One thing that seems to bother us more than anything else does is the way the education system is set up. It makes no sense. It just does not. The whole thing is geared toward getting young kids the best job prospects possible so that they are as financially successful as they can be because, as society tells us, money is the center of everything. Now, we’re not denying that. We might not agree with it, but we certainly aren’t denying the freedom and power money provides.
The problem we have is this: being rich isn’t about how much money you make, it is about how you spend your money. That‘s the secret. Just think about it for a second. Who is going to be better off, the person that makes $120,000 a year but spends so frivolously they are living paycheck to paycheck, or the person that makes $60,000 a year but knows how to shop for a bargain and is able to put 20% of what they make into savings?
This brings us to the only question worth asking: why are schools not teaching practical lessons about money management? Wouldn’t that be so much smarter than teaching kids quadratic equations in the hope they will land a top job at a Wall Street powerhouse?
With that in mind, we have pulled together a few of the personal finance lessons we wish we had been taught in school. After all, knowing how to take control of your own financial situation is one of the most empowering things any of us can learn.
1. Making Your Money Last Longer
This is one of those frequently asked questions by people who define financial wealth as how much month is left at the end of your money. If this is you, you will be delighted to know that there are only two options to choose from: either you make more money or you spend less. It’s simple. That is where a budget comes in. After all, no one has ever gone bankrupt by spending less than he or she makes. So, figure out what our outgoings are (rent, utility bills, travel, phone, insurance etc.) and then work out what you have left over.
2. The Lost Of Bartering
Since time began, people have been bartering for better deals. It’s what makes it an art. Even before currencies were dreamed up, people would try to barter a better deal (“I’ll give you three goats for that gold lamp”). Yet this has rather been lost over time, and we don’t know why. There’s nothing wrong with bartering or haggling. It could be haggling for some fresh produce at the end of the day at a Farmers Market, or bartering for a better deal in the months leading up to your cable contract ending, or your cell phone. Bartering will always have a place in the world so long as you are willing to realize this. After all, it is just a matter of margins and testing people’s resilience.
3. Hire Your Way Out Of Confusion
Not everyone knows everything. Some people are better at other stuff than you are. It is why people are able to sell their services and their expertise and, a lot of the time, it makes sense for you to tap into them, especially from a financial standpoint. Let’s say you were in car accident; you are more likely to get a better compensation deal if you hire an expert attorney like Lopez and Humphries than you will if you try and go it alone. Yes, this is partly because the law is complex to navigate for novices, but this advice transcends most examples. You have a business that needs a website; is it better to bumble together a design yourself or hire an expert in design and SEO? Are you better off planning your financial future alone, or would hiring a financial advisor prove beneficial? As we said, confusion can cost you big time.
4. How Much Debt Sucks
Sometimes debt is unavoidable. Student loans, mortgages, and that sort of thing. A lot of the time, however, borrowing money is a slippery slope that can lead to years of stress, distress and regret. Credit cards can spiral out of control and payday loans have horrendously high interest rates attached, and that’s naming just a couple. So, if you can, stay away from taking out a loan. Okay, if you are able to stay on top of payments and you are organized enough to ensure no slip-ups, you’ll be fine. However, if you want to avoid potentially finance-ruining risk, then avoid debt. Period.
5. Shopping Around Is a Savior
We mentioned it in the preamble, how wealth is determined by your buying habits as opposed to your salary, and it’s very true. Shopping around for car insurance is going to save you money compared to just taking the first quote that lands in your inbox. Seeing which banks offer you the best compound interest rates on your savings will see your money work harder for you. Seeing if you can find an online deal for those shoes you liked in the shop you walked past. It all adds up. Really, it does. It is just a matter of spending smarter.
6. Knowing How Crucial Credit Scores Are
How there isn’t an entire class to be had on this we do not know, but there we are. Anyway, having a good credit score is one of those things you want to keep a close eye on at all times – one of those thoughts you want to dance away at the back of your mind – and that’s because a poor credit score can crush dreams down the line. Mortgages, renting a house, business loans, buying a car, leasing a truck, mobile phone contracts and, yeah, even landing your dream job can all be uncertain when a credit score is in the “not ideal” section. What’s more, it can stay on your record for years. As such, you should always make sure you could pay for things, that you are careful about how you spend and what you buy, and that you know how to improve your credit score should it fall away.