37 Trillion Reasons To Have A Plan B

37 Trillion Reasons To Have A Plan B

Notes From the Field By James Hickman (Simon Black)  August 11, 2025

On Friday afternoon last week, the US national debt hit another ignominious milestone: $37 trillion. And there’s absolutely no end in sight.

 Perhaps the wildest part is how quickly the debt is rising. Just before the One Big Beautiful Bill was passed on July 4th-- barely a month ago-- the national debt was ‘only’ $36.2 trillion. So, the debt increased a whopping $800 billion in a mere 36 days.

To be fair, about $300 billion worth of that amount was ‘pent up’ debt that couldn’t be reflected on the national balance sheet until they increased the debt ceiling last month.

 But there’s still roughly half a trillion dollars in fresh spending that went out the door over a five-week period. That is an insane pace of outflows.

 The other big problem, of course, is that the debt is becoming a lot more expensive-- in other words, the average rate of interest that the US government pays on the national debt is steadily rising.

 As of July 31st, 2025, Uncle Sam is paying an average 3.352% on the entire national debt.

 That sounds pretty low… until you look back a couple of years and see the average interest rate was just 1.5% in early 2022.

 This means that interest rates have doubled in just 2 1/2 years. Combined with the rapid increase in the national debt, America’s annual interest bill is quickly spiraling out of control.

Back in Fiscal Year 2021, the US government spent around 13% of its tax revenue to pay interest on the debt.  This Fiscal year 2025, it will take around 22% of tax revenue to pay interest on the national debt.

That’s an extraordinary increase in just four years. And it’s quite likely this trend will continue, i.e. interest will eat up a larger and larger portion of the annual budget.

 Why? Because the debt keeps rising… plus interest rates are MUCH higher than they were a few years ago.

 Think about it: over the next twelve months alone, nearly $9 trillion of US government debt will mature; that’s nearly 25% of the entire US national debt maturing over the next YEAR.

 Obviously, the government doesn’t have $9 trillion lying around to repay this debt. So instead, they’ll simply issue new debt (i.e. government bonds) to repay the old debt.

The key problem is that the new bonds they’ll have to issue will carry a significantly higher interest rate than the old bonds from a few years ago. And this will continue to push up the government’s average interest rate.

 Our analysis-- with a lot of help from Grok-- is that it will take more than 40% of tax revenue, just to pay interest, by the year 2033 (which happens to be the same year that Social Security’s major trust funds are set to run out of money).

So, it’s not hard to see why the White House is so adamant about bringing interest rates down… and why the President is pushing the Fed Chairman to cut rates.

 The President may very well get his way. Last week, a key Fed official who was a member of their interest rate committee (called the FOMC) suddenly and inexplicably resigned. She literally quit with no explanation and with almost immediate effect.

 The White House responded quickly by appointing none other than Stephen Miran to fill the post; Miran, as you are probably aware, is one of the key architects behind Trump’s entire economic agenda-- everything from the tariff bonanza to the so-called “Mar-a-Lago Accords”.

Not to mention, Miran has publicly called for a weak dollar… which is clear conflict given that one of the Federal Reserve’s key mandates is to maintain a stable currency.

 I imagine it will be pretty hard for Miran to maintain a stable currency when he’s working so hard (and successfully) to weaken it.

 Point is, Miran will almost certainly be a strong advocate on the Fed to dramatically lower interest rates-- and to ‘print’ money-- in order to weaken the dollar and bail out the Treasury Department.

 The White House will also appoint a new Fed Chairman next year once Jerome Powell’s term expires in the spring.

 It’s not a sure thing, but the Trump administration is clearly doing everything it can to take control of the Fed and steer US monetary policy towards lower rates.

 If they’re successful and manage to hijack the Fed, the end result will likely be a new round of Quantitative Easing (i.e. ‘printing money’), leading to a nasty bout of inflation.

