Talking about money can be a difficult lesson in itself. Like we’ve been saying before, it’s a taboo to talk about money. From childhood to now, we learned quite a bit. From our money successes to our money failures, we want to be able to share openly about all the money lessons we experienced throughout our years. We still think it’s absolutely crazy how the education system does not teach people ANYTHING about money.
We know technology is growing rapidly, and with great tips, tricks and money advice at our fingertips, we forget many people are still unaware of the principles of money. Here are a few money lessons that we (successes & failures) learned over our years.
1.) Leasing cars was money down the drain
The first thing Brittany did while still in college was lease cars. She was working her Office Depot job, selling pens and paper clips, with a car payment of $250. Brittany thought it was the coolest thing having a new car every 3 years. She carried that same principle of leasing cars all the way up to her 30’s. With a low car payment, a new whip, and “you can’t tell her nothing” attitude, she was throwing away almost $30,000 down the drain without nothing to show for it. Over the course of 10 years, she threw away $30,000 into car that she never owned. You’ll always have a car payment which is one of the drawbacks of leasing a car. She changed her mindset around and instead bought a certified used car, and just paid her car off in 22 months! It can be done.
2.) Always protect your credit score
Your credit score is so important, you have no idea. We talk about the importance of it in our latest post, on “Top Reasons Why a Credit Card is Needed.” Your credit is a big determining factor in pretty much everything you do in life. Protect your credit at all costs and understand the importance of it.
3.) Spend less than what you have
Definitely a money lesson that everyone should be taught about. When you get this principle down, you can build wealth easily. Earn money, spend less than you earn, save and invest & repeat.
4.) Just because you have a credit card does not mean you can afford it
People think “oh, I have $5 in my bank account, but I have $2,500 available on my credit card” that they are good. False sense of financial security. This is also where people fall into the trap of debt. Why? Because you’re always thinking “oh, I’ll just pay it off the next paycheck”. The next paycheck rolls around, and you’re saying the same exact thing. That’s where the cycle begins.
5.) Always have an emergency fund
When we both bought our houses, we didn’t understand how important it was to have an emergency fund. We saved a good amount of money for our down payment for the house, but we didn’t have any money saved for the cost of repairs for the home. Brittany moved in her house, and her heater went out in the middle of the winter. Picture yourself in Antarctica with just a sweatshirt and sweatpants on. It was so cold that you can see the air coming out of her mouth. She did not have any emergency funds to dip into to get her heater fixed. Luckily, our parents came through and helped get the heater fixed. The lesson learned here, always have an emergency fund so you don’t have to rely on a credit card or others.
6.) Invest early
This money lesson is so important. Start investing now! The sooner you start, the sooner your money will start working for you. If you have a 401k at work, please take advantage of it.
7.) Debt is not the norm
We don’t care what anybody thinks. Debt is NOT the norm and it is NOT the way of life. Having a car payment, student loan, credit card debt is not the way to live. If you change your mindset and budget, debt can be tackled. It is doable and don’t let anyone tell you otherwise.
8.) You don’t have to go to “Taco Tuesday” every Tuesday
This also applies to Happy Hour. We remember going out every Thursday night in college to a spot that every one would be at. Sometimes we would spend money for food, sometimes drinks, and of course that adds up. If we just stayed our butts at home, we could of had an extra $100 in our pockets for the month. It’s ok to say no sometimes, you’re not going to hurt anyone feelings.
9.) Have the money talk with your spouse
We talked about this already in “12 Tips on How to Make Your Love and Money Work” but if you are married, this lesson is so important. If you are in a committed relationship, it’s so important that you and your spouse are on the same page about the money. Money is the #1 cause that leads to divorce. Remember, always have trust when it comes to love and money and have open communication! Be on the same page always, that is key to a high quality marriage.
10.) Having no credit at all is the same as having bad credit
Did you know that having no credit is kind of the same as having bad credit? Well, not really but it can be the same in the sense that you still can’t get a home loan, or rent out a place because you have no credit at all. It’s important to build your credit very responsibly. When Brittany and her husband were looking into buying a house together after they got married, her husband had absolutely no credit to even consider buying their first home. It took her husband a year to build his credit successfully enough to be put on the mortgage. Be responsible while building your credit.
