Although I have long since forgotten much of the information I learned during my early educational years, kindergarten is the exception.
I can honestly say that there are lessons many people learn in kindergarten that, if followed, will help you make wise decisions about your money for the rest of your life.
Below are 5 of those lessons.
Many of them aren’t directly related to money, but as you’ll see, these general principles easily carry over to the realm of personal finance and can help you be successful when it comes to making wise decisions about your money.
So, let’s get started…
1. There’s no such thing as a free lunch
If there’s something we all learned early in life, it’s that nothing in life is free.
Nowhere is this truer than in the world of investing. When investing your money, higher expected investment returns typically come with higher expected risk and lower expected investment returns typically come with lower expected risks.
If someone tries to promise you that an investment has a high return with little to no risk, then either they don’t understand the relationship between risk and return or they are lying through their teeth.
Either way, you need to turn around and run the other direction.
2. Look both ways before you cross the street
You wouldn’t cross the street before looking both ways to see whether or not there was a car coming, so why do you spend, save, give or invest your money without taking a look “both ways” before you take that first step?
We try to rationalize this irresponsible approach to financial decisions by telling ourselves things like…
- “It just feels like the right decision.”
- “I wasn’t wrong, just unlucky.”
- “I don’t have time to think about this.”
- “This time it’s different.”
No matter how much we try though, these rationalizations don’t change the facts. If you cross the street without looking both ways, you might get hit by a car.
And if you make financial decisions without “looking both ways,” you might not “die,” but you’ll end up in the “hospital” more often than not.
3. Listen to the teacher (and don’t be afraid to ask questions!)
In kindergarten, we thought the teacher was so smart.
Now that we’re adults though, many of us are skeptical of advice, even from professionals, particularly when it comes to our money.
A better alternative to this attitude is to “…test everything and hold fast to what is good.”
A good financial advisor will have the heart of a teacher or coach. They will come alongside you to help you make wise decisions about your money and if you have questions about anything, don’t be afraid to ask. They should be able to answer them in a clear and easy to understand way.
If your financial advisor can’t do this, then find an advisor who can.
4. Naptime is important
In our electronic saturated, interconnected, sleep-deprived world, many of us need to relearn the virtue of rest. While this isn’t directly related to money, it’s an important principle nonetheless.
One of the most common responses you’ll hear when you ask someone, “How have you been?” is typically something like, “Busy!”
If we’re not careful, we can easily find ourselves watching television, eating dinner, talking to our spouse, and scanning through one of our social media newsfeeds via our smartphone, all at the same time. Worse yet, we think this is what a “relaxing” experience looks like.
Extreme multitasking does not a restful experience make.
This doesn’t necessarily mean the solution to our problem should be to ditch our devices and “Go Amish or Go Home.” But it certainly means we could learn a few things from our horse and buggy friends on living a simpler life.
For example, maybe you’re on vacation, but you absolutely have to check your work email. That’s OK, but check it once a day and leave your phone in the hotel room the rest of the time.
You’ll return to work much more rested and without that unpleasant feeling of needing a vacation from your vacation.
5. Learn to share and give
You don’t have to teach a child to be selfish. Anyone who has kids knows this to be true. They (we!) are born that way.
Instead, you have to teach them to share.
Unfortunately, apart from a significant heart change, we tend to revert to these selfish behaviors throughout our entire life, especially in relation to our money with thoughts like…
- “I’ve worked hard for this, I deserve it.”
- “It’s my money; I can do whatever I want.”
- “I give my time, isn’t that enough?”
These thoughts typically stem from a lack of understanding of who the true owner of our money really is. As I’ve written about before, we aren’t really the owners, just stewards.
And one of the best ways to remind us of this fact is the act of giving.
In America, we live in the the richest nation to have ever walked planet earth. Most of us have clothes on our backs, food in our stomachs, a roof over our heads, indoor plumbing, and a mode of transportation (even if it’s public transportation) to get us from where we’re at now to where we want to go.
Some people might not think of those everyday things as luxuries, but the reality is that if you make more than approximately $32,000 a year, you are in the top 1% of the richest people in the world according to these numbers.
That’s a pretty humbling statistic.
If you want to learn what it means to really live, you have to learn what it means to really give.
The wheels on the bus go ’round and ’round
There’s a book that’s been around for almost 30 years with the following title: All I Really Need to Know I Learned in Kindergarten.
Now, I don’t necessarily believe that “all” we need to know about money (or life) we learned in kindergarten, but it does make you think about how important those early years of education are in a person’s life.
And what I’ve learned so far is that when it comes to making wise decisions about your money, kindergarten can be a pretty good place to start.
What about you? Do you have any money lessons you learned at an early age?
If so, feel free to leave a comment below or email me and let me know what you think!