Money Lessons We Wish We Learned Sooner
What is the most difficult money lesson you've ever had to learn? Which is the most potent?
Many people learn these lessons through trial and error.
They are not taught in school. Instead, many people attend the school of hard knocks. It's the "learn as you go" approach to personal finance. And the lessons we learn can influence how we think about and handle money. They can also be with us for the rest of our lives.
So, what are the money lessons that can never be learned too young? Is there anything else you need to learn? Or improve on?
Let us investigate. These important financial lessons aren't usually taught in school, but they're still extremely valuable to learn as early as possible.
1. Accountability is essential.
Financial accountability entails taking responsibility, being honest, and understanding how your decisions affect your financial outcomes. It takes preparation, regular check-ins, consequences, and a willingness to try again when things don't go as planned.
Consider the following: When is the next time I'll check in to see how I'm doing with my financial goals? What will I do if I fail to meet my goal?
"I'm going to find an accountability partner to help me stay on track if I don't meet my next target for my financial goals by XX/XX."
2. First and foremost, pay yourself.
Invest in your savings, retirement, and insurance before you spend any other money. Make them mandatory costs. If you do, you can reorganize your other spending to reflect your financial priorities.
Consider this: What are my financial safety nets like? Is it possible for me to retire when I want to — or to enjoy my retirement the way I want to?
Example: "I'm going to set up automatic monthly transfers to my savings, retirement, and health savings accounts. And I'm going to review those deposits quarterly to see if I need to make any changes."
3. Money Isn't Everything
Wealth provides options, but money alone will not fulfill us. When it comes to our long-term happiness, time, relationships, and our well-being can be far more important than money. 3-5. Consider the following: When and why do I put money ahead of my relationships or my health? What can I do to change this?
"To achieve a better work-life balance, I will refrain from checking work emails after a certain time each day, and I will commit to getting X hours of sleep every night."
4. It's Critical to Understand Your Money Mindset
A money mindset is a set of beliefs and attitudes about money that shape financial behavior unconsciously. Knowing your money mindset can help you improve it and make better financial decisions. 6 Consider the following: Do I feel more anxious or optimistic about my financial future? Do I procrastinate or focus on solutions when I have a financial problem?
"When I begin to feel stressed about a financial decision or issue, I take a step back and wait until I'm more relaxed before addressing it."
5. Don't Be Afraid of Your Money
You don't have to be a personal finance expert to make wise financial decisions. A solid strategy, commitment, and a willingness to learn can all contribute significantly to financial success.
Consider this: What aspects of personal finance perplex or overwhelm you? What do you think I should know more about: taxes, retirement, interest rates, or inflation?
"I'd like to learn more about tax planning or retirement planning, so I'm going to take a class or consult with a professional," for example.
How Money Lessons Aid Our Understanding of Life
Were any of these lessons unfamiliar to you? Have you heard all of them?
Learning these money lessons, whether familiar or foreign, is not like memorizing a simple fact. It is not a one-time event.
It's more like honing a skill for life.
To make life's important financial lessons work for us, we must put them into practice.
And the lessons we need to learn the most can change at any time in our lives.
Even those of us who are pretty good with money need to revisit the fundamentals of finance from time to time. Why?
Because new situations and challenges that put us to the test can arise at any time.
After all, things in life and finance can change quickly.
As a result, we may find ourselves confronted with unexpectedly complex financial decisions.
If or when this occurs, you won't have to learn your next critical financial lesson the hard way. And you don't have to make a hasty decision or stand alone at a crossroads. Sincerely,
Paavan Kotini, CEO & Principal Advisor
Kotini & Kotini