The Finance Blogger

Financial Lessons For My Kids

What are the most important lessons you can tech your kids? There are lots of things, however this site is focused on financing and saving money. We put together 4 or 5 financial lessons that we think are the most important. It is never too early to begin start educating your kids about money. It will serve them well during their lives and hopefully make their quality of life easier.

Financial Lessons To Improve Your Life Style

Save 10% of Your Income

Regardless of how much you make always set aside 10% of your income for a rainy day. Or for retirement or for emergencies. Invest the funds in a diversified account. Never touch them until you have a real emergency or it is time to retire. Manage the funds, make sure they are invested in blue chip stocks that pay regular annual dividends. You will be amazed at how much you can accumulate over 30 years allowing you to retire early if needed.

Separate Wants and Needs

Whether you are 10 years old or 65 years old, knowing the difference between things you would like to have and those that you need can go along ways to saving a lot of money. Saving money by not purchasing those things you want to have can mean a huge improvement in your lifestyle over the long term.

Financial lessons Material Possessions vs. Wealth

Anything you purchase is worth less as soon as you walk out the door of the store. That expensive car you just purchased may look great, but you lost 20% of its value the moment you drove off the car lot. It is now a used car. On top of this loss consumers forego saving money and earning interest off of it.

Material items may impress for awhile, then you have to buy another to maintain your image. Next thing you know you are spending all of your money on depreciating goods and not saving anything for a rainy day or retirement.

Compound Interest Earnings

Earning interest on top of interest is one of the fastest ways to build savings for retirement or vacation or emergency funds. The rule of 72 is appropriate to discuss. Divide 72 by the investments rate f return to find out how long it will take for the investment to double.

If It Sounds Too Good to Be True, Then it Probably Is

Always be careful of promises tat sound better than they really should be. If you are doubtful, check the promise out in detail and run if you suspect any kind of a scam. This is one of the most important financial lessons.

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