Five Personal Finance Lessons You Didn’t Learn In School

Group of elementary school kids running at school, back view

The typical education curriculum generally leaves a disappointingly large amount to be desired when it comes to financial education.

The following things are some of the most important financial lessons that just aren’t taught in school, but should always be taken to heart.

Saving is more important than earning

Plenty of people love the idea of making lots of money, but one of the biggest financial lessons to learn is that it’s more important to focus on not losing money. Unnecessary spending is one of the biggest personal obstacles for people of all income levels, and so it is essential to learn how to set up a budget a precisely as possible.

It may not be tantalizing to think about self-denial, but after making it a habit, the financial freedom gained will more than make up for the discipline required to save consistently.

You don’t need to be rich to invest

The word investing means a lot of different things to many different people, though most people who haven’t been studying it rigorously can be intimidated by.

Investing shouldn’t be treated like an impenetrably complicated topic. Even though some aspects may seem complex at a glance, it is entirely possible to become more than proficient at it with just a few hours dedicated to reading up on it over the weekends. You don’t need to save up to million dollars just to become a seasoned investor.

After you’ve become well-versed in saving, you can learn how to make very rewarding investments without breaking the bank.

Value is just as important as the price tag

The amount of value that an object has is not synonymous with its price tag. If you spend your money on things that just don’t have the right amount of quality to last, then replacing them will turn out to be far more expensive than what the initial price might’ve indicated.

Learning the nature of an object’s value, along with how it rises and falls with the times, will make a person much more of an intelligent shopper. Value determination will allow you to always be able to optimize your purchases for the best financial maintenance.

Diversify your income streams

Far too many people are stuck in a mindset in which their 9 to 5 is the only possible stream of income. Do not limit your earning potential to the wages that you work for if there are other options that can be explored.

Once you have taken the values of saving and investing to heart, you will be in a good position to start learning about side ventures that you can leverage at your leisure for living far more comfortably.

The difference between being “rich” and being “wealthy”

It is absolutely vital to know the difference between being rich and being wealthy. Much like how value needs to be differentiated from a price tag, a person’s amount of capital is not the same as their level of wealth.

The true factor behind wealth comes to asset ownership, which is an effect of knowing how to invest in things that appreciate value instead of depreciating in value. Becoming wealthy is a matter of reading between the lines, occasionally denying instant gratification for the reward that is slower to come but far more rewarding in the long run.

The bulk of anyone’s financial education should never be left to a school system, or you will be sorely disappointed. Make sure to become well-versed in the art of saving, investing, value determination, income diversification, and the true nature of wealth. It may seem intimidating to learn all of this at one time, but spread it out gradually, and the rewards will be tremendous.

CC 2.0 / Kim Love