Even as a millennial I feel like I left school not being prepared for the real world financially.
When I taught fourth grade, my students had a basic knowledge of money. However, as they progress through school, like I did, who is responsible for teaching more important money lessons? Parents … teachers … the internet … The Savvy Couple?
This is our list of 9 important money lessons you should have learned from school or your parents.
1. Budget Your Money
Here at The Savvy Couple, we stress how important it is to have a monthly budget.
Budgeting is a system that tracks your money in and out. After you get used to budgeting we recommend giving a purpose to every dollar. As children, we saw our parents spend countless hours making sure the “checkbook balanced.”
Luckily, millennials do not have to be old school anymore and balance checkbooks with paper and pen. We have all sorts of digital options, such as Mint or Personal Capital. It is very important to have control of your finances though.
2. Live a Frugal Lifestyle
Being frugal is definitely a lifestyle we want to help more people live. Making small daily or weekly changes to your lifestyle can have huge effects on your personal finances.
I think when people think of the word frugal, they think cheap. There is a huge difference between being frugal and the TLC show Extreme Cheapskates. We are not telling you to live on candlelight and hang out by dumpsters of restaurants and wait for them to take out the trash. That’s just disgusting.
Being frugal is being intentional with your money and always get the best value. You can live a frugal lifestyle that isn’t extreme.
Stop eating out so much! Get over having to have name brand items. We do most of our grocery shopping at discounted stores like Aldi, PriceRite, or Walmart. Comparing the ingredients to the name brand ingredients they are often identical and significantly cheaper.
Money Lesson: Living frugally is living intentionally with your money. Save in areas you can so you have financial freedom in areas that really matter to you.
3. Negotiate Everything
According to Kelan, “Everything is negotiable!” I, on the other hand, do not fully support that statement, but it does hold a lot of truth.
If you are headed out to the grocery store a gallon of milk is not negotiable (Kelan would say different). However, something like buying a used car is completely negotiable.
Being able to negotiate is definitely a skill. Thankfully Kelan is great at it! You need to always do research on anything you are about to negotiate. This way you have facts to back up your negotiation battle.
Kelan does all of our negotiating. We do try to negotiate everything we can. Some include; house, cars, cable, internet, phone, insurance, Craigslist or garage sale purchases, vacation, and much more.
Two of the biggest things that we learned when you place a call to try to get a bill reduced is to always begin with the person’s name and asking for help. “Good afternoon to you too Sandra, I am wondering if you can help me today…”. Using someone’s first name along with “Can you help me?” always give you the best chance of getting what you want.
Money Lesson: It doesn’t hurt to ask for a lower price on anything! The worst they could say is no. Negotiating is a battle, be prepared.
Savvy side note: If you’re just not good at negotiating, or are too scared to try, consider using a service such as Bill Shark to do the negotiating for you!
4. Stay Away From Debt
Stay away from debt as much as possible! In some cases, debt is almost unavoidable. If you need a loan, be smart about it and shop around for the best rate. Consider other options for school, or if necessary, consider refinancing if you’re already in deep.
Kelan and I were able to walk away DEBT FREE for our first two years. Consider if living on campus and getting the highest-priced meal plan is the best decision for you in the long run.
It is so hard to think about life after college. However, it will be over before you know it and then the debt you accumulated will sink in. To quote the best: “Attack debt with a vengeance,” said Dave Ramsey.
Using a tool like Credible is a great way to see if refinancing your student loans would be a good option for you.
Money Lesson: Try to live as debt-free as possible. Do not carry any type of debt unless it is unavoidable!
5. Increase Your Income
You can only cut your expenses and save so much money before you start to affect your quality of life.
Whether that’s asking for a raise, getting a promotion, starting a side hustle, or starting an online business the opportunities are endless.
Check out my video below with my favorite ways to make money right from home.
6. Start Saving For Retirement Early & Often
Actually, you should have started to think about retirement yesterday! Planning for the future is SO important and you do not want to wait to start planning and lose out on potential capital gains, compound interest, and company matching.
Money Lesson: Get a plan for retirement and start saving as soon as possible. What you put in now, will pay off in the long run!
7. Taxes Suck!
Growing up you do not learn a lot about paying taxes. This is unfortunate because we all will eventually begin to start filing and enter the 1040A, 1099 world.
Most college students can file for free. One of the biggest lessons to learn about taxes is what tax credits and deductions you can claim.
Another important lesson is to keep your tax papers organized. If you are filing alone or with a significant other a two-pocket folder is a great way to stay organized.
Kelan places his documents on one side, I place mine on the other and shared documents hang out in the middle. We have each folder color-coded to a year and this provides an easy location to look up any questions on previous year’s taxes.
Money Lesson: Stay organized with your tax documents and see if you can file your taxes for free with H&R Block.
8. Credit Cards Can Be VERY Dangerous
Credit cards are an important tool to build credit. However, they are the worst debt to carry. The biggest money lesson about credit cards is that you should NEVER carry a balance. Interest rates on credit cards are ridiculously high averaging somewhere around 15%.
You never want to get stuck in a trap where you are only paying the minimum balance. This is a money-maker for credit card companies and you will be stuck on the hamster wheel forever trying to pay it off.
Money Lesson: Credit cards can be a big financial trap. You should only spend what you can pay off immediately or use cash or a debit card.
9. Keep an Eye on Your Credit Score
Many people have the misconception that if they check their own credit score it will negatively affect their credit score.
This is not true at all. By checking your own credit score you are doing yourself a favor by knowing where your credit score falls at all times.
What affects your credit score is when an outsider does a hard inquiry check on your credit history. This could be a new credit card company, mortgage company, auto loan, rental application, etc.
If you’re struggling with increasing your credit score we highly recommend signing up for a free Credit Karma account.
We have been using them for over a decade and it has helped us both reach a credit score of 800+.
Money Lesson: Being aware of your credit score is a good habit especially when looking to purchase a home.