Money management is a particularly important skill that would benefit you and your household budget and overall finances in the future. This is a valuable tool that can help you in either reach your financial goals or survive a financial emergency. Needless to say that how your perform in the future largely depends on how you prepare for them at present.
Think of how elite athletes got to their level of play and how people look up and admire their skill. You need to understand that they did not wake up one day with the level of game they have now. They put in days, months and years of practice into their craft to improve and learn as much as they to be able to perform as best as they possibly can.
Money management is no different and you need to keep practicing and looking for sources of tips and pieces of advice that you can use to better handle you money. There are some that develops financial habits from owning a pet while some get it it from formal training like financial courses or even units taken in college.
But do you know that when you were still young and running around the house trying not to break anything with no luck, your dad has been teaching you and giving you priceless money tips. These are of course covered in several and oftentimes ordinary statements that your dad used to try to put some sense into as you ran around the house breaking everything in your way.
These money habits are important as you age and mature with your needs. Probably one f the earliest uses for financial management is when you come face to face with your student loans. CNBC.com shares that the average student loan per borrower is already at $30,000. Once you graduate, you also have to think about your living expenses and other financial needs.
Learning money from dad
When the time comes that you need to tackle money problems, you can try and go back to those statements your dad peppered you with when you were still small and see the application of those in your finances. Here are some of those dad statements that can help you in different situations whether you are trying to decide if you need to invest or pay off debt or how you can view money.
- Money Doesn’t Grow on Trees. You might have heard this often from your dad when you were tugging on his sleeves asking him to buy you that new toy in the store. Your dad could have fired off this statement just to get you off their shirt but if you think about it, he would usually say this when you are pushing for a “want” rather than a “need.” Rarely would you hear him say this if it was food or something you need at home or in school but if it is a toy, dress or just something new, he makes you rethink your priorities and makes you understand that money is not something that springs out of their wallets everytime they open it.
- You can’t have a champagne budget with a beer income. Money management can help you reach your financial goals and when your dad fired off this statement, he was merely reminding you that your finances need to measure up with your goals. You cannot fast track buying that house when you do not have enough funds for downpayment just as it might pay off to wait paying for your car in cash rather than getting a loan and losing money in interest payment. It also teaches you that you should not try to impress people by putting a front of being rich because maintaining that lifestyle can lead to debt.
- There’s No Such Thing As a Free Lunch. This is one life lesson that your dad wants you to know early on. Unless it is your mom and it’s dinner at home, you must remember that there will always be one form of payment monetary or otherwise. It can be a future favor that they will hold you onto or simply picking your brains as an expert on a particular topic. There will always one form of payment you need to manage your expectations before heading out to free lunch.
- Ask your mother. This is a staple in your dad’s arsenal of responses every time you are getting to be too much to handle. But as you look at your finances, especially now that you are married, you always need to include your partner in any and all financial decisions that you need to make in your household. This can also mean that you need to always get a second opinion with whatever decisions, especially investments that you want to make with your money. Telling your partner everything is just like that story of a married couple and their neighbor. The wife just got out of the shower and the husband got in to take a bath. Then their neighbor buzzed and the wife answered the door with towels covering her body. The neighbor looked for the husband but he was in the shower. He then told the wife that if she stripped down for five seconds, he would give her $2,000. The wife did and she went inside with the money. Then the husband came out asking if it was their neighbor and if he paid the $2,000 he owed him. The moral of the story is to tell your partner everything to avoid unnecessary exposure to risk.
- Don’t Put Off Until Tomorrow What You Can Do Today. Your dad could be helping you adapt an act-now attitude. Yes there are things that you need to take slowly but for those that you need to act on now, you must not wait for tomorrow to accomplish it. What if that deal could have been closed today but you opted to do it tomorrow and another supplier came in with a better offer and your potential client signed? DO not wait for tomorrow if you can do something today.
Paying down debts much smarter
When you are already trying to juggle your finances and money management is made even tougher with debt payments that are mounting up, here are a few things that you need to do to fast track payments.
- Combine your loans. Loan consolidation can help you simplify your payments by combining your debts all under one account. Consolidating your loans can give you one payment amount and one due date to think about as well as one interest rate on your loans. If you are consolidating your loans with a private lender and you have a better credit score than in the past, there is a chance that your interest rate can even go down.
- Put in more payment. You can choose to make more payments to lower down your balance faster than just making one payment a month. You can look at making extra payments every month or when you have a big amount at the end of the year or you have a tax refund check, you send that amount to debt payment.
- Always keep long-term plans in mind. One way to keep you motivated in paying down your debt is to always keep a visual of your long-term goals on top of your head. If you are paying down your mortgage, keep in mind how it would be to finally send in your last payment and you get to use that amount for your retirement savings.
Your dad has been teaching you money management skills when you were still young and you just have to keep those nuggets of wisdom he has been imparting over the past few years. And because it is father’s day, it wouldn’t hurt to take your dad out to dinner just to say thank you for his wisdom and guidance all these years.