Essential Personal Finance Tips You Didn’t Learn in School

School can prepare you for many things, but it often fails in the personal finance sector. There are secrets to surviving the financial world that are missing from the classroom lectures.

Your math and science classes probably covered subjects like solving fractions and understanding the water cycle. However, who taught you about negotiating your finances or understanding the true cost of having a child?

Unfortunately, important financial lessons aren’t part of the curriculum. Money management requires certain skills and tactics that must be acquired to guarantee success. You can overcome the shortcomings of schools by learning these finance lessons on your own.  

How and When to Negotiate

You probably tried to negotiate a night without homework during class, but schools don’t teach financial negotiation tactics. However, your personal finances depend on knowing when and how to negotiate. You can save a significant amount of money by learning this crucial skill.

1. Discover when to negotiate. Understanding the right time and place to negotiate will help you save and make smart financial decisions.

• Negotiation is an important part of saving more money.

2. Negotiating on vacation. The next time you travel you may have to negotiate the prices of the goods you buy.

• In many cultures, negotiating is part of doing business. If you plan to visit foreign markets, be prepared. Businesses and individuals deliberately set their prices higher because they know they will come down during the bargaining.

• Do you want to buy an onyx necklace? Are the hats in the shops tempting you? Then, you need to be ready to talk about the price and lower it.

3. Negotiating your salary. The first step of successful salary negotiation relies on doing your homework. How much are others in the office making? How much are others in different offices making? Make a list of the low, average, and high salaries for your job.

• Be prepared to show why you deserve a higher salary. What can you contribute? What have you done in the past? Why do you deserve to get more money from the company?

• It’s important to stay calm and positive during the salary negotiation process.

4. Negotiating credit card rates. Have you tried to get a lower interest rate?

• Credit card companies may be willing to negotiate their rates with long-term and good customers. Have you paid your bills on time? Have you been a loyal customer for many years?

• It’s worth trying to get a lower rate by showing your value to the company.

• Threats to switch to a lower interest card may also work. However, you need to be prepared for the credit card company to call your bluff.

5. Negotiating your insurance rates. Consider giving your insurance agent or company a call to negotiate your rates.

• As a long-term and dedicated customer, you may be able to find hidden savings.

6. Negotiating your next car. Purchasinga new vehicle can be a challenging and involved process. You’ll have to be ready to talk about prices from dealers or private sellers.

• Do you want to pay less for that shiny new van or older sedan? Negotiation is a process that requires you to be ready with research and information.

• Have a figure in mind that you want to reach. Remember, you may have to walk away if the negotiation isn’t working in your favor.

Negotiation is an important skill that is missing from school curriculums. However, you can learn the essentials to survive and thrive.

It’s important to take personal vendettas and emotion out of all financial negotiations. You’ll need to remain calm to get what you want. Negotiation can open a new world of saving for you and your family.

Understanding the True Cost of Children

Schools may discuss abstinence and try to scare students away from becoming teen parents. However, the classroom textbooks and handouts don’t cover the true cost of having children.

The U.S. Department of Agriculture estimates that it costs parents $245,000 to raise a child until he or she reaches adulthood. The estimate is an average because the cost of living in your area has a dramatic impact on how much it takes to raise children.

Depending on your city, it can cost $100,000 to $500,000 to raise a child.

Children can brighten your life, but you must consider the cost of having them before shopping for the nursery toys.

1. The cost of having a baby. Have you thought about all of the financial aspects of having a baby? From the hospital stay to the cost of formula, children are expensive.

• Do you know what it takes to raise a baby from the financial side? Parents in a BabyCenter survey shared that they spent $10,000 in the first year on one baby.

• Have you thought about all of the items your baby will need? Diapers, clothes, formula, bottles, blankets, toys, bottles, and more items will appear on your shopping list.

• You’ll also need to consider the hidden costs of a baby. Healthcare, vaccines, and childcare can quickly add up.

2. The cost of older children. Expenses keep adding up as the children grow. Older children still need food, clothes, toys, and other items. However, new categories of financial expenses get added too.

• Have you thought about the cost of summer camps? What about after-school programs? Even basic lunch programs add extra expenses to your monthly budget.

• Babysitting is another expense that will have you wondering about your budget.

• Unexpected trips to the emergency room, classroom activity fees, and late night science fair projects mean your wallet will get thinner.

3. The hidden costs of having a baby. Children add to the piles of laundry and cups in the dishwasher. You’ll be using your appliances more, so your electric bills will go up. In addition, your gas bills will increase from driving them to school, activities, and friends’ houses.

