I went through my teenage years and early 20s without learning about finances. Along the way, I realized that the little knowledge I gathered from my parents did not result in more wealth. And so I struggled through life. Today, I teach my children money-saving tips that guarantee a smoother journey amassing wealth in the future. My goal is to help them understand certain monetary lessons so they don’t have to reshuffle their mindset when they reach adulthood. If we teach our children the following concepts, they can make significant financial progress and enjoy better lives.
Being an avid financial blogger, I hardly track my spending manually. I hope you know that monthly budget tracks are pointless. The thing with budget tracks is that they make us feel guilty if we overspend. However, we must not underestimate our monthly expenditure. There are payments we cannot escape, like rent, utilities, transport, and food. Then there are areas we can strive to minimize costs, e.g., home renovations, car repair, and making the most of cheap car insurance no deposit plans that are on the market, as well as cheaper health and life insurance premiums, vacations, and holiday gifts. Less predictable expenses can range from 10%-30% of total spending, depending on our lifestyle.
Rather than tracking monthly expenses, we should plan how to spend every penny. This pre-spending approach teaches us that every cent we use gets us into financial trouble. In the end, we can come up with a simple spending plan before the month begins. the first step to pre-spending is splitting income into:
- Fixed/mandatory expenses
- Guilt-free expenditure
When we allocate finances in this manner, we are sure to pay off responsibilities. Then the remainder can go into savings and investments. The guilt-free money allows us to buy anything we want, knowing that important areas have been covered.
Our health has a direct impact on the cost of living. When we are physically fit with no disease, we spend less on healthcare. Living a healthy life can sometimes reduce our health insurance premiums. I looked at the potential cost of smoking using an online calculator, and the results are shocking. This habit is both expensive and potentially deadly. We should stop it, for crying out loud.
Convenience or fast foods are expensive in the long run. Instead, we can pack lunches when going to the office and prepare homemade breakfasts rather than eating at the town restaurant. Simple and healthy replacements save a dime in the long run. For instance, preparing meals on the weekend is a great way to make cheap and easy snacks for the next week. Sometimes we cannot escape dining out. We can maximize savings with restaurant discounts and coupons. Let us spend only on what we can afford with no interest.
Another way we can save on health is by shopping around before choosing a medical practitioner. The difference in appointment fees and basic procedures like dental cleanings is surprising. Major surgeries may vary according to our geographical location. Where possible, we should shop around before choosing a hospital.
Money, just like opportunities, is limitless. The wealthy have an abundance mindset. If we solve problems (which are never-ending) to earn money, our ability to save money should be infinite. Let us stop giving our kids the idea that money is a scarce resource. Scarcity is only in solutions that society wants. And this is where we need to master- solving problems to make money and save. The sooner we teach our children to think like the rich, the better they will be financially in the future. Let us instil the lessons as mentioned above in our kids every day.