9 Money Rules Your Parents Should Have Taught You

by Rey Sagar

According to Ken Eyler, certified public accountant and CEO of Aquilance, where he said, Parents shouldn’t wait until their kids are old enough to have an allowance before teaching them about money.

Fortunately, it’s never too late to grab the bull by the horns and become a master of your financial destiny. 

And In this article, I am going to talk about some of the most important money lessons your parents should have taught you at a very early age in your life.

Understanding these money lessons can move you beyond living paycheck to paycheck into much better financial stability.

My simple advice, which I try to follow almost all the time is,

Always live below your means. ALWAYS. which makes sense a lot.

Now, let’s talk about, rule number one: which is 

1. Importance of saving

I know I know, we can’t get rich by saving, which I totally agree, 


But saving could be crucial for some situations because there are always life circumstances where you need some extra reserve of cash for something. we don’t know what is coming down the road.

This is arguably the most important thing you can do for the health of your financial future is to start saving, whether it’s normal or for your retirement, regardless of where you are in life right now. 

This is something you can ideally do over the course of your entire career, but the sooner you start, the better.

Set up a 401(k) plan with your employer. Hopefully, the company will match at least a percentage of your contributions. According to CNBC 33.1 trillion dollars, that’s how much Americans have saved up for retirement as of September 2020. Which is about six and a half trillion that is held in 401k accounts representing nearly one-fifth of the u.s retirement market.

On the other side saving tactic that you can do is,

Let’s say, if you encourage your child to give monetary gifts that can go toward larger goals or experiences to teach the idea of savings targets. This is basically the repetition of getting them into that mindset of

Where they say ‘This is my birthday money or whatever, and instead of spending it, they will say ‘I’m saving it for my first car or for buying that iPhone, or whatever.

The one thing that parents can do is have a rule about how we were allowed to spend their money.

For example – “If I got $100, 

  • I could spend a third of it, 
  • I had to save a third of it and 
  • I had to find a third of it to do something productive with it”. 

This rule is simple but very effective on mindset, I just can’t spend everything I had on one thing.

Let’s talk about the 2nd rule which is basically essential for everyone, which is

2. General knowledge of taxes

I think taxes are very important because we got so many deductions for so many things, obviously depending on the country’s rules and regulations.

There is a saying – 

“The best things in life are free, but sooner or later the government will find a way to tax them.”

Children should have a general understanding of taxes. This goes from understanding why It’s taken out of a paycheck to why It’s added to the final price of something you buy at the local store.

“The reality is every person in society pays taxes for almost everything,” Sometimes children were like, ‘Wait, what’s that?’ why they are talking extra money? when they bought things for themselves and suddenly a $10 purchase was close to $11 or something?

Parents should make sure their children understand why taxes are deducted for things like everyday stuff to Social Security and Medicare. Helping children learn about taxes when they are young can help them avoid any unpleasant surprises once they start earning their own, this way, they are more likely to be aware of these things very early.

Now, let’s hit into the 3rd one, which is 


3. Paying yourself first

This is something, which is very important for all ages & we should always pay ourselves first, especially if we are working as self-employed. 

That means you should automatically reserve a part of each paycheck for savings before you spend it somewhere else. This is one of the best ways to make sure that you are saving money.

And yeah, If you are doing business then this is a no-brainer, Mike explains about taking a profit before doing anything else in his profit-first book and I highly recommend reading it, especially if you are handling some kind of business. great book.

now let’s talk about the 4th rule which is

4. Do not buy stuff to impress people. 

Most of the time we used to spend a lot of money on clothes, accessories, travel, and other unnecessary stuff in the house. yeah, we should spend enough money on food and education, which is a much better side of investments.

for example, we should never buy a brand-new car, well, a bunch of people wish to buy a cool Lamborgini, which is fine if you’re very rich, otherwise, it’s a much better decision to avoid ever buying a brand-new car. 

The reason? 

Of course, More expenses, Also automobiles depreciate very quickly and steeply, meaning they’re not a good investment. If you try to sell the vehicle a few years later, you’re going to get much less than you paid.

which seems not to be a good financial decision.

Instead, you can purchase cars that have been leased for the first 2 or 3 years of their life and you can then basically reap the benefits of a car knowing the previous owner took the depreciation hit.

Now let’s jump into the no 5, which is

5. Debt and Credit Impact

The importance of good credit, especially because this isn’t a concept taught in schools, sadly.

Learning about the importance of paying bills on time, and the importance of not overextending themselves too much is a great way to manage extra loss in the future.

Greg Hammer, president of Hammer Financial Group, suggested starting with a low-limit credit card to give kids the experience of using it. 

