The money lessons we were raised on are wildly different than what our parents grew up with. We have investment apps, financial management apps, and bank statements at the click of our fingers. Money can be made anywhere today and by doing almost anything. I’m pretty sure that yodeling kid in a cowboy hat probably makes more money right now than I do…anyway
I’m a firm believer that good lessons are repeated throughout time because they’re so powerful that it doesn’t matter what technologies arise- a good lesson’s message always holds true and should be passed down and honored.
4 money lessons our parents grew up with that we probably didn’t
1. Money doesn’t grow on trees
LOL. Our parents probably remember their parents saying that statement to them. The reason it has withstood the sands of time is that it’s a fact of life. The first step to creating a lifestyle around this motto is to get a grasp on the difference between wants and needs. Creating discipline around not ‘always’ purchasing your wants will transform your ability to save.
2. Spend less than you make
We live in an era of mass consumerism, making it difficult to get a handle on living below our means. And even worse, so many people who are forced to move out right after college have to put their month’s paycheck right to rent, food, and their student loan. Marketers have done a fantastic job at understanding what drives us to purchase and they make it easy for us to do so. The temptation is there even when we have no money to spare.
I see so many young adults say, “I’ll make more money later, so whatever”. That’s a slippery slope of a motto to live by. You make what you make now, and creating the habit of spending less than you make NOW will transform your ability to live financially free MUCH sooner than if you set your life up based on money you’re not making yet.
If you commit to spending less than you make and paying yourself FIRST (as in putting money into a savings account before ANY other expenses), then you’ll be setting yourself up with life-changing habits.
3. Track what you spend
Wealth isn’t how much you make, but how you spend it. This pulls me back to (last week’s post) and the sheer impact that implementing Mint will have on your personal finances. One of the most intimidating things I’ve ever done is make the commitment to track my expenses.
I wanted to understand where every dollar was going, but I had to push through an intense reluctance I had surrounding checking my expenses regularly. There are plenty of ways to EASILY track expenses with apps like Mint. Why not take advantage of them and get a good understanding of your spending habits? The first step to better personal finances is understanding your personal habits.
4. Cash is king
If you can’t pay it off before interest accrues in 30 days then don’t buy it. It’s as simple as that. Credit cards are great when used as CASH. If you don’t have it then don’t spend it. This ties into spending less than you make and living below your means.
If you can be strict with paying it off every month then the best use of credit cards is to get a card with great rewards, use it for every purchase, and then pay it off before the end of the month. Then you get to use the rewards without the interest.
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You might also like:
How to budget your money and set your life up for financial success: here
Rule number 1 in financial literacy: here
Know your assets: here