Ten Things I Wish My Parents Taught Me about Money

February 20th, 2007 • Related • Filed Under • by admin

When I was a wee child, I never got really any instruction from my parents when it comes to money. They did a great job at raising me, providing for me, and instilling morality and ethics into my being. There’s no such thing as a perfect parent, and we have to realize this. I would have liked to had some further instruction when it comes to money, but that just didn’t happen.

I would get my $5.00 allowance and spend it as I please. When I got my first job at 14, I worked, cashed my check, and spent it as I pleased. I did this just about all the way through my freshmen year of college, and then I had a moment of clarity and realization that what I was doing wasn’t working. I learned and adopted a solid financial plan and have been doing great since. I can only imagine how well I would be off now if my parents had taught me what I know now when I was younger.

Here are ten things I wish my parents taught me about money:

Save money for the future – I didn’t have any expenses at the time that I needed to worry about, but they were be looming. Before I knew it I had college to pay for with a very limited income. A lot of young people such as my self thought that since we had money that we could spend it, this was certainly not the case!

Don’t care what other people think – A lot of people buy fancy cars and expensive clothing just so that people think they are rich, when in reality they are not. Rich people don’t care what you think, and you shouldn’t care what others think. Buy stuff because you’ll get good use of it, not so that other people think you’re rich.

Don’t take financial advice from broke people – I fell for the myth that you need to build your credit score, because people told me to do it, and what did I know? So I went out and picked up a credit card and found my self with $500 in credit card debt without even realizing where it went just a few months after having a credit card! I’m lucky that I realized that credit cards only make the bank rich and enable you to spend money that you don’t have!

Scholarships, Scholarships, Scholarships! – Everyone who is in high-school should apply to at least 25 scholarships in their high-school career. This is some of the easiest money that you’ll ever earn; you just need to apply for them! You don’t have to be the next Einstein or Tessla to get them either, just apply and put effort into your applications!

Follow A Budget Each and Every Month – A budget is nothing more than a plan written on paper of where your money is going to go each month. This helps you make sure you are doing smart things to reach your financial goals. If you just spend money as you please, it all slips away.

Make the most of your money – When I was younger, I had 100% of my income was disposable. I spent it on expensive clothing, fast food every single day for lunch, DVDs, and computers. All of that stuff is gone now, and I really didn’t have anything to show for that period of time in high school. All of my wealth has been accumulated in college and beyond. Focus on the important things, fast food will be gone tomorrow, movies will be boring after a while, and that computer will be worthless in three years. Make your money work for you; don’t let it slip away from you by buying everything you want.

Start Saving For Retirement Now – If I were to put $1000 of my income at my first job at age 15 into a ROTH IRA, it would have 50 years to allow compound interest to do its thing. That $1,000 would be worth $450,000 by the time I finally retired! The earlier that you start putting money away for retirement, the better!

Stay Away from Fast Food – When I was in high-school, I went out to eat every day for lunch. I would go down to the local convenience store, pick up a slice of pizza, a pop, and a candy bar. I’d waste at least $25 a week just for my lunches! I’ve also gained about 50 pounds since then, some of it is natural and healthy, but I could be a lot slimmer than I am now, and the fast food certainly isn’t helping me lose weight!

Make Good Use Of Your Time – When you’re in school, you have more free time than you ever will at any time in your life. Sure you have homework and classes, but those are minimal. You have from 4-10 every weeknight and all weekends with very little to worry about. Why not make use of that time by learning more or picking up a part-time job? It’ll be much better spent than if you were to watch whatever’s on network television each night and make 50 friends on MySpace.

The Jones Family is Broke – We’re always trying to keep up with our friends and neighbors who are just a little bit better off than we are. We think that we need to buy stuff so we can be on their level, but statistically they are broke. They probably paid for that fancy house with an adjustable rate mortgage and bought all that stuff with credit cards. Most people who look rich are far from it.

If you have children, be sure to instill this advice in them. Teach them and instruct them about money so that they can be wise stewards of it. I would easily pay $1000 for the privilege of going back in time a decade ago and being able to teach myself these things about money so that I did not make the mistakes that I did, and It would easily pay off several times over.