Then parents can start to explain the differences in the types of debt: 

  • Good debt, such as debt used to increase equity, like buying a house; and
  • Bad debt, from overspending on unnecessary items put on credit cards.

Many students in college will receive credit card offers, so teaching these lessons while kids are still at home could keep them from going into debt later. 

Also, it may be worthwhile to discuss parents’ own negative experiences with credit card debt as a warning tale.

A recent study published by the National Bureau of Economic Research found that parents’ attitudes toward debt can significantly influence how children think about and approach borrowing money as adults. 

For example, parents who worry about debt or show discomfort about it tend to have children with similarly cautious views. Children who grew up in homes that are more comfortable with debt, by contrast, may be more open to borrowing it.

Which is 99% not a good sign.

Now let’s talk about something which pays you forever. which is

6. Importance of Investing

This is literally, one of the ways to make money while you sleep, as warren buffet says, one of the greatest investors of all time –

 “If you don’t find a way to make money while you sleep, you will work until you die.”

Find ways to create passive income, which is basically, your money works to make more money without you having to work hard to earn it. Investing is one of the most popular ways to make passive income, as your money does the work for you most of the time.

And you don’t necessarily have to put in the work so much after you set up the investment portfolio as we can spend on S&P 500 index fund which is 500 large companies listed on stock exchanges in the United States, It is one of the most commonly followed equity indices so far.

You can also generate passive income from a rental property or collect ad revenue from the content that you create, like this one.

It’s not fully passive but it will obviously pay longer & if you want to know more about other passive income ideas you can check out my website where I wrote 7 passive income ideas that you can do online.

Now, let’s jump into my favorite number, which is


7. Spend less than you earn

This is a very simple and obvious tip that your parents should have taught you: Don’t spend more than you make.

In a society where there’s always the latest and greatest item to buy, it can be easy to surrender ourselves to the overspending habit. 

Advertising, celebrity sponsorships, and fashion trends can directly affect your children’s financial decisions. This is why teaching kids about money is so essential.

Reinforcing the lessons of the value of money, what those dollars mean, and how they’re earned can help children understand the differences between necessities and luxuries.

One way to reinforce those lessons is to expose children to the different financial realities of people not in their social groups.

Using an example Greg Hammer’s life, Where he described how during the holiday season his church supports families in need. Hammer’s children will shop for other kids, often using their own money to buy gifts. 

It’s a chance to explain that access to luxury items is not an entitlement and that not everyone can afford to buy the latest and greatest electronic gadget or take expensive trips.

When it comes to teaching kids about money, the combination of leading by example and explicitly explaining why it’s important to save, have good credit, and be mindful of spending can help children make informed financial decisions as they grow up.

By pointing that there you go no 8, which is

8. Be wary of loans & tracking expenses

Borrowing money means you’ll gonna have to pay it back somewhere down the road right? 

So it’s better you plan for your debt that accounts for that. that’s not by any means you shouldn’t take any debt, even some of the most successful people of eath take debt to cut down taxes or settle down big purchases, but that’s a different story.

Yeah, for normal people some loans may be necessary — such as student loans or a mortgage. But be very smart about how you borrow.

If you talk about tracking expenses, it’s more about being aware of where our money is going.

I do personally track my every single expense and it will give me a brief summary of where I’m spending my money and where to fix it, if I am spending too much.

Side note: I use Money Manager for my everyday expenses. Great app and It’s totally free. you just have to deal with some little ads here and there, other than that it’s pretty much does everything you need to track your expenses.

So letting, your children do these type of exercises help them be aware of their financial life.

and lastly, 

9. Diversify your revenue stream

As cliche as it may sound, don’t put all of your eggs in one basket. 

Yes, you want a full-time job with benefits, PTO, or a shiny 401(k). That’s fine.

But a side hustle is also a good idea. That way, if you lose your job for any reason like Elon cut off the job of so many Twitter employees after he bought the company, you have something to fall back on.

You can diversify your revenue stream by doing many things, like creating a YouTube channel, affiliate marketing, doing some contract writing on weekends, writing a blog, flipping a house, and many more.


In Summary

Parents have a lot on their plates, which is why they might not able to teach you these lessons about how to plan your financial future.

But Wait !!

It’s never too late to start saving money and building wealth, anybody can do that if they put in the work, which can help you to live a much better life financially

If you wake up and realize you aren’t happy with your life. 


Don’t wait. Change it today.

Lastly, I love to hear from all of you who are reading this article! 

What are the top things you wish your parents should have taught you about money? I highly recommend spending some time reflecting on these rules to teach your kids the importance of financial lessons one day.

By doing that you and I can prevent the topic of money from still being taboo in our society decades from now!

Which causes most of the miseries in the rest of our lives.

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