11.) Never invest in something you don’t understand
That is a huge money lesson. Warren Buffett says it perfectly “Never invest in a business you cannot understand.” Period!
12.) Just because it’s on sale doesn’t mean you’re saving money
No, really this is a lesson to learn. Just because it is on sale doesn’t mean you’re saving money. You see a cute pair of heels for $1,000 one day that you had no intention on buying. The next day, those same pair of heels are $750 because they’re on sale. You didn’t save $250, you just spent $750 on some heels! Just because something is on sale, doesn’t mean you’re actually saving money.
13.) Keep and save at least 10% of your income
Pay yourself first always. This is #1 rule and the key to building wealth. Make it a habit to set up an automatic transfer to your savings every week, month, or whatever is comfortable for you. You can’t afford not to save!
14.) Invest in yourself
Gain knowledge and skills to increase your earning potential. Always educate yourself, especially on the power of money. The internet is free of great advice, resources and tools. Take advantage of it. Investing in yourself is one of the best return on investments you can have.
15.) Always have insurance
Always, always, always have insurance. Health, life, auto, renters, whatever; just have it! Life is so unpredictable and you never know what can happen. It’s better to have it then not need it, then need it and not have it.
16.) Having a college degree does not mean a thing sometimes
In our household, we were taught to go to college, get good grades, and get a good paying job. Thankfully, we didn’t have student loans to pay for because our parents paid for our college (Britt had an athletic scholarship) so it took the burden off us; but there are some people out there that had to pay for their own college education that resulted in significant high debt. Get this, people have those high student loan debt and they’re not even using their degree!!! This world is FILLED with so much possibilities to make money without having a college degree. Most of the time, employers want experience anyways! We’re not saying a college education is not important, but what we are saying is sometimes it does not mean a thing.
17.) Budgeting is the key to building wealth and getting out of debt
Always track your spending. Budgeting helps so much because you’ll be able to see where your money is going without wondering “why am I so broke?” at the end of the month. It allows you to identify where your spending money on. Once we started budgeting our money, we realized our mom was right, that we do have food at home.
18.) Ask for that raise, the worst they can say is no
Like for real, the worst they can say no. Did you know, if you never ask for the raise, they will never give it to you. Just ask for the raise!
19.) You are responsible for achieving your financial goals, no one else
You are in charge of your financial success. Don’t blame your upbringing for your money failures. You are in the driver seat of your own life.
20.) Be generous, it goes a long way
Small acts of kindness can have a huge effect on our world today. If you want to change the world, be loving and generous.
21.) Never compare yourself to someone’s journey
Everybody’s journey is different! Just because it’s taking you longer than others doesn’t mean you failed. Appreciate yourself and your own journey.
22.) It’s ok to talk about money, it shouldn’t be a secret
Talking about money should be an open conversation. Break the taboo!
23.) Having a big wedding is not always the coolest thing
Can you believe that people actually go into debt for a 4 hour event just for it to be judged by others? We say this because people spend a ridiculous amount of money to impress other people just for your family/friends to judge your special day (we know people like this, sad to say). People will spend almost $35,000 to $100,000 on their wedding, putting it on credit or taking a personal loan out to pay for it. Why not have a small ceremony with family and close friends, and take that money and put it on a down payment on a home. We’re not judging anyone who wants to go big on their wedding if they have the means to do it, but when you do it on credit, that’s where the line can be drawn.
24.) Don’t upgrade your lifestyle just because you got a raise
So, you asked for that raise, and now the first thing you do is upgrade your car and/or your house. Can you imagine if something happened to your job (recession, you get fired, hurt or sick etc.) and you can’t afford to make the payments? Or how about you’re just simply living way beyond your means. Rich people stay rich by living like they’re broke. Broke people stay broke by living like their rich.
25.) Always carry cash with you at all times
This is a major lesson we learned. Imagine if the power or the banks stopped operating (because this can definitely happen) and you had no way to get your money out of the bank. You would be stuck! But if you had cash handy, you would be good in a crisis. Cash is still king and it’s important to have it with you at all times.
Everyday, we are still growing and evolving; and learning new things about money all the time. We hope you enjoyed our money lessons that we learned through out our years.
What are some of the money lessons that you learned through out your years? Comment below 🙂