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20 Must Know Money Lessons to Memorize

Money habits shape the way people live and plan for the future. Knowing the right money lessons can make the difference between just getting by and reaching real financial freedom.

These 20 money lessons cover the basics everyone should know to build wealth, manage money smarter, and avoid common financial pitfalls. Start learning these tips today to take control of your financial journey and set yourself up for success.

Why This Is So Important

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Being smart with money helps one reach financial independence. Knowing key money lessons can keep you debt-free and help you make better choices with cash.

It is like having the little whisper on your shoulder helping you to make the right financial decisions.

Spend Less Than You Earn

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Keep your spending in check and live below your means. This simple rule is the first step toward proper money management and a strong financial future.

To learn more: How to Live Below Your Means and Love Life

Save Before You Spend

The photo of a man's hand saving a dollar bill on a piggy bank refers to saving before you spend helps create a safety net for unexpected expenses.
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Always put some money aside before thinking about spending. This habit builds savings, creating a safety net for unexpected expenses.

Start with saving 10% of your income. Add an additional one (or more) percent with each pay increase or each year.

Learn More: 10 Mini Savings Challenges to Explore & Save More Money

Track Every Expense

The picture of dollar bills and papers with a note indicating to track every expense that helps find where money leaks and easier to stick to a budget and save more.
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Keep a close eye on every dollar. Tracking expenses helps find where money leaks, so it’s easier to stick to a budget and save more.

If you are a beginner, this is of utmost importance. If as a seasoned budgeter, you should deep dive every couple of months – just in case.

To learn more: Top Budgeting Tips from a Money Expert

Build an Emergency Fund

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Start saving for a rainy day to cover unexpected costs without going into debt. An emergency fund is your financial shield against the unknown.

The goal is never to need an emergency fund, but if you do you know you have money set aside.

To learn more: Emergency Fund – Everything You Need to Know

Avoid Unnecessary Debt

The image shows a laptop and a man looking frustrated while holding papers which means to avoid unnecessary debt to keep more money in his pocket.
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Don’t borrow for things you don’t need. This is one of the worst practices that is “common” in our society.

Ignore debt as an option for payment. Plus it will help to protect your credit score and keep more money in your pocket.

To learn more: 7 Simplistic Habits Needed for Debt Free Living

Invest Early and Often

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The sooner you invest, the more your money can grow. Regular investments, even small ones, can build wealth over time.

Start with $50 and add money when you get paid. Watch your investments grow with a simple ETF that tracks the S&P.

To learn more: Learn How to Invest for Beginners to Make Money

Diversify Your Investments

The image shows dollar bills with a rising arrow which means that diversifying your investments helps lower risk and increases chances for steady growth over time.
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You have heard the saying, “Don’t put all of your eggs in one basket,” right? This is wise wisdom.

Spread your money across different investments. If you enjoy real estate, look at different markets or types of housing. If you buy stocks, invest across various industries. This helps lower risk and increases chances for steady growth over time.

Understand Compound Interest

The image shows a clock and stock coins which indicates to understanding compound interest so it can turn small savings into big gains.
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Learn how compound interest works in your favor. It can turn small savings into big gains, making your money work for you.

Small compounding adds up quickly over the years. So, start now and you can enjoy the fruits.

To learn more: How Much to Save Monthly – Your Savings Percentage

Prioritize Needs Over Wants

The image shows product displays at the store, a cart filled with items, and a girl picking an item which means prioritizing needs over wants to keep budget balanced and helps avoid unnecessary financial stress.
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Focus on spending for needs before wants. Yep, this sounds simple. But, have you ever divided your money into piles of needs and wants?

Go through your most shopped stores and see how much was truly a need. This keeps your budget balanced and helps avoid unnecessary financial stress.

To learn more: Smart Budgeting: Never Exceed Your Budget Limits Again!

Create and Follow a Budget

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Make a plan for your money and stick to it. Once again, something you have heard- get a budget. Have you done it?

