12 Personal Finance Tips You Should Know

Many aspects of personal finance aren't intuitive, but have to be learned. Ideally, children should start learning the simplest basics of personal finance from the time they're preschoolers. But learning about finance is something that should never stop. Financial options and financial realities change, and managing money well depends on staying abreast of changes in financial options. Here are 12 personal finance tips for a lifetime of smart financial management.

Personal Finance Tips For Kids

1. Sometimes You Must Wait to Buy What You Want

Even adults have difficulty with this one sometimes. But children from pre-kindergarten age can understand that sometimes you have to save your money so you'll have enough to buy something you really want.

2. When You Spend Money It's Gone

The fact that money is finite is important, and can be grasped by elementary school-age children. Children in elementary school can also understand dividing money for saving, spending, and sharing, and the basics of financial goal setting.

3. Compound Interest Helps Money Grow

Middle school aged children can grasp the basics of compound interest. There are a number of compound interest calculators online your child can use to see how compounding helps savings grow.

Personal Finance Tips for Adults of All Ages

4. Paying Off Your Credit Card Balance Each Month Is Ideal

Many young adults learn all too quickly how easy it is to slip into credit card debt. It's smart to start with a credit card with a low credit limit and get into the habit of paying it off every month, to build a positive credit history without taking on excessive debt.

5. A Budget Is the Key to Financial Security

As the most basic tool for taking control of finances, a budget helps ensure your money does what you want it to. It also helps you learn where you're overspending and how to prioritize spending better. Free online apps like Mint make it easy to create a personal budget.

Next step: Sign up for Mint and learn to make the most of your personal finances.

6. Debt Prevents You From Building Real Wealth

Revolving debt (like credit card debt) ensures that you pay more for things than if you were to pay cash. And reward credit cards don't help you unless you pay your balance off every month. If you get to where your mortgage is your only debt, you're leagues ahead of most people in terms of wealth building.

7. An Emergency Fund Is Critical

Having money set aside that you can access easily in emergencies saves you plenty of financial headaches. Once you have three to six months' worth of living expenses saved, you can put the money you had been adding to your emergency account toward building wealth.

Personal Finance Tips for Investing

8. Be Patient and Invest for the Long Term

This is a fundamental part of Warren Buffett's investing strategy, and he ought to know. Portfolios need to be modified occasionally, but avoiding panic over short-term volatility generally wins out over trying to predict the market.

9. Borrow Wisely

You shouldn't borrow without objectively assessing future cash flow and other needs. You should always have a solid payback plan to avoid becoming a slave to debt. Additionally, you can sometimes negotiate interest rates, particularly if you have good credit.

10. Don't Let Greed Keep You From Analyzing Risk

If you don't analyze and understand risk when investing, you're really just gambling, and the house always wins in the end. Asking for help from a certified financial planner is a smart way to learn about risk and how much is reasonable for your financial situation.

Personal Finance Tips for Retired People

11. Don't Make Major Changes Right Away

There's no deadline, and if you rush into selling your home or moving to a sunny climate, you could "act in haste and repent at leisure."

12. Consider Your Legacy

While most people want to leave something to their children and grandchildren, the top priority now is your own financial needs and those of your partner. Working with a financial planner with experience advising retirees can help you prioritize and ensure financial security while still leaving a legacy.

Personal finance isn't something you learn once. It's a set of skills you can build from an early age throughout your life. You should never feel as if you know everything there is to know about personal finance, but should strive to understand financial choices that relate to your age, income, and situation in life. Personal finance apps like Mint are great for helping you create a personal budget and track your expenses, debts, investments, and financial goals, and for adapting them to changing life circumstances.

Next step: Sign up for Mint and learn to make the most of your personal finances.