Money management – not only for teenagers

I wonder what happened with financial education. Children can use the most sophisticated calculators and understand complex mathematical formulas, but when they become adults they do not have a clue about basic principles of managing money. The FQ (financial intelligence) is generally much lower than IQ and EQ…

How come? Could it be that the available message about money management is quite cryptic and difficult to understand for a normal person? When confronted with the reality one can be confused…

  • In Europe politicians are happy when countries are losing each year about 3% of money, so why not me?
  • Bankrupt countries are getting by, so why not me?
  • Banks are being supported by tax payers, so why not me?
  • The debt of some countries is so huge it is impossible to comprehend, so why not my debt?

I can go on and on…

The point is that basic principles of managing money are not “highly popular”.

So to be unpopular, here are the top 7 principles about managing money from my personal experience:

  • Don’t spend more than you earn…
  • Don’t borrow money you can’t pay back…
  • Don’t lend money you need yourself…
  • Don’t lend money unless you are also prepare to give it away…
  • Don’t invest money you can’t miss…
  • Don’t invest in ventures you do not understand, unless you can afford the risk of losing it…
  • Don’t trust people who are not using the financial product they propose to you and are not willing to show how much they earned by using it…