Lesson Six: The Twelve Principles of Finance
1. Understand the importance of working and earning.
With the recent economic news you probably remember your grandparents advice about working hard. Remember that when you work today, you are sewing seeds for your financial future.
2. Get all of the financial Education you can.
Most people who are having trouble with money can trace it back to an uninformed decision they made, because of lack of knowledge. There are many resources available, including your local library, community colleges, and the Internet. Use them to your full benefit.
3. Pass on your financial education to your circle of influence.
Pass on your financial education to your circle of influence. Have you ever noticed that when you surround yourself with like-minded people, you are better able to live by what you believe?
4. Pay financial obligations promptly as part of integrity and honesty.
When you live up to your obligations, you not only gain trust from those around you, you also help your own self-esteem and credit score.
5. Learn to manage money before it manages you.
It’s more important to wisely manage your money than to earn a great amount of money. If you understand this, you will control you biggest wealth building tool – Your Income.
6. Learn self-discipline and self-restraint in money matters.
Such conduct can be more important than courses in accounting. Don’t give into impulse buying or the marketing tactics, where you trade self-discipline and well being for what you want right now.
7. Use a budget.
Avoid finance charges except for homes, education, and other vital investments. Buy consumer durables with cash. Avoid installment credit and be careful with your use of credit cards. They are principally for convenience and should not be used carelessly or recklessly. Buy used items until you have saved sufficient money to purchase quality new items. Save and invest a specific percent of your income. Learn the principle of service by donating to the Church or Charity of your choice, and meet your financial obligations promptly. You know you should use a budget, so what’s stopping you?
8. Turn your Car into a financial university:
Over a year’s time, the average person spends a great amount of time in their car. Why not listen to audio presentations that will teach and motivate you to reach your financial goals?
9. Work toward home ownership.
This qualifies as an investment, not consumption. Buy the type of home your income will support. Improve the home and beautify the landscape all the time you occupy the premises so that if you do sell it, you can use the capital gain to get a better home.
10. Appropriately involve yourself in an insurance program.
It is most important to have sufficient medical and adequate life insurance. Life WILL throw you curve balls. Don’t try to get by without adequate, health, home and auto insurance.
11. Strive to understand and cope with existing inflation.
Learn to see through the money illusion and recognize the real value of money. Most wage earners today have less purchasing power than they did [a few years ago]. To some degree inflation is probably going to be with us for a long time. Realize that you are living in a new era of higher prices and less abundant energy.
12. Appropriately involve yourself in an emergency preparedness program.
Create a financial reserve to be ready in the case that you lose your job or experience other unforeseen hardships. Store an adequate food, water, and fuel supply. Accumulate your basic supplies in a systematic and an orderly way. Avoid going into debt for these purposes.