But if they’re not successful, the government’s annual interest bill will probably continue to spiral out of control, eventually leading to… a nasty bout of inflation.

This isn’t exactly controversial; in fact, throughout human history, inflation has almost always been the consequence of governments’ financial mismanagement.

 The good news is that America has been in this position before. As recently as the 1990s, the US government was spending well more than 20% of tax revenue just to pay interest on the national debt.

 Congress and the White House both acknowledged the problem, and they worked together to address it-- primarily by reigning in spending.

Could the same thing happen over the next decade? Of course. But at the moment there seems to be zero appetite for cooperation… or to restrain spending.

 So, again, the current trajectory almost certainly leads to inflation.

 Now, this doesn’t mean the world is coming to an end. Civilization as we know it is not on the brink of collapse. Future inflation is a very solvable problem. But it requires taking sensible, proactive precautions now… all part of a rational Plan B.

 James Hickman  Co-Founder, Schiff Sovereign LLC   To your freedom, 

https://www.schiffsovereign.com/trends/37-trillion-reasons-to-have-a-plan-b-153287/?inf_contact_key=9dcaeade37b81f827c7e8647bd613d74595bc1afdf8fc89706dc8022d918b6bd

3 Biggest Mistakes You Can Make as an Investor

Suze Orman: These Are the 3 Biggest Mistakes You Can Make as an Investor

Peter Burns  Fri, August 8, 2025    GOBankingRates

Most people know this investing advice: Buy low, sell high. And while that sounds simple, it’s actually very difficult to do. Many invest with the best intentions, hoping their money will make money without them lifting a finger. However, many end up losing money instead.

Personal finance expert and New York Times bestselling author, Suze Orman addressed the challenges of being an investor on her podcast. In an episode called “Suze School: The Biggest Mistakes You Make as an Investor,” Orman shared some advice to help you get your investments in order.

Giving In to Fear

Investing can be scary, especially if you’re putting a lot of money into a stock.

Consider this: Maybe you do research and find an outstanding stock. You consider buying some shares, but because of the risk, you decide not to invest. A short time later, the stock takes off just as you’d predicted, and you’re left kicking yourself because you missed your chance.

Orman says the biggest investing mistake you can make is making decisions based on fear. During her time as a stockbroker, she found that her clients fit into two categories: those that invest and hold no matter what happens, and others that invest and sell at the slightest dip in price.

Investors who give in to fear suffer from what’s known as myopic loss aversion (MLA). MLA is also known as an investor’s tendency to focus more on the short-term outcomes of a stock rather than the long-term benefit. As Orman observed, MLA often leads to selling investments too soon and losing out on potential profits.

DALBAR’s Quantitative Analysis of Investor Behavior (QAIB) found that investors with $100,000 who bought and held S&P 500 throughout 2023 would earn $26,288 and have a total of $126,288 at the year’s end.

But to do this, investors must hold their investment through multiple dips. Orman found that her clients who held the stocks because they were confident in their selections made much more money on average than those who sold due to fear.

One way to avoid giving in to fear is by reframing risk. Try viewing risk as a potentially rewarding part of your journey instead of a potential loss. Recognizing and transforming your fear can help you hold your investments and gain more profits in the long run.

Focusing on What You Had

TO READ MORE: https://finance.yahoo.com/news/suze-orman-3-biggest-mistakes-130019892.html

Foreigners Own Less US Government Debt—Is That a Good Thing? [Podcast]

Foreigners Own Less US Government Debt—Is That a Good Thing? [Podcast]

Notes From the Field By James Hickman (Simon black)  July 23, 2025

The US owes a LOT less money to China today than it did a few years ago. As recently as three years ago, for example, China held $1.3 trillion worth of US government bonds. Today they’re down to around $750 billion.

In other words, China’s government has decided to cut back on its US dollar Treasury holdings by more than 40% over the past three years.

And at first, that might sound like a good thing— HOORAY! More independence from foreign creditors! America is better off without that Chinese money! Right?

