It’s never too early to pick up the most important lessons.
Whether you’re teaching children how to manage their money in the future – or looking to get better at your own finances now – financial management is a key skill to learn. No matter what your future (or current) income or expenditure, there are some key lessons about money that we all need to appreciate. So here are some expert tips from the guys at the Solution Loans Personal Finance Blog:
- Making spending choices is tough. It’s always going to be more appealing to spend money on instant gratification and things that are fun or satisfying, such as clothes or holidays. However, sometimes it’s better to put your money aside for the future (read more about that here), as opposed to spending it right now.
- If you don’t budget, you’ll never be able to manage your money. Budgeting involves balancing what’s coming in and what’s going out so that you’re completely aware of where you are with your finances from one month to the next. Without doing this it’s very difficult to balance how much you earn with how much you spend.
- Reaching financial goals requires saving. There’s no easy way around it – unless you win the lottery (which has odds of between 1 in 14 million and 1 in 292 million) then reaching your financial goals is going to be a gradual process of putting money aside every month.
- The most valuable lesson you can learn is to live within your means. If you can keep a roof over your head, food on the table and live a satisfying life on any income then you’ll never suffer financial hardships or need to get into too much debt.
- Any debt requires some serious management. It’s a valuable life lesson to learn that debt can enable you to do much more with your life. From paying for an education for you or someone in your family, to buying a home, debt is a great enabler. However, it’s not something to be taken on lightly. If you’re going to get into debt then the key lesson to appreciate is that it needs to be managed well so that you meet your repayments and don’t have a debt that is unaffordable to you.
- Every little counts. The key equation when it comes to money is that the small things really add up. That could be the small, unnecessary spending that chip away at your savings or the small amounts you put aside that add up to a holiday, deposit for a property or retirement fund. Either way, it’s not just the big financial decisions that matter.
- Having a rainy day fund is always a good idea. Financial safety nets can keep you on the straight and narrow when life throws you a curve ball. From coping with being made redundant, to paying for car repairs, a rainy day fund will give you the resources to stay on track when times get tough.
- It’s totally up to you. Whether you were born with into money, or you started from less than nothing, your financial future is in your hands. There are plenty examples of wealthy people who have ended up with nothing and those born into poverty who have become some of the richest people in the world. It’s possible to change your financial future at any age if you make the right decisions for you.