Lesson: Personal Finance 101

Bo Harmon

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Lesson Objective

Learn the basics of personal finance

Lesson Plan

Here are 11 powerful tips for your personal finances applied to day-to-day money management:

1. Keep it simple

It's amazing to see that smart money decisions aren't more complicated than you think. On the contrary, they are simpler. This is not rocket science, but simple and logical principles that only require that they not be violated.

Spending less than you earn is a simple but powerful principle for the well-being of your finances.

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2. Never buy a lottery ticket

The lottery is designed to win money, which in turn means that the vast majority who buy lose. There are numerous studies that indicate that the people who won lost everything they obtained and were not happier from the prize.

Solomon, who has been the richest person the planet has seen , describes it in the following way : “Then I came to the conclusion that there is nothing better than enjoying food and drink, and finding satisfaction in work. Then I realized that those pleasures come from the hand of God. "

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3. Know yourself

We are all different, in way of thinking, acting even walking. In personal finances we must also act according to our way of being.

If we are compulsive buyers, we must eliminate the use of credit cards , invest in a term account if we are afraid of the risk involved in investments or entrepreneurship.

Let's learn to know ourselves in the use of money to make better financial decisions according to our personality.

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4. Protect yourself from disasters

Insurance is the best way to face severe economic losses that can put us in financial trouble.

It is worth investing a monthly amount in insurance to protect against a complex or prolonged illness, death of the person who brings the income home, loss of assets (car, house or business) that have taken a lot of effort to acquire.

The cost of insurance can be budgeted for disasters not!

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5. Save from an early age and regularly

The time and patience are the best friends of healthy personal finances.

The famous German financier Mayer Amschel Rothschild , referred to compound interest as the eighth wonder of the world, due to the ability of this formula to exponentially multiply the original capital.

Nature explained compound interest through many examples, such as seeds that are sown and multiplied thirty-one-hundred-fold.

Also invest in your retirement, a third of your adult life could begin at 65! Pay off all your debts and try to save at least 10 times your annual salary for when you retire.

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6. Maximize what you have

Not much is expected of the next raise or a future windfall. We must be diligent with what we have,

Solomon puts it this way : “Have you seen someone diligent in their work? He will rub shoulders with kings, and he will never be a Nobody. " Jesus also encourages us to : “His lord answered him, 'Well done, good and faithful servant! In the little you have been faithful; I will put you in charge of much more. Come share the happiness of your lord! "

Let's do our best with what we have on hand!

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7. Eliminate waste

There is always "overweight" in our budgets, high cell phone bills, cable, cars, technology, meals outside the home, among others.

All of these out-of-control habits can ruin a healthy budget. Eliminate your excess luggage, travel lighter.

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8. Don't spend money to brag

Designer brands and "luxury" labels have been designed to charge high costs for people who "want to belong." If you read the book Millionaire Next Door , you will realize that truly wealthy families keep a low profile.

Showing off is a race that has no end and the only foreseeable result is to affect you financially, there will always be someone who has more resources.

It is a race in which you can never win. Remember that the only way to always have enough is to master the art of being satisfied.

9. Protect your savings

Don't use savings for compulsive shopping or craving. All businesses are behind your savings and you must be the main defender of them.

Adopt habits of delaying satisfaction, especially if it is a high-cost purchase.

As attractive as an opportunity may seem, give your head time to make cold decisions rather than emotional ones. Never participate in a business that you do not know , it is a good way to protect the capital that you have formed.

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10. Teach your kids about money

We must teach our children the good use of money from an early age and often, no one else will and they will have to make their own way.

ALSO CHECK: Do we take more care of our cell phones than our personal finances?

Solomon writes a whole book full of advice for his son called Proverbs and highlights the importance of doing so: "Lead your children on the right path, and when they are older, they will not abandon it."

Don't worry if you haven't done it before or you think you haven't been the best example. Today is a good day to start and you have a lot to share, both your successes and your mistakes.

11. Value the money

One of the best ways to value money is by dividing your monthly income by the number of hours worked per month.

Example : you earn 7,000 and you work 8 hours a day x 20 business days (7,000 / 140) gives us a value of 50 per hour. Evaluate when you buy something, the real cost of money based on the hours it took you to get it.
Example : you want a mobile phone that costs 1,000, it means that to have that item you must work 20 hours of your life (Cost = 1,000 / Average income per hour 50). Doesn't the perspective change? That is giving real value to money

Lesson Resources

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Lesson Details:

Grade(s): Ninth grade, Tenth grade, Eleventh grade, Twelfth grade

License: CC Attribution 4.0

Created: December 15th, 2020

Visibility: Public

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