Vital Money Lessons You Should Have Been Taught in School – Part 2
posted on Sep 3, 2021 | 1201 likes
Skills to make you financially successful.
In this part two, we continue the discuss on the vital money lessons that should have been taught in schools but weren’t. If you missed the part one where we discussed the first vital 5, here’s the link to catchup.
Money is one of the essential things that you’ll need in your entire life, and we can say it without any doubt. But don’t our schools realize it? Have you ever seen any school teaching students about budgeting and the way mortgages work? Probably no.
This lack of personal finance education is what has led to many bad financial decisions. To bridge these financial illiteracy gaps that exist, financial organizations like Page take it upon ourselves to educate people on personal finance through our weekly blog.
When you do a simple Google search on the top loan companies in Nigeria, you will find Page Financials as the leader because we believe that sharing relevant information is important and you need to know how to manage your finance, else, you will always run into financial mishaps.
With that said, let’s go straight to the next 5 money lessons you should have learnt in school.
1. How to Talk About Money With Others
Talking about money can be a bit of a sticky subject, some find it awkward while others flow easily with it.
Being comfortable to talk about finances leads to transparency and might aid with better overall management. It also might remove the guilt that some of us feel about spending!
Being able to discuss finances also has a huge role to play when seeking for facilities either for personal or business use. Wouldn’t you rather give a loan to someone who knows their numbers?
You might need to discuss estate planning with older individuals or chat to a partner about how their credit rating will affect you. Of course, don’t be afraid to ask for help if you’re struggling to manage your money. Our help line is available 24/7 to talk with you if you need to get started with discussing your finances.
2. The magic of compound interest
Compound interest is a powerful thing – it just depends on which side of the calculator you're sitting.
This interesting concept can grow the money you start out with faster than expected, but it makes it harder to clear any money you owe. Why? Because compound interest multiplies over time by adding interest on top of interest.
When you deposit money in an investment account, for example, after a certain period of time it will earn interest.
If you leave any interest earned from your initial stash in the account, then the new larger amount continues to earn interest.
And as it happens over and over again (called 'compounding') your cash pile grows faster and faster, just like a snowball.
Unfortunately, compound interest works the same when you owe money with interest.
Companies who lend you money to buy things, are literally making money from money too. Dangerously for financially illiterate people, this can lead to a debt spiral, as the more you borrow the more you owe exponentially.
At Page, we provide unique financial advisory to customers to ensure that they are fully aware of their financial condition and we try to help our customers make sound financial decisions that will not put them in a debt loop.
3. Basics of A Good Budget System
Budgeting is one of the most important things you can do to take control of your money and build a financial plan for the future. This is especially true as you first are getting started with your finances.
There are a number of ways you can create a budget, but the crucial step is ensuring you are able to stick to it.
When creating financial goals, a budget should work with your lifestyle to build upon wealth and stop you from wasting money unintentionally.
To start with budgeting, it’s a good idea to calculate your monthly income, then your monthly expenses. These are the outgoings that don’t particularly change from month to month; your rent or mortgage, housing bills, car insurance etc.
Add your less predictable variable expenses to this, then simply allocate your income realistically to each portion of the expenses and track your progress.
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4. Concept of Paying Yourself First
The idea of paying yourself first allows you to make inroads into building wealth before your money goes out towards bills or spending. It makes saving money easier by automatically dedicating a set amount towards funds you can use in retirement or later life.
By prioritizing your own savings, the pay yourself first method can allow you to accrue a good emergency fund and change the way you look at finances.
Instead of controlling your life, this method helps you understand that money exists to facilitate the lifestyle you want to lead.
5. Importance of Living Within Your Means
It’s so hard these days to scroll through your favorite social media app and try NOT to compare yourself and your lifestyle to the people you follow, especially if your feed is full of celebrities.
Even without social media, comparison can be hard to escape. But we need to remember that these online spaces are curated, not realistic.
Often, you don’t see what things are really like behind the scenes.
Living within your means is making the most of the resources you have available, but not going beyond that.
It’s about saving up over time for large purchases instead of splurging with your salary on the first week it arrives. This creates a sustainable lifestyle and lowers your risk of experiencing financial difficulties.
If you like most people were never taught some of the above money lessons, but you are ready to learn the value of money — you are in the right place.
No matter your age, taking the first step to learning and improving your finances is a commendable step.
If you’d like to speak one-on-one with us for financial advice, you can speak to a financial expert at Page for free by calling 017007243 or sending an email to firstname.lastname@example.org
Visit our blog at https://pagefinancials.com/blog for more inspirations on how to take charge of your financial life.