Personal Finance

Money Lessons I have Learnt The Hard Way

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coins scattered on the table

Money lessons are one of the most important lessons anyone needs today. Money is a commodity that can be very hard to master. It is a measure of output and a reward for work done.

We spend our lifetimes searching for it and yet many of us never understand the rules of the “money game”. In a world divided between the rich and the poor, it goes a long way to show that a big part of our lives is all about money.

The ability to live a quality life is arguably directly proportional to the amount of money you have. This makes it important to understand how money works if you want to have an impactful and happy life.

A key point to note is that mastering the rules of money is not as easy as it sounds. It requires great sacrifice on your part, hard work, and discipline to accomplish the goals you will set.

Today I want to share some of the money lessons that I have learned the hard way. Some of these money lessons include some mistakes I have made in the past that have made me lose great opportunities.

1. There is no such thing as quick or easy money

a man with a laptop looking frustrated

I know there are a lot of people on the internet today telling people to do stuff and they will earn some amount of money in a month, in a week, heck some even promise a day!!

Please do not fall for these get-rich-quick schemes. It took me a long time before I realized that money is actually a reward. It is a payment for long hours and huge amounts of effort spent working on something.

hands holding hundred dollar bills

After losing money in get-rich-quick schemes that later turned to be Ponzi schemes, it dawned on me there is no shortcut to making money.

The internet is full of scammers and fake gurus who are always trying to sell something that is not even going to be beneficial to you.

Over the years, I have stopped participating in all schemes that promise quick and huge returns and concentrated on perfecting my trade and things that actually benefit me.

I actually went back to the drawing board and actually did my own research on what works and what doesn’t. I also doubled my efforts in all that I do and this has resulted in the exponential growth of myself and has also resulted in handsome rewards.

2. Start investing early

a man typing on his laptop

A lot of young people think that investing should come later when they have probably saved enough money. This should not be the case. Investing is a surefire way to master the game of money.

Creating massive wealth takes time hence the need to start investing as early as possible. This allows you to take advantage of the compounding principle.

This principle involves the perpetual growth of your money by always reinvesting your funds and profits until it gets substantial. It took me a lot of time before I realized this golden rule of money.

stack of dollar bills

People who started investing earlier have grown their wealth multiple times. Investing sooner rather than later will also give you time to assess upcoming opportunities and also give you room to make mistakes.

When investing, mistakes are inevitable but making them early allows time for proper adjustments. Experiences learned early enough go a long way in ensuring a successful investment journey.

Start investing as soon as you can.

2. Stop Impulse Buying
I think almost everyone is guilty of having bought something on impulse.

woman with shopping bags looking happy

Impulse buying is quite a destructive financial decision. It also indicates a lack of proper planning and discipline.

Buying things that we do not need ends up messing with our cash flow and in most cases plunging us into debt.

a frustrated woman head bowed over her laptop

Since I realized this, I have always prepared a shopping list beforehand. Having a shopping list ensures that you budget appropriately and also ensures that you stick to buying what you need.

Check out this article I prepared of some very useful money apps that you can use to help you budget. I also ensure that I use my credit card when doing online payments.

Credit cards can be an absolute lifesaver when used well. See this article here on what mistakes to avoid when using a credit card.

credit cards

Controlling my impulses has gone a long way in ensuring I have some extra money for investment.

3. Taking planned loans
An increase in the number of financial institutions and technology has actually led to increased chances and reduced bureaucracies of getting loans.

This convenience has created temptations that have led to some of us taking loans carelessly even when there is no need.

Taking a loan without a plan leads to misuse of funds or the facility advanced, which later becoming costly while paying back. Debt can be good if there is a necessity.

Necessities include but are not limited to investments and emergencies. Every day, financial institutions are offering their credit cards and mobile loans and more people are falling into the trap.

a woman looking at a laptop in disbelief

You should always understand the terms and conditions before you commit to any loan or facility contract. Understanding the terms and conditions will allow you to choose a favorable service provider that will cater to your needs without making you feel overwhelmed with the responsibility.

All loans should be planned to reduce the temptation and cost of misuse.

4. Do Not Spend More Than You Earn
This is a good lesson that can help us to live within our means. The amount of our income should determine our expenditure.

This helps in planning the amount of rent to pay, type of car to have, food to eat and the schools to take our children. Ideally, spending should be lower than the income we earn to leave room for savings.

Not following this rule means that we will always not have enough money when we get our income and that will consequently lead to borrowing.

picture of a couple arguing over unpaid bills

Not spending more than you earn helps in creating discipline when we are spending. Spending less than the income ensures there is more money for investment and one is covered in case emergencies arise.

These are some of the lessons that I have learned. Through implementing them, my financial position is ideal for me currently.

What money lessons have you learned so far? Which ones are hard for you to implement? Let me know in the comments below.


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