Kindergarten Solution To Personal Finances

Have you read the poem "All I really need to know I learned in Kindergarten"? It teaches simple lessons of life and leadership that often get overly complicated in adulthood.

I think that the main principles of getting ahead financially are all pretty basic things that can be learned in Kindergarten.  Doing them is the hard part.

Don't Spend What You Don't Have

All of us learned as kids that we can't buy things when the money runs out.  Americans have been struggling with this basic concept for several decades now.

Financial institutions make money by loaning it and making interest so they have un-trained us from this basic principle.  The way to get ahead is to make interest rather than pay interest.

Following the simple principle of only buying things (including cars) with money you have is still valid.  Everything is cheaper when no interest is paid.  Future work is not required to pay for present spending.

Pay Your Bills

If you owe someone money you have to pay them and obviously you should never borrow so much money that could never re-pay it. 

There are a couple of things worth borrowing for.  A college education and buying a house. 

It is really important to make sure you have a plan to pay these back that makes sense.  Obviously, many people did not think this through carefully enough during the recent housing boom and subsequent collapse.   I recommend only 15-year fixed interest home loans.

Don't Steal

Borrowing from family members.  Borrowing against a house to buy a car.  Borrowing against retirement to get an RV.  Borrowing from your kids college savings fund for the new roof.  Cashing out a retirement account just because your job ended. 

All bad ideas.  These are short term decisions that break the basic principle of using money for what it was intended for.  In most cases it is like stealing from your own future.   

Save For a Rainy Day

Most us learned very early that we should save some money for things that might happen later. Hopefully your parents made you do this.  Hopefully you make your kids do this.

Emergencies will happen.  Retirement will happen. Savings makes these events non-stressful from a financial viewpoint.

Share

Many parts of the world are suffering in poverty.  No matter what view you take on the Bible, there is clear direction directly from Jesus Christ that we should be helping those in need.  We can be a part of solving world hunger and a variety of other things.

Do these simple things and you will get ahead financially.  For an organized method to get ahead financially, go down the path to stress-free finances.