4. The impact of children on your work. Schools never teach you all the ways children will affect your career.

• A baby changes your life in permanent ways, and your career is one of these elements.

• First, a baby may require you to take time off. Do you get maternity leave? Will your job be waiting for you once you want to return?

• Older children can still affect your career. You may have to miss meetings to pick them up from school or skip a day to deal with their illness at home. How will your boss and coworkers respond?

• Parents who decide to stay at home to be with the child face an entire world of career changes.

• Leaving the workforce to raise a child may stop you from advancing in the future.

Children can brighten your day and life with their laughter and questions. They can also drain your finances in ways you may not expect. It’s wise to plan ahead.

How One Hour on Finance a Week Benefits You

If you decide to start using one hour a week to learn more about finance, then you will greatly increase your knowledge in a short period of time.

One hour a week can help you focus on your personal finances and learn more about them:

1. Setting aside one hour a week for finance. All you need is one hour to make a difference.

• Where can you find the extra hour to work on your finances? You may want to consider using one hour of your weekend. You may also want to make a commitment to turn off the TV for one hour during a weekday to work on this. Have a set schedule and stay accountable to using it.

2. How to use the hour effectively. One hour may not seem like a lot, but you can accomplish great financial steps forward during this time. The key is consistency.

• This is the perfect opportunity to organize your bills and learn more about your spending.

• Use the hour to work on your budget and compare your costs to previous years. Also, consider organizing those annoying receipts you know you will need at tax time.

3. Learning more about finance. Are you trying to increase your money knowledge?

• Spending one hour a week to increase your general money knowledge will help you long-term.

• You can read books about finance, find articles about money, or study online sources for information. The goal is to increase your overall understanding of finance topics. Do you want to learn more about investing in new stocks? How about growing your knowledge of retirement funds?

Simply spending one hour a week to increase your financial knowledge can help you in many ways. You’ll learn more about your personal finance and discover new ways to plan or budget. You will work on a better financial future.

Just one hour can make an impact, so build it into your schedule.

Why Getting Rich Slowly is Better

Your textbooks didn’t cover the plight of lottery winners after they spent everything they won. Your homework assignments didn’t show you how getting rich quick can destroy people’s lives in numerous ways.

Unfortunately, the concept of wealth isn’t covered well in schools.

It is up to you to learn why getting rich slowly is better than instant millionaire status.

1. Understanding how millionaires build their wealth. It takes times to build a fortune, and millionaires aren’t an exception.

• It’s easy to forget that most millionaires today didn’t inherit their fortunes. Most of them spend years, and sometimes decades, building their wealth.

• The instant millionaires like lottery winners are unusual. The Powerball reveals that the chance of winning is one in 175 million.

2. Why getting rich slowly is best. It may be tempting to want instant millions, but it’s not always the best way to stay rich.

• If you are lucky to get rich, will you be able to stay rich long-term?

• Money management skills are essential for building and keeping wealth. However, they take time to learn.

• If you don’t know the right finance skills to keep your money safe and growing, you will lose those instant millions. Getting rich slowly gives you the chance to stay ahead.

3. The hidden dangers. Have you considered what happens to lottery winners?

• The instant fame and money may seem tempting, but there are hidden dangers. Do you know what happens to lottery winners after they get their checks?

• Instant wealth means you must immediately learn how to manage a huge sum of money.

• There is limited time to learn how to control and manage every aspect, so some lottery winners rely on managers. This can result in lost earnings and scams.

• There are plenty of horror stories among lottery winners that include destroyed marriages, failed relationships and angry relatives. There are also stories about depression, murder and suicide.

• A study from Britain found that an estimated 44 percent of the money they won was used up by lottery winners in five years.

• Instant wealth also doesn’t guarantee happiness for you or your family. A study from the University of California, Santa Barbara found that winning the lottery doesn’t make you happier.

Getting rich slowly lets you build your finance and money knowledge over time, so you can keep the wealth. Sadly, many lottery winners spend their money within a few years and return to their previous state with little to show for their winning ticket.

Growing your wealth over time gives you the chance to figure out the best investments and retirement opportunities. You’re also less likely to lose all of your savings and earnings if you have more time to plan.

Why You Need a Life Insurance Policy 

Schools don’t cover life insurance policy information. Your teachers don’t explain why you need it or what type you should get.

However, it’s important to understand why you should have a life insurance policy. You’ll also have to learn which policies are best and research companies.

Life insurance can be a major factor in your future. Even at a young age you’ll need to consider it and investigate it. This isn’t a topic that can be put off for later. Life is too unpredictable to wait.

