Last week, my daughter graduated from college. Unfortunately, they don’t teach kids much about money in school. They learn some things from their parents. Others they learn from their own experience. I thought this was an appropriate “gift” for my daughter: 5 Lessons for Financial Success.
Video: 5 Lessons for Financial Success
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My Daughter and My wife at graduation in 2019 and my daughter at 22 months old in 1997
She graduated with a degree in early elementary education from the University of Cincinnati. And she did so with honors.
5 Lessons for Financial Success
1. Spend Less Than What You Earn
Nobody has ever been able to get ahead if they spend twenty two hundred dollars a month when they only bring home two thousand. This involves hard choices. But those decisions are critically important to your future.
The best way to know you are doing this….KEEP track. Prepare a budget. Know where your money goes, know what is coming in, and use that as your guideline.
2. Make Saving a Priority
Whether it is building an emergency fund, saving for a down payment on a house, or socking money away for retirement. Setting aside money now for later is very important. The future is coming, and you’ll be glad you did.
3. Pay Off Your Credit Cards Every Month
The convenience and ease of using a credit card makes them very appealing. But when you don’t pay it in full, things snowball out of control very quickly. The interest charges for many credit cards is in the double digits. And that adds a lot of extra expense.
4. Get The Free Money
401(k) matching contributions are free money. So are matching contributions to a health savings accounts. Your employers are giving you money if you save some of yours. Ignoring these opportunities will prove to be very costly down the road.
5. Avoid The Predators
This includes pay day loans, check cashing services, the rent to own furniture companies. They all offer what appears to be a fix for a problem. But it comes at an enormous cost.
6. Always Obey Rule #1. Spend Less Than What You Earn
Spend less than what you earn. It just can’t be stated enough.