Monday, February 05, 2018

6 Financial Lessons That Have Stood the Test of Time ♥

By all rights, we should learn how to handle our money when we're still in school - but we don't. Instead, what you know about your finances will stem from how you were raised, what you've discovered through experience, and what you find out through your internet searches. This often means that many people generate money habits that simply aren't ideal.
While there are many great pieces of advice out there about how you should handle your cash to make sure that you're prepared for anything, there are 6 very important financial lessons that have stood the test of time, and continue to be just as crucial today, as they were for the generation that came before us.
  1. Budgeting is Hard but It's Important

How many budgets have you created and then forgotten about over the years? It's probably more than a few. While we all know that we need a budget to keep our spending on track, creating financial restrictions for ourselves and then sticking to them can be a difficult process. You need to be real and practical about your budgeting efforts if you're going to make your strategy stick, so think carefully about exactly how much money you have to spend, and where you need to spend it.
Remember to begin by writing down all the incoming and outgoing expenses you have, then making adjustments to your spending habits based on what you know you can live without.
  1. Save Strategically

While most people know that they shouldn't be spending all their income every month, few people have a real plan set aside for saving. Unfortunately, this can make it much harder to keep track of your spending.
If you want to make sure that you've got some cash left over for an emergency budget, then you're going to need to dive a little deeper into your spending habits and think carefully about what goals you'd like to achieve. Try setting a few deadlines for your financial ambitions in the years or months ahead to guide you.
  1. Understand the Difference Between Want and Need

It's easy to fall off the financial path to success when you're focusing too heavily on the things you want rather than the things you need. However, the truth is that people learn to say that they "need" luxuries from a very young age. For instance, when you were a child, you might have told your parent that you needed a new doll or a new game.
Becoming a responsible adult means learning how to tell the difference between your wants and needs and acting accordingly.
  1. Know How to Borrow Wisely

Ultimately, though it might be tempting to assume that you'll never have to turn to a bank or building society for help during your financial life, the truth is that most of us end up taking on some kind of debt at one point or another. When it comes to being prepared for your financial future, you shouldn't simply write off the concept of loans entirely because you're concerned about things like interest payments.
Remember that all you need to do to keep yourself safe as you move into the world of credit is think about how you're going to borrow wisely. In other words, don't just turn to a loan every time you want to buy something new. Make sure you can afford the credit you're being given.
  1. Material Possessions Don't Equal Wealth

People often assume that just because someone has a large car or an expensive house, they must be rich. However, that's not always the case. There is a myriad of wealth-destroying factors out there, like forgetting to save for retirement and acquiring too much high-interest debt, which can be used to acquire expensive things that make people appear to be rich from the outside. Simply buying more material possessions won't make you wealthy, but preparing for the future could be a good first step to a rich life.
Ultimately, wealth comes from spending less than you make and ensuring you're wise enough to save the difference. Purchasing rapidly depreciating assets doesn't mean much in the grand scheme of things.
  1. Don't Forget About the Future

Finally, when you've got so many different immediate financial worries to think about, like paying for your mortgage or getting rid of your debt, it's easy to overlook long-term concerns like emergency funds and retirement. However, the quicker you start saving the future, the stronger of a position you'll be in when the time comes to tap into your nest egg.
Think carefully about how you're spending every penny, and you'll soon be on your way to financial freedom.
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