We’ve learned many things at school, but the one thing it doesn’t teach us is how to handle our money. As children, we probably picked up some tips from watching what our parents did with theirs – emulate them if you want more success in life! However, there are many procedures and concepts that we should have been taught but weren’t. So here is a guide to the things you really need to know about your money to be financially secure – lessons your school didn’t teach you!
1. Spending less than you earn
It sounds obvious, but this is a basic lesson that most people don’t master in their lives. It’s a harsh truth to learn – you can have all the money in the world, but if you spend it as fast as it comes in, then what good will that do? If all your money goes out and there isn’t any leftover when your bills come round, how are you going to survive? The best way to fix this problem is obviously to spend less than you earn. The issue here is that the longer you do it, the harder it gets – bills accumulate, and life becomes more expensive. It’s important not to fall into this trap!
2. Emotion and money
We’re not just talking about the obvious things here, like people feeling bad when they owe somebody money (because, let’s face it – nobody likes to be in debt), but also how we make decisions about our money.
Remember that time you wanted something really badly and broke down and bought it? Then you didn’t use it for six months because you forgot you even had it! Or that other thing that you got on a whim and then lost interest in after a week because the latest fad came along? Exactly. Your emotions play an integral role in your financial well-being, and if you want to succeed with money, then you need to keep your feelings out of your bank account.
Saving money doesn’t come naturally to most people, but it’s the best financial habit you can have. Even if you start small with a jar or piggy bank, make sure that some of your earnings are saved every week. Then one day you might be able to afford something really special! Or even better – save up for when things go wrong, and you need funds to tide you over.
A personal finance speaker can help you stop wasting your income and learn to manage it more effectively. This way, you can really benefit from what you earn, rather than just watching it disappear into the abyss of everyday life!
4. Getting out of debt
If there’s anything worse than owing somebody else money (apart from having something you don’t want), it’s the feeling of not knowing when all those repayments will end. It can become like another job and suck away all your spare time, energy, and happiness in life. So, the best thing to do is get rid of it as fast as possible.
The first step is identifying what you owe and who to – this can be done with your credit card statements or by asking your bank for a list of creditors (if you’re in debt to several different ones). Then work out how much money you can afford to pay off each month and divide it between them until they’re all gone. It might take you longer than expected, but at least when that final payment has been made, then you’ll know that it’s over. There isn’t anything standing in between you and your financial freedom anymore!
5. Strategic spending
This is where most people go wrong with their money. Having money is great, but you can’t tell how long it will last if you spend as soon as it enters your wallet! For example, you might have a big pay rise and be able to afford more things or go out more often/buy yourself something nice…but what happens when the next month comes around? You’ll probably end up back at square one (if not worse off) because having lots of loose income only encourages you to spend it all.
It’s easy to see how the things that you learn at school about money don’t really apply in adulthood. The things that are important for your success in life are the little lessons you learn on a day-to-day basis. So take some time to think about anything you’ve learned recently which has helped you deal with money – it might be something simple. Still, if everybody did it, then perhaps we’d all have more money!