A budget gives you control and helps you achieve your financial goals. Yes, this means less stress with money.

To learn more: How to Budget Money on Low Income: 20+ Tips to Cut Spending

Pay Bills on Time

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Always pay your bills when they’re due. It keeps you from late fees and helps build a strong credit history.

Even better… set your bills on automatic payment.

To learn more: 5 Effective Bill Calendar Strategies That Boost Your Finances

Monitor Your Credit Score

The picture tells about a laptop, coffee, and a man's hand holding a phone with a screen display which means to monitor your credit score to spot errors and improve it over time.
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Keep track of your credit score to spot errors and improve it over time. A good score opens doors to better financial options.

To learn more: 15 Brilliant Ways to Increase Your Credit Score This Month

Plan for Retirement

The images of a calculator, magnifying glass, and a paper with notes refer to a plan for retirement for a comfortable future.
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Start planning now for the years ahead. The earlier you plan, the more comfortable your retirement can be.

With each paycheck, set aside at least enough to get the employer’s match. Then, add how much you contribute with each pay raise.

To learn more: The Real Reason You Don’t Save for Retirement

Limit Credit Card Use

The picture shows a swiping machine and a girl's hand holding a credit card and tapping to it indicating to limit credit card use to avoid high-interest debt.
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Use credit cards wisely to avoid high-interest debt. Just because you can charge something, doesn’t mean that you should.

Think twice before swiping or tapping. It’s a key to staying debt-free and financially independent.

To learn more: 15 Most Effective Credit Card Hacks and Rewards

Shop Smart and Compare Prices

The photo shows items displayed at the store and a man picking two items which means to shop smart and compare prices that help save money and make every dollar count.
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Before you buy, compare prices and look for deals. This helps save money and makes every dollar count.

To learn more: Are You a Thrifty Person?

Set Clear Financial Goals

The photo of a jar filled with coins with notes refers to setting clear financial goals to help you plan and stay on track financially.
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Have clear goals for where you want your money to take you. Knowing your goals helps you plan and stay on track financially.

This may seem simple, but it will affect where you spend your time and energy.

To learn more: 10 Smart Financial Goals That You Need

Review Financial Plans Regularly

The photo shows a pen and notebook with notes which means reviewing financial plans regularly that helps to adjust when needed and keeps your goals within reach.
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Take time to review your financial plans often. It helps to adjust when needed and keeps your goals within reach.

This is something good to do yearly or when a major life event happens.

Automate Savings

The picture shows bank books with dollar bills inside indicating that automating savings is an easy way to build a habit of saving.
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Set up automatic transfers to savings. It’s an easy way to build a habit of saving without having to think about it.

On the 1st and 15th of the month, transfer money to savings. Or for each paycheck.

Understand Financial Terminology

The picture shows a laptop used for search, papers with graphs, pen, cons, dollar bills, and a man's hand using a calculator which refers to understanding financial terminology that helps you make smart decisions and manage money.
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Learn the basic terms used in finance. It helps you make smart decisions and feel more confident managing money.

Remember, we all had to start as a novice and learn from our own starting point.

To learn more: 10 Money Bliss Steps to Financial Freedom

Seek Professional Advice When Needed

The picture tells about the two people facing each other while having a conversation which means seeking professional advice when needed to prevent costly mistakes and guide you towards your goals.
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Don’t hesitate to ask a financial expert for help. A little advice can prevent costly mistakes and guide you toward your goals.

Try to find a finance expert who charges by the hour (fee-based) rather than assets under management. When you need help, ask for it.

Stay Focused with these Money Lessons

The image shows a coffee and a man's hand holding dollar bills while using a laptop to research which refers to staying focused on these money lessons and becoming financially strong.
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Keep these money tips in mind and use them every day. They help you become financially strong, wise with money, and ready for anything.

You can even download a list of money lessons as a constant reminder.

To learn more: Important Money Lessons You Must Master to Find Success and Build Wealth

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