5 things I wish I knew about money 10 years ago - personal money experiences - Savology financial planning

In the next few months, I’ll be taking on what will likely be the most important and rewarding job of my life; I’ll be a dad.

As I work on preparing myself for fatherhood in a variety of ways, I can’t help but reflect on the many lessons and values I’ve learned throughout my life, even just in the past 10 years alone.

A lot of these reflections and thoughts relate to money.

No, I’m not saying that money is everything. But what I can guarantee you, and you’ll already know this if you’ve been in my position browsing for baby cribs, strollers, and baby clothes. Having a solid financial foundation and relationship with your money does in fact lead to better outcomes in more areas of your life.

Truthfully, I’ve made my fair share of financial mistakes over the past 10 years. If I had been in a better position with my overall financial understanding things could have been different. A lot of the mistakes I made could have been easily avoided, which would have benefited me significantly.

Fortunately, over the past couple of years, I’ve been able to learn an incredible amount from those mistakes. I’ve also dedicated time and attention into developing a solid financial plan and building better financial habits.

So naturally, as I begin to transition into my new role of becoming a dad, there are a lot of not only life lessons, but money lessons that I’ll be passing on to my son, and any future additions afterward.

Below are 5 very important lessons about money I wish I personally knew 10 years ago, and lessons that I will be passing on to my kids:

Money lesson #1) Improving your financial literacy is always worth the investment

Like most things in life, making improvements and acquiring knowledge takes time, effort, and dedication.

Your financial literacy is no exception.

And yet most people continue to neglect improving their financial literacy while still questioning why they are in the same financial situation they found themselves in exactly a year ago.

One of the best investments you will ever make in your life is investing in the relationship you have with your money. I’m not saying you actually have to invest money, but you certainly have to dedicate the time and effort into making those improvements.

By investing in your financial understanding, you’ll eventually be in a much better position to pay for things like vacations, classes, home improvements, cars, a new home, and of course funding your retirement.

If you’re reading this and looking for ways to improve your financial literacy, here are 9 of the best personal finance books.

Money lesson #2) Focus on building a solid foundation

When it comes to putting money tips and tricks to practice, it’s easy to get caught up in the technical approaches and investments that are focused on building your wealth.

But before you start doing that and get way too ahead of yourself, take a step back.

You’ll be in a much better position in the long-run if you start with the basics and build a solid financial foundation first.

Focus on forming good money habits. This includes things such as trimming down unnecessary spending habits, spending on value, finding and using an accountability partner, and especially avoiding high-risk debts.

Remember, it’s okay to start slow when you’re just getting started.

Money lesson #3) When it comes to your money, you are number one 

I’m not at all saying that you need to be or should be selfish with your money. But I am saying that you always need to prioritize your values and your goals first, before anything else, when it comes to your money.

The easy example to illustrate this, which you have likely read before, is showing how you should allocate your money from every paycheck that comes in. When you first get paid, do not spend the available money on non-essential purchases or the nice-to-have items.

Instead, allocate that money towards investing in your future first. Take a portion of that money and put it towards your retirement fund, essential bills, and emergency fund first. Then, depending on how much is available, if any, allocate the remainder towards things you value; this could be education through online courses, chipping away at a small vacation fund, or padding your emergency fund.

Your future-self will thank you on more than one occasion.

By disciplining yourself and sticking to a budget, you’ll find that you’ll be well on your way to making those improvements.

Money lesson #4) Focus on what you value

Values are there to motivate us, give us purpose, and guide us. This becomes more and more evident when we focus on aligning how we spend our money with what we truly value – the outcome is navigating your financial life and working towards your goals with more clarity.

Every single penny you spend should have a very clear intent of adding significant value to your life. If you end up spending your money out of habit rather than purpose, your money won’t seem to go as far and reaching your goals will seem even more challenging than they already are.

When it comes to focusing on value, it’s important not to get caught up in how others are spending their money – seriously, don’t worry about keeping up with the Joneses. 

Additionally, focusing on value leads to a better outcome and chance of reaching financial success. You’ll feel more confident about the decisions you’re making, will likely find yourself happier with your financial life, and even more focused on other areas of your life that you may have been neglecting. 

Money lesson #5) You can never be too prepared or start too early

I’ll keep this one short, I promise. 

Despite what you may have heard, there is no such thing as being too prepared when it comes to your finances.

Similarly, there is no way of getting started too early or being “too young”.

The more prepared you are by taking the right steps through proper planning, and the sooner you start building your financial foundation, the more likely you will be to reach financial security.

Keep moving forward with your finances

Hopefully, these 5 lessons, or tips, about money provide some clarity and insight for your own financial journey.

As you look for ways to continue improving your financial situation, it’s important to recognize that you will only reach your financial goals if you put in the work, develop strong habits, learn from your mistakes, and commit yourself to invest in your relationship with your money. 

Your financial future starts today

Savology is a free financial planning platform providing fast and free financial planning. In just five minutes you can get access to a free, unbiased, personalized financial plan. Your Savology plan will give you tailored action items to start working on as well as an overview of your financial progress so that you can continue making improvements. As you complete action items and modules, you’ll receive new ones to stay motivated and working towards your financial goals.

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