But in reality this is a huge problem. Because it’s not just China.

• Going back to the years before Covid, roughly a third of US debt was owned by foreigner governments and foreign central banks.

• But then federal debt skyrocketed during the pandemic, and US government credibility plummeted. Even the government’s credit rating has been slashed.

• As a result, foreigners across the board began stepping back from Treasury securities.

• Today foreign ownership of US debt is less than 25%, and falling. This is a significant drop in just a few years.

Why it matters:

The US Treasury relies heavily on foreign capital to fund the federal government’s gargantuan (~$2 trillion) deficits. So if foreigners’ appetite to buy US government debt is waning— at a time when federal deficits are exploding higher— where will the Treasury Department come up with the money?

There are essentially two answers. Either (1) the Federal Reserve will “print” the money, or (2) domestic investors within the US economy will buy government bonds and fund the deficit.

But both of those options come at a significant cost.

Consequences of the Fed funding US government deficits:

• In order for the Federal Reserve to buy US government bonds (and essentially fund the government’s annual budget deficit), the Fed must first expand the money supply.

• We often refer to this as “printing money” even though it all happens electronically. The Fed calls it “quantitative easing”, or QE, but it’s all the same thing.

• The consequence of QE is inflation. Serious, serious inflation.

• Think about it— during the pandemic, the Fed’s QE created roughly $5 trillion in new money... resulting in 9% inflation.

• Creating enough money to fund federal budget deficits over the next decade could result in the Fed having to print $15+ trillion. So most likely that’s going to be a LOT of inflation.

Consequences of the US economy funding government deficits:

• American investors, i.e. banks, funds, corporate treasury departments, etc. could also buy more US government bonds in order to offset waning foreign demand.

• But this capital comes at a big opportunity cost

• Any private capital that goes in to the Treasury market means less money available to buy stocks, fund venture capital, or finance real estate mortgages

• The net result is lower stock prices, higher mortgage rates, and slower innovation.

Why China is first to ditch US government bonds:

After sanctions on Russia, which included freezing their Treasury holdings, other countries got spooked — especially China.

• China probably fears becoming the next target of US financial weaponization.

• This may also be an indication that they will eventually invade Taiwan

• So China is hedging: they’re selling their US government bonds and buying literal metric tons of physical gold— driving gold prices to record highs.

The bottom line:

The shrinking foreign appetite for US debt is a glaring red flag. It signals waning confidence in US fiscal credibility and could lead to a capital squeeze at home — or nasty inflation spiral if the Fed fills the gap.

Many Americans might cheer the idea of being less reliant on Chinese or other foreign money. But in reality, foreign investment in government debt is the closest thing to a ‘free lunch’ in economics.

It means that foreigners are financing federal deficits, meaning less inflation at home, and allowing private capital to invest directly in the US economy.

Losing this benefit is a bad thing for America.

You can listen to my full thoughts on the matter in this brief Podcast.

For the audio-only version, check out our online post here.

Finally, you can find the podcast transcript for your convenience, here.

To your freedom,  James Hickman   Co-Founder, Schiff Sovereign LLC

https://www.schiffsovereign.com/podcast/foreigners-own-less-us-government-debt-is-that-a-good-thing-podcast-153214/?inf_contact_key=2a6ba1599a555917052563664b72615eb218dc52b043bf6dfa73846fd56e3920

It’s Not Glamorous, but This Is How Most Americans Actually Become Millionaires

It’s Not Glamorous, but This Is How Most Americans Actually Become Millionaires

John Csiszar  Sat, August 9, 2025  GOBankingRates

You may be surprised to find out that about 18% of Americans are millionaires, translating to roughly 25 million individuals, according to a report by Wealth Management USA. And while there are plenty of ways to accumulate a seven-digit net worth, some avenues are more common than others.

Many millionaires start their own business or invest in real estate to earn their riches, while others imply inherit the money. But the number one way that Americans become millionaires is actually within reach of average workers, provided they start early and stick to their plan.

