Religion, health, political views — many of our beliefs and behaviors today are based on what our parents taught us as kids.
Unfortunately, when it comes to personal finance, studies have shown parents could do a much better job of educating their children.
So if you think you may have missed out on a couple of pointers from Mom and Dad, here are 10 important lessons about saving money that they may have forgotten to teach you.
1. Pay yourself first.
If you’re like many people, when you get your paycheck, you pay your bills, maybe do a little shopping or go out for the weekend, then find there’s just not enough money left over to put in a savings account.
The phrase “pay yourself first” is one of the most important concepts in personal finance because it solves this problem — when you’re paid, treat yourself like your most important creditor and funnel money into your savings accounts before spending money on anything else, including bills.
You will make your savings goals the top priority, reaching them faster while still meeting your other financial obligations.
2. Spend less than you earn.
It seems obvious, but spending less than what you earn is actually a problem for many Americans, especially within our credit-driven society.
It can be hard to refrain from buying things on impulse, or rationalizing big purchases because they can go on a credit card.
However, spending less than you earn is the only way to stay out of debt and save money.
3. Understand the difference between "want" and "need."
There is a big difference between the things we want and the things we need, though sometimes it’s hard to separate the two.
The things we truly need are the basic necessities in modern life: Food, shelter, clothing, transportation and communication (like a phone).
Once all these necessities are fulfilled, all else is considered a want — even if that want is so strong, it feels more like a need.
That’s not to say you shouldn’t buy the things you want, but properly identifying the difference between a want and a need will help you prioritize spending and stick to a budget that will eliminate excessive wants and put more money toward needs.
See the rest of the story at Business Insider
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