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Good financial practices and habits don’t just happen naturally. You have to learn them. The best way to do this is by approaching them like your job with determination and focus. You can’t use the excuse that you were never taught about personal finances or that your parents set bad examples. There is a multitude of websites and books on money management you could read to teach yourself about personal finances. It’s just not that tough.
7. Teach your children about personal finances
No matter how you’ve handled money in the past, you owe it to your children to take the steps necessary to teach them about personal finances, especially about delayed gratification and the importance of saving money. If your schools are like ours you can’t count on them to teach your children about personal finances, as this just isn’t on their curriculums. So you’ll have to make sure you do the job. You wouldn’t let your children grow up without knowing how to ride a bike and you shouldn’t let them grow up without knowing the basics of personal finance.
8. Learn what to do if you get into serious debt
Naturally, the best thing is to not get into serious debt. But if you do it’s important to learn how to deal with it. The most popular alternatives are a debt consolidation loan, snowballing your debts, debt settlement, and consumer counseling. While a debt consolidation loan is fairly self-explanatory, you may not know about the strategy called a debt snowball. This is where you order your debts from the one with the smallest balance down to the one with the largest. Step two is to put all of your efforts into paying off the debt with the smallest balance, while continuing to make the minimum payments on your other debts. When you get that first debt paid off – which should be fairly quick – you then use the new money you now have available to begin paying off your second smallest debt etc. This strategy was developed by the financial guru, Dave Ramsey and here’s Dave explaining more about it himself.