1. Why you need life insurance. Life insurance is an important investment.

• This type of insurance will provide your family and loved ones with a payment once you die.

• The life insurance money is meant to replace your income, so your family can survive without you. It’s important to get policies that will cover the income for a number of years.

• Your family won’t pay taxes on your policy.

• How will your child or wife cope without your income? Life insurance is the financial safety net that will keep the electricity going, the mortgage paid, and the refrigerator well stocked.

• In addition, life insurance can help pay for expensive funeral costs or medical bills you leave behind.

2. Why you need life insurance if you’re married and childless. If you’re married, but don’t have children, you still need the insurance. Your spouse can be left in a financial mess that will ruin him or her.

• Your spouse will still end up with bills such as funeral costs and medical expenses. Plus, your partner will have to face paying daily bills with half the income.

• Your spouse can be left with a pile of your debt. Can you imagine the struggle of paying off your credit cards and other loans? How will he or she manage without the extra income?

3. Why you need life insurance if you’re single. Even single people can benefit from it.

• You may not have to worry about a spouse or children, but do other family members depend on you? Are you helping your parents pay their bills? Are you putting a cousin through college? How will they manage without you?

• Your debt can become a huge burden for your family once you’re gone. How will your family manage the debt you leave behind? Who will pay for everything without you?

4. Why you need life insurance if you’re retired. Retired individuals still need this insurance.

• Even retired individuals can benefit from life insurance policies. They’re a great way to leave behind money to your heirs.

• Life insurance benefits don’t get taxed, so your heirs benefit.

• Retired married couples also need to think about life insurance. If one of you passes away, how will the other manage?

• Often, retired married couples rely heavily on their Social Security. How will you survive if you lose half the money coming in every month? Pensions can also end with the loss of a loved one.  

Life insurance may not be an easy topic to consider, but it’s an important one. Your financial future and the future of your family or loved ones depends on your income.

The loss of your income can have devastating consequences on everyone.

Life insurance creates a safety net that will provide for your loved ones once you’re gone. It’s a wise way to plan ahead.

By eliminating money worries, you’ll reduce the stress and anxiety of your loved ones if you should pass on. You’ll be providing them with a way to focus on overcoming grief in a stable financial environment. They’ll be able to stay ahead of the bills and save.

Make time to talk with your insurance agent about what type of policy will best fit your situation.

Why You Need to Evaluate Your Money Thoughts

Schools love to brag about their goal of creating critical thinkers. However, the critical thinking shouldn’t stop at solving a math problem or getting an A on a quiz.

The thoughts you have about money have a direct impact on your wealth and success:

1. Understanding the meaning of mental accounting. Mental accounting is a key concept that is missing from schools and classrooms.

• Economist Richard Thaler created the idea of mental accounting. Mental accounting explains how people categorize, think, and evaluate financial concepts.

• The mind can play financial tricks, and habits are another issue.

2. Understanding your thoughts on the worth of money. Your thoughts on how much money is worth can change based on the situation.

• A $3 cup of coffee may not seem expensive at your favorite coffee shop. However, a similar $3 cup of coffee in an unfamiliar restaurant makes you think they’re overcharging you.

• It’s important to recognize this phenomenon, so you avoid spending more and can save long-term.

3. Understanding the impact of large numbers. Seeing large numbers also affects the mind.

• There is a reason why stores put prices like $5.99 or $10.99 on their labels. The mind sees these numbers differently from $6 or $11. Seeing the larger number can make you hesitate or even forego the purchase altogether.

4. Understanding your money attitude. How you feel about money matters.

• An open mind is essential. Is your attitude toward money positive or negative? To achieve success you’ll want to make it positive.

• The mind is linked to your actions, so your money thoughts matter greatly. Do you find yourself shopping out of boredom, being scared to open your bills, or thinking your debt will never end?

• Negative money attitudes can hurt you. Your money issues may seem enormous, but negativity will only make them worse.

• It’s also important to consider the impact of your childhood and family on your money attitude. The way you were raised also affects how you handle money.

Your attitude toward money can affect you in many ways. Your thoughts about money influence you on a daily basis. Consider how your thoughts are affecting your actions and ability to make positive financial decisions. Your future depends on it.

Conclusion

Money management and personal finance aren’t popular school topics. In general, schools avoid them or only provide you with limited information.

You won’t learn about negotiating your credit card interest rates in math class. You won’t learn about the cost of children in biology class. You won’t learn why you need life insurance in the music class.

Your financial health depends on your ability to learn outside of the classroom.

If you want to be successful and happy, you will need to study the finance lessons that schools don’t bother teaching.