the holidays may not have seemed irresponsible at the time, but looking down at the broken porcelain piggy bank with nothing left to show can be a harsh reality.
This makes it the optimal time to head into this new year with a positive financial mindset.
Frank W. Stearns, certified public accountant and professor of accounting at Riverside Community College, said he believes each individual needs to be fiscally responsible to protect themselves and others. Stearns said financial responsibility is a matter of ethics and integrity.
Stearns encouraged using a budget plan because an individual does not know how much he or she can afford without one. He confirmed that not being educated about budgeting and how much one can spend in comparison with their income can cause debt.
Jenna M. Druce, senior nursing major, said she recognizes that having extra money on the side for emergencies is an important factor in being on a wise budget. She advocated putting money into a savings account and an investment savings account, which helps with future investments such as getting a car, a home, retirement and much more.
Angelina D. Charley, sophomore English major, said people might have trouble with their budget because they do not understand the difference between a want and a need.
“A want is a pleasure to the eye but once you get it, you want something else,” Charley said. “It’s not long-lasting. A need is something you use every day. You have to stop and think about whether or not you need this or want this. Think about the pros and cons of buying the item.”
For example, Charley suggested that instead of going to Starbucks, it would be best to purchase a coffee maker in order to save money. She also recommended using coupons or only shopping when stores have items on sale.
If uncertainty arises in regards to purchases, Druce suggested waiting two weeks in order to determine whether or not it is a need could help someone come to a wise decision.
Charley said she tracks her spending through her receipts and uses her bank’s phone application for her account, while Druce relies on text alerts and the Internet to keep track of her spending.
However, Stearns recommended an old-fashioned attempt at budgeting and tracking finances such as placing money aside in envelopes for necessary needs.
Stearns said he supports having a line of credit, but said, “Do not spend on your credit card more than you can pay off at the end of the month. If you get to a point where you are making minimum payments on a credit card, you are in trouble.”
Stearns added that being fiscally responsible requires discipline but the benefits for the future are lucrative when it comes to retirement and life savings.