Here’s the “boring” path to riches that doesn’t involve starting a business, investing in real estate or inheriting the money.

Consistent Investing

Want the “easy” way to a million dollars? Continually invest on a regular basis.

According to a report from Morningstar, investors who have $1 million or more in their Fidelity 401(k) accounts consistently invest, typically every two weeks or every month. They don’t trade in and out of aggressive investments, like leveraged ETFs, but instead simply sock away their money on a regular basis into their “boring” investments.

What’s the Secret?

There are a number of reasons why consistent investing is the “easy” path to $1 million. First, regularly adding money to your investments regardless of the market environment ensures that you’ll get an average price. You’ll be buying more stock when prices are low and less when prices are high. You won’t be putting all your money in either at the absolute bottom or at the peak — but since the long-term trend of the market is up, getting that “average” price provides a significant return.

Second, by consistently investing in “boring” options like mutual funds, 401(k) funds or high-quality stocks, you won’t be taking on excess risk. With automated contributions coming out of your paycheck or bank account, you won’t get tempted to chase the latest investment fad, a mistake that costs many novice investors their entire bankroll.

As preservation of capital is half the battle when it comes to building wealth, automatically contributing to relatively “boring” investments can help protect your bankroll over the long run.

The third reason why consistent investing works is a simple one. If you continually add money to your account, you’ll have more money in it.

TO READ MORE:  https://www.yahoo.com/finance/news/no-1-way-americans-become-150405344.html

How To Prevent a Rocky Economy From Derailing Your Financial Goals

How To Prevent a Rocky Economy From Derailing Your Financial Goals

Cindy Lamothe  Wed, August 6, 2025  GOBankingRates

When the economy starts acting up — think rising prices, stock market swings or constant chatter about a possible recession — it’s totally normal to feel anxious.

One survey by Equitable Holdings revealed that only 42% of Americans feel prepared to navigate shifting financial challenges, including potentially higher costs from tariffs, market volatility and lingering recession concerns. When those challenges hit, suddenly, the financial goals you’ve been working toward can feel like they’re slipping out of reach.

But here’s the truth: A rocky economy doesn’t have to derail your progress. With a few grounded strategies and a little flexibility, you can keep moving forward — even when the economic forecast looks a little stormy.

Rethink Inflexible Goals

According to Kevin Huffman, finance specialist, owner and senior contributor at Kriminil Trading, Americans need to focus on flexibility as much as ambition

“The trick is to create a financial plan resilient enough to bend without breaking,” he said.

To get there, he suggested starting by rethinking inflexible goals into more flexible targets like working toward a certain savings threshold by a particular year rather than dwelling on a retirement age. Then, section those goals out in 90-day checkpoints to make course corrections for the unexpected without interrupting your momentum.

Automate Your Good Habits

TO READ MORE:  https://www.yahoo.com/finance/news/prevent-rocky-economy-derailing-financial-102838605.html

13 Ways To Save Money Right Now, According to George Kamel

13 Ways To Save Money Right Now, According to George Kamel

Ashley Donohoe  Thu, August 7, 2025  GOBankingRates

A May 2025 McKinsey & Company survey found that inflation and tariffs topped the list of concerns for Americans, with 32% of respondents having changed their spending and another 31% planning to.

Whether you need to save money out of necessity or just want to progress more quickly toward a goal, you can do so without giving up the essentials or living an extremely frugal life.

In a recent YouTube video, money expert George Kamel discussed many creative and simple ways to cut costs. Think about which of these strategies might work for you.

Find a Roommate

While you could move to a cheaper place, finding a roommate is an easier cost-saving option. Between splitting the rent and utilities, you could save several thousand dollars each year, with the catch being that you give up some privacy.

Kamel suggested carefully vetting your potential roommate to find a responsible match.

