Someone along the path of our lives taught us how to save money. Maybe it was wise words imparted by a parent or grandparent. Maybe the person that taught you was a knowledgeable teacher in highschool or college. Perhaps you are one of those people that never had the benefit of guidance and you taught yourself how to save money. Passing on financial wisdom is one of the most unique responsibilities and receiving financial guidance from a trusted leader is an extraordinary gift. Stewardship of money is a skill that will mean the difference between struggling to make it through retirement and leaving behind a financial legacy for your loved ones. Why do so many struggle with having enough cash in the bank to live on? Perhaps we should examine the ways we learn to save money to understand.

Where Do We Learn To Save Money?

There are a number of people that have been responsible for teaching the majority of Americans how to save and spend. Some systems work and some don’t work at all. Sometimes examining the roots of our financial education will help us recognize previous financial legacies and help us formulate a plan for the new financial future.

School Programs

Some people have had the benefit of high school classes that taught them the importance of saving and sound financial practices, but the system doesn’t seem to concentrate on financial solvency and independence anymore. Personal finance math is usually relegated to a week long unit, instead of an in-depth class, despite the fact that many people don’t use a lot of the high math concepts they learned in school ever again. Yet, they perform financial math everyday to save money.

Some of us were lucky enough to get any sort of financial education in college, when we have finally been given the reins for our own life. Do you see the problem with that? How are we supposed to make sound financial decisions without adequate training until we are supposed to be in charge?

Any sort of school program is sure to be a cookie cutter financial plan unless you get lucky. They go like this:

  • Go to college (on student loans)
  • Get a good job (so you can keep paying debt)
  • Buy a house and start a family (still paying debt)
  • Build your 401k and save money(don’t worry about the market volatility)
  • Diversify your investments (because the qualified plan isn’t growing enough)
  • Retire (possibly still in debt and you better hope your money lasts)

Some people thrive on this plan and good for them! Doesn’t it feel a little systemic? How can we surpass the massive debt cycle and truly feel financially free?

Radio/ TV Finance Personalities

There is something amazing about an incredibly wealthy and successful person that developed a working financial system to help people save money, especially when they are willing to share it with people in need of a financial solution. You know the main hitters in this dug-out. The problems with the plans these people use are:

  • They are a product. Often times, any financial advice that mega-personalities sell are product packages. They want to see you financially independent…as long as you use their system for success.
  • They are sponsored. As much as financial pundits try to convince you that one program works more than another, it can be remarkable how insistent they get. This is simply because they are often sponsored or incentivised to promote certain things. Believing and making a profit aren’t a bad thing. Giving financial advice that is not transparent is.
  • They often rely on the market. If you have been paying attention, you know that right now the stock market has been extremely volatile. We have written extensively on the subject. This is not a comfortable time to be a stock investor. And if you want to point to the growth of the market over the last few years, consider that the standard time between recessions is just 4 years, not a decade. All the warning signs for another recession are percolating just below the surface. Why would you rely on conventional wisdom if it puts your money at risk?

Family Legacy

This is the most complex way in which many people learn their financial wisdom and habits by far. Much like they teach us to ride a bike or tie our shoes, family members are often where we get our first lessons on how to save money and spend money. Maybe it’s direct lessons or by example, but we learn from family on how to use money. Sometimes that teaches responsible spending and sometimes it makes us thrifty. Some people don’t have good models for financial success at all and they either teach themselves how to use money or they join the millions of Americans living paycheck to paycheck.

The Factum Financial team believes in preserving the legacy of the people that we interact with. Stewardship of money is one of the most important skills that our wealth strategists teach. Sometimes, in order to be good stewards of money and to solidify our legacy, we have to defy the systems we have been taught for financial health.

Thinking Differently

The person’s system that you should be applying to your finances only comes down to you. In other words, your plan is something that only you can determine and you need to take ownership of it. Taking valid advice from family, teachers, friends, and entertainers isn’t a terrible idea, but your financial future is your own and will affect those that depend on you. Therefore, the decision that you need to make is for you.

At Factum Financial, we believe in giving you the keys to your financial future. We teach sound financial principles that use time-tested methods to grow and protect wealth. There can be a lot of dissonant noise in the financial world. If you’re searching for a wealth solution, contact one of our wealth strategists today.

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