Basic money lessons everyone should know

Building up financial skills takes time and effort. Think of money lessons as a shortcut. The more you know about what has worked for others, the better you can structure your own plans to help you meet your goals.
These are six money lessons we think anyone of any age should know.
1. Spend Less Than You Make
This is one of the easiest money lessons to write down, but it might be one of the hardest to accomplish. To achieve financial independence, you can’t spend every dime you make. But somewhere between half and three-quarters of people live pay check to pay check. If you’re one of them, saving up for a big goal like retirement can seem impossible. Cut back on major expenses when you can, or look for ways to make more if you can’t. But no matter what, find ways to spend less money than you take home.
2. Create SMART Financial Goals.
This is the year you’ll save more, you tell yourself. Or starting next week, you’ll spend a lot less. Sticking to these ideas is tough. Making SMART goals can help. SMART goals are often used in the business world. Executives are told that their resolutions should be:
• Specific
• Measurable
• Achievable
• Relevant
• Time bound
Put this same concept to work, and you could transform a resolution into a plan. For example, you could make a savings goal that reads like this:
• Specific: I want to save money so I can make a down payment on a used car.
• Measurable: I want to save 700 per week in a dedicated account.
• Achievable: I will skip eating out during the week to save that money.
• Relevant: This goal is critical because my current car is breaking down. A down payment will keep my monthly payments within a rate I can afford.
• Time bound: I will complete this goal in six months, just in time for my birthday.
Your goals might involve debt or the holidays or retirement. No matter what you’re working toward, your goal should be smart.
3. Always Pay Yourself First
Most people determine how much money they have after accounting for spending, and they use that to determine a savings goal. But setting aside income before you spend, or paying yourself first, helps you build up your savings faster. A strategy like this ensures that you’re caring for your future self as well as you care for the current version. Your savings goals will be easier to achieve with this simple shift in mind-set.
4. Create and Follow a Budget

Understanding how to track income and expenses is one of life’s critical money lessons. With a budget, you have a solid foundation for planning. But the best budget in the world won’t help you if you don’t follow it. At least once per month, sit down and determine:
• Your income. How much do you have now? How much is coming within the next four weeks?
• Your expenses. How much do you owe right now? What other bills and expenditures do you expect?
• Your goals. How much have you vowed to set aside for savings? How much extra will you pay to lower your debt?
Use our tools to develop a deeper understanding of where you spend money. And log into the app every day to keep close tabs on your account balance. If your budget seems unrealistic, based on your current spending habits, adjust as needed. But when next month rolls around, use the lessons you’ve learned to create a budget you can stick with. The more frequently you work on your budget, the more the work will seem natural to you. You can create a budget directly in the Current app.
5. Think Before Spending
It’s so easy to spend money, especially if you have a fast web browser and a handy credit card. More than 88% of people have made an impulse purchase in an online shop, and they spend about 800 each time. Pause before you buy anything that isn’t listed on your budget. Ask yourself:
• Do I really need this?
• What must I give up to purchase this?
• How long must I save to buy it?
• If I charge it, how long will it take me to pay the money back?
Calm, clear questions could help you understand that the item that seems so necessary right now isn’t really required after all.
6. Save for an Emergency
Close to 30% of people have nothing set aside to cover an emergency expense. Chances are, most of us will face some kind of financial emergency at some point in life. An emergency stash helps you recover quickly without sliding into debt to do so. Your fund could be large enough to help you deal with unexpected unemployment, and a big buffer like that is ideal. But even a hundred or so, saved up over time, could be critical when a smaller problem arises.
Automation makes saving easier. Create Savings Pods and enable round-ups, for example. We’ll round up your purchases to the nearest dollar and apply them to the pod you specify. You could be saving up for a rainy day while doing things like buying groceries or new shoes for your children.
Absorb More Money Lessons
At Current, we know it isn’t always easy to learn about personal finance. Some of us didn’t grow up in households where budgets and saving were common. But we believe anyone can build a secure financial future.