Get Rid of Private Mortgage Insurance

If you bought your house with a conventional mortgage with a low down payment and now have at least 20% equity, you can contact your lender to see if you can stop paying for private mortgage insurance (PMI).

Fannie Mae noted that the typical cost is around 0.58% to 1.86% of your loan amount each year, so you could see significant savings in your mortgage payment.

Bundle Your Utilities

Kamel suggested bundling services through one provider for potential savings. For example, major cable TV companies like Xfinity and Spectrum offer internet, home phone and cellular services in packages. It’s also worth shopping around with a competitor if you already have a bundle that has become more expensive after your promo period expired.

Set Up Automatic Payments

Not only does using autopay help you avoid the costs of late payments, but your provider might even offer a small discount. You’ll often find this perk available for insurance premiums, utility bills and certain loan payments. Just make sure to have the funds available when the payment is due.

Be More Energy-Efficient

TO READ MORE:  https://www.yahoo.com/lifestyle/articles/13-ways-save-money-now-143834993.html

Travel Experts: Don’t Keep Your Money in These 6 Places While Traveling

Travel Experts: Don’t Keep Your Money in These 6 Places While Traveling

Caitlyn Moorhead    Mon, August 4, 2025  GOBankingRates

Though paper money has gone the way of the dodo in many respects, sometimes when you travel you just want some cold hard cash at hand to make life easier. While many people don’t carry cash at all, others have go-to methods of storing their money.

Whether you’re a frequent or casual traveler, it’s important to know where to keep your money so that it doesn’t get lost or stolen while you’re on your trip. Here are six places you should never keep your cash when traveling.

Outer Pockets of Backpacks or Luggage

You should be aware that when it comes to specific areas of storage on your bag or luggage, some are safer than others. For example, the back or outer pockets of your backpacks or luggage compartments are not the best place to keep your money while traveling. Not only do these places lack security, but they’re also easily accessible to pickpockets.

Unattended Hotel Room

Your hotel room might not be as secure as you think. Even if it’s highly rated and in a safe area, you still shouldn’t leave your money out in the open in your room. For instance, try not to leave your card on the side table of your hotel room when you go sightseeing or out for the day. You never want to leave your information or money vulnerable to being easily stolen.

Alternatively, if you want to leave something in your room, opt for hotel room safes, as they are the best go-to choice for locking away passports, cash and valuables. One of the best investments you can make when traveling is in your peace of mind.

In One Place

Unfortunately, savvy thieves know how to spot tourists who can become targets if they know they have money and are ready to use any opportunity to steal it. Be careful when travelling abroad and try to distribute your money across several locations rather than keeping it all in one place.

TO READ MORE:  https://www.yahoo.com/shopping/style/clothing/article/build-the-ultimate-summer-to-fall-wardrobe-with-our-favorite-under-50-staples-213028728.html

This Money Expert Says ‘Savers Are Losers’ — Is He Right? Experts Weigh In

This Money Expert Says ‘Savers Are Losers’ — Is He Right? Experts Weigh In

Dawn Allcot  Tue, August 5, 2025  GOBankingRates

Robert Kiyosaki, finance expert and “Rich Dad, Poor Dad” author, has been known for straight talk about the economy. In a recent tweet, he said, “Savers are losers.”

He pointed out that the U.S. Federal Reserve’s way to avoid economic disaster is to print more money. He listed the 1987 market crash, the 1998 long-term capital management (LTCM) crash, the 2019 repo market seizure, the COVID-19 pandemic and the Silicon Valley Bank failure as examples.

 “It’s not a new crisis….it’s the same crisis getting bigger,” he wrote. Then, he warned, “Stop saving FAKE $. Start saving real gold, silver, Bitcoin. Protect your wealth. America is the biggest debtor nation in history… because of the FED. The Biggest Crash in history is coming….soon.”

Is Kiyosaki Right?

