As a young person, learning how to manage your finances and budget properly can sometimes be difficult. Unfortunately, these skills are taught briefly, if at all, in school which leaves a lot of young people clueless about good financial practices. If you are looking to save more and make the most of what you are earning, here are some of the best financial tips for young people to utilize.

Create a realistic budget

One of the best ways to save money and practice good spending habits is to create a budget that is realistic for your income and lifestyle. You want to balance being comfortable and enjoying yourself with saving and paying off any loans or debt. If you have more specific financial goals, like wanting to buy a house, then your budget will look different than someone who just wants to build an emergency fund.

To make a budget you first need to figure out what your monthly income is after taxes. Then you first need to account for all of the expenses you have to pay each month. These are necessities such as rent, mortgage, utilities, car insurance, and more. This is simply because they are usually fixed amounts, so just add up all of the payments that you cannot skip each month. You should also account for groceries, which can be adjusted if you need to save a little more.

Now you are left to decide how much you want to put towards your savings. If you have any debt or loans you are trying to pay off this should also be determined at this point. If you are trying to prioritize paying off what you owe, you may want to put more of your budget aside for this each month until it is paid off. Once you have decided how much to put towards both of these you are left with spending money. This is for anything extra you want to buy each month like entertainment, eating out, and anything else that is not a necessity. Budgeting helps you keep your spending organized and on track to reach your goals.

Spend cash, not credit

Using cash can help you practice self-control when it comes to spending money. Charging purchases to your credit card makes buying things super easy, but it can also quickly lead to overspending and if you don’t keep track you can easily find yourself in debt. Instead, try using cash only, or a debit card connected to a bank account that you can check easily. This way you are a lot less tempted to spend money that you don’t have.

Of course, building credit is very important, so using credit cards responsibly is a good idea especially when you are young. Using credit cards for specific purchases only can help you avoid overcharging it or forgetting to pay and acquiring late fees which will actually damage your credit score. Try only using credit cards for purchases like groceries or gas and using your debit card or cash for everything else. You just need to make sure that you can pay the balance at the end of each month.

Pay yourself first

An emergency fund is very important to ensure that you are never stuck without the funds to pay for something that has come up unexpectedly. We cannot always predict when our car is going to break down or we have to pay an unexpected medical bill, but when you have a sufficient amount saved in an emergency fund or invested as a teen you won’t have to worry. This will protect you from financial trouble in the long run, because you won’t be forced to put these emergency expenses on a credit card or ask to borrow from someone.

Paying yourself first is a common phrase used when discussing good financial practices, and it basically means prioritizing your savings. So at the beginning of the month, or right when you get each paycheck it is important to set a percentage of that money aside in a savings account. This makes building your emergency fund and savings, in general, a lot easier. Usually, 10 to 20 percent of your paycheck is a good rule of thumb, but this varies depending on each individual’s situation.

Roni Davis is a writer, blogger, and legal assistant operating out of the greater Philadelphia area writing for a Fractional CMO company.