8 Money Lessons You Must Teach Your Children and Grandchildren
8 Money Lessons You Must Teach Your Children and Grandchildren
If you know and love a young person, pass on these life-changing lessons that can put anyone on the road to prosperity.
Kentin Waits • May 30, 2018
Around the nation, young people are graduating from high school and college and preparing to take charge of their financial lives.
If you listen closely, you can hear wallets groaning from coast to coast.
This is not another rant against millennials and other whippersnappers. Americans of all ages are hopelessly behind the curve when it comes to handling their money responsibly. Unless they have astute parents — or a natural interest in personal finance — young people are at a high risk of making financial mistakes that lead to chronic debt.
Money Talks News is all about providing the financial education lacking in too many schools and families. So, pass on the following 8 lessons to a young person in your life — or read these tips yourself if you’re fortunate enough to be a young adult just starting out on your own.
1. Debt is a form of slavery
In the first quarter of 2018, household debt reached a record $13.21 trillion, according to the Federal Reserve Bank of New York. Household debt is now 18 percent higher than it was in the second quarter of 2013.
Imagine how all that debt might impact the life of the average debtor. What will happen if there is a job loss or an illness that health insurance does not cover? How much stress would you feel in that situation?
Debt, especially unsecured consumer debt, is a form of slavery. The debtor is beholden to the creditor because each day that the debt remains unpaid, interest charges pile up. Over time, it’s easy to see how the unchecked use of credit can erode wealth and foreclose opportunities.
2. Financially successful people live below their means
Financial success is usually the result of years of self-control, and a big part of that discipline involves living within or below your means. If every dollar that comes into your life has to go out, there’s little hope for getting ahead.
Work to keep your overhead lower than your income, pocket the difference and don’t let every bump in income mean a boost in lifestyle.
3. Pay yourself first
Learning to pay yourself first is an important part of financial security. Direct a healthy portion of your income into an IRA, a 401(k) plan or a savings account before your paycheck even hits your account. Otherwise, you’ll have to constantly fight the temptation to spend every dollar.
When you automate your savings and make that an unwavering part of your routine, it puts the twin forces of time and compounding interest on your side.
4. Forget about impressing the Joneses
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