By most economic markers, experts said we are not heading for a recession this year. “As of now, the slight jump in inflation may be tied to tariffs, but there’s nothing in the data suggesting an imminent recession,” said Stephan Shipe, Ph.D., CFA, CFP, a finance professor at Wake Forest University and founder of Scholar Financial Advising.

Even so, inflation causes problems with saving, rather than investing. If your money in the bank is growing only at the national average of 0.38%, according to Federal Deposit Insurance Corporation statistics, but inflation is 2.7%, according to U.S. Bureau of Labor Statistics, you’re losing money. A better choice would be a high-yield savings account delivering returns of around 3%, but even then, you’re just barely keeping pace with inflation.

“Given the government’s massive money printing today and foreseeable future, the fiat currencies are devalued consistently through time. The U.S. dollar’s purchasing power is cut by half every 15 to 20 years,” explained CK Zheng, co-founder and chief information officer of ZX Squared Capital.

Technically, savers are losers in that they could end up losing purchasing power over time due to inflation. But even so, finance experts like Suze Orman and Dave Ramsey recommend some funds in an easily accessible, liquid savings account for small emergencies like car or home appliance repairs. “The truth of the matter is 75% of the people in the United States do not have at least $400 in savings for an emergency,” according to Orman in a recent GOBankingRates article

If you don’t have any high-interest debt, according to the Ramsey Solutions blog, you should strive to save three to six months’ worth of living expenses in an emergency savings account.

Should You Put Money Into Alternative Assets?

TO READ MORE:  https://www.yahoo.com/finance/news/money-expert-says-savers-losers-141608997.html

How To Save Thousands If You Want To Buy A Car

How To Save Thousands If You Want To Buy A Car

Moneywise  Sun, August 3, 2025

US car market bankrupting Americans — and it’ll only get worse.

The U.S. car market faces a perfect storm that is rapidly engulfing ordinary car owners across the country. The clearest warning sign is the rising rate of auto loan borrowers who are falling behind on their monthly payments.

As of January this year, 6.6% of subprime auto borrowers were at least 60 days past due on their loans, according to a report by Fitch Ratings.

This is the highest rate since Fitch started collecting this data in the early 1990s. And things are not expected to get better. The report says the subprime segment of the auto loan market faces a “deteriorating outlook” for the rest of 2025.

This is especially alarming given the scale of the auto loan market. As of the first quarter of 2025, households carried  $1.64 trillion in auto loan debt — surpassing both the $1.18 trillion in credit card debt and the $1.63 trillion in student loan debt, according to Debt.org.

Here’s how cars transformed from symbols of freedom to symbols of unsustainable, toxic debt.

How did we get here?

The foundation of today’s crisis was laid five years ago during the pandemic. Supply chain disruptions and factory closures created strange dynamics that pushed car prices higher.

In January 2022, 80% of new car buyers paid more than the manufacturer’s suggested retail price, or MSRP, according to Edmunds. Used car prices were rising faster than new car prices at the time, according to Cox Automotive.

In other words, car buyers paid too much for their cars.

Now, values have declined while many owners have seen a steady rise in interest rates. This shift has pushed many car owners underwater on their purchase.

In fact, one-in-five vehicle trade-ins near the end of last year had negative equity of $10,000 or more, according to Edmunds. The situation is grim, and the outlook is just as bleak.

What comes next?

While the auto market is dealing with rising interest rates and dropping prices, it’s now also facing the additional challenge of President Donald Trump’s trade war.

TO READ MORE:  https://finance.yahoo.com/news/us-car-market-bankrupting-americans-142900117.html

How Much Money Would Your Kid Have at Retirement If You Invested $5 a Month From Birth?

How Much Money Would Your Kid Have at Retirement If You Invested $5 a Month From Birth?

Peter Burns  Sun, August 3, 2025   GOBankingRates

It’s obvious that those who start saving early end up with a lot more for retirement. But, what if you started saving for your kid from the moment they were born? Putting a small amount away each month, even as little as $5, would amount to $60 saved per year. By the time they reach full retirement age of 67 (for most), you will have $4,020 saved up. This number isn’t very impressive on its own, but if you take advantage of compound interest, you’ll be looking at a much higher number.

