Key Takeaways
- Simplicity can be the best route for many things, including money.
- Business Insider recently published the article “7 Things People Who Are Good With Money Know That the Rest of Us Don’t.”
- If you only abide by one of these, make sure it’s “save first, spend second.”
If you’ve ever tried water skiing, you know that in order to get out of the water, you have to keep your knees together and bend at the waist. That’s it. Pretty simple instructions, but for those who overthink it or try other techniques, they’ll have a difficult time and find themselves falling over and over again.
Interestingly, money is like water skiing. It seems complicated and it can be difficult to get started on the right way to go about it. Recently, Business Insider came out with an article, “7 Things People Who Are Good With Money Know That the Rest of Us Don’t.” It gives some pretty simple advice on the seemingly complicated issue of money.
Although the article doesn’t rank them, the number one thing people who are good with money know is to save first and spend second (and if you choose just one, this is the one to follow). They prioritize saving and investing and they don’t wait for a bonus or some other windfall to save. Saving is part of their routine and they know that even small contributions, made on a regular basis, will help them reach their financial goals over time.
The other six things are important, too, and the next one is that people who are good with money don’t buy everything they come across. By exercising restraint, they live on less than they need to. Be selective about what you buy—maybe give yourself a day or two to think about a purchase, and you may find that the initial warm wash of excitement you felt when you first saw it is gone.
When you do buy things, don’t chase brands. This is the third smart thing, and it involves buying quality items that will last a long time, not based on a brand name, but on its value and construction. If you do splurge, do so on something you know you’ll get a lot of use out of for many years.
The fourth thing is spending money on experiences over things. Consider prioritizing experiences over material purchases. You may find that spending a small amount of money on an experience will bring you greater joy than spending a larger amount of money on some item.
People who are good with money also plan carefully for their futures. They make sure they know where they’re going. Without this planning, you run the risk of spending your money in multiple directions, too focused on the present to think ahead.
Related to this planning is the next thing, which is being willing to invest to get financial help. People who are good with money see the expense of hiring people to help them as an investment. Having experts help with the complicated areas of financial management—taxes, investments, risk, cash flow—is important.
Finally, people who are good with money aren’t always millionaires. Instead, they know how to do the best they can with what they have. Everyone has different income and credit scenarios, but those who are smart with their money know that saving whatever they can is better than nothing, even if that’s just $25 a month.
Remember, though: save first, spend second. Everything else will land in place if you follow this and make it part of your financial routine. Until next time, enjoy.
Gary
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