Compound interest is when you earn interest on an investment and, over time, earn interest on the interest you’ve already earned. For example, if you invest $100 and earn 5% interest on it each year, you’ll earn $5 your first year. At the beginning of the second year, you’ll have $105. When you earn 5% on your new amount, you’ll make $5.25 and go into your third year with $110.25. As time goes on, the amount you earn from interest balloons even if you don’t add any more to the initial amount.

So, if you invested $5 for your kid each month, would they have thousands or millions by the time they retire? We used 67 as full retirement age since that’s what it currently will be for future retirees. Here’s what the numbers look like.

$5 per Month

For most people, it’s relatively easy to set aside $5 each month for savings. If you put down an initial $5 investment and then start putting that same amount each month into a fund that earns 7% and compounds monthly for your child, it would start to add up and look like this:

• Year 1: $67.32

• Year 5: $365.05

• Year 10: $875.47

• Year 20: $2,624.83

• Year 30: $6,140.44

• Year 40: $13,205.62

• Year 50: $27,404.26

• Year 60: $55,938.70

• Year 67: $91,719.74

With a compounding interest of 7% each month, you effectively add $87,694.74 of interest to the $4,025 that you actually set aside. Not bad for a $4,025 investment spread out over 67 years.

$15 Per Month

While having around $92,000 isn’t bad, it’s not enough for retirement. The median amount that retirees have saved by the time they’re in their 60s is $539,068. Let’s see what happens when the savings amount increases to $15 under the same conditions. Here’s how the math breaks down:

TO READ MORE: https://www.yahoo.com/finance/news/much-money-kid-retirement-invested-130205712.html

7 Valuable Lessons About Saving Money

7 Valuable Lessons About Saving Money

Sean Bryant GOBankingRates

Growing up with frugal parents, I was often the kid who was teased for having secondhand clothes, not going on vacations, and bringing generic-branded food to school. However, now that I am an adult, I am very thankful for the valuable lessons my parents taught me about saving.

It has shaped my views on money, spending, saving and finances in general. While many of my friends have struggled with debt or excessive consumerism, I have never had to face these issues.

Within this article, I’ll go through some of the valuable life lessons my frugal parents taught me about money.

Distinguishing Needs From Wants

Growing up with frugal parents taught me the valuable skill of distinguishing between my needs and wants. While my friends were often caught up in the latest trends and fads, my parents refused to buy every item I asked for. Instead, they emphasized the importance of prioritizing needs, like a new winter coat, over wants, like the newest toy.

This is something that I have carried through to my adulthood. Now, I try to focus on essential expenses and cut back on frivolous spending. This has helped me make informed financial decisions and avoid unnecessary debt.

How To Budget

I also learned how to budget and the importance of budgeting. I observed my parents tracking what they spent and saved as a child. They were careful not to spend more than they could afford.

If they had a goal, they saved towards it. This early exposure to budgeting taught me how to set my own clear financial goals and how to allocate resources according to those goals.

“Children in frugal households witness budgeting as a regular activity,” said Jake Claver, CEO of Syndicately. “This exposure naturally ingratiates the concept of budgeting in their daily lives.

It becomes less of a chore and more of an integral part of their financial routine. By learning to allocate resources and plan expenses from a young age, children are better equipped to manage their finances effectively as adults.”

Delayed Gratification

Delayed gratification is a lesson I was more reluctant to learn as a child but one I am now thankful for as an adult. When there was something that I wanted to buy, my parents encouraged me to wait and to think about the purchase and what it would mean in terms of longevity, monetary value, and the value I placed on the item. They then encouraged me to save my money and if I still wanted to purchase the item later, I could.

TO READ MORE: https://finance.yahoo.com/news/grew-frugal-parents-7-valuable-000019101.html