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Over the past seven years, I've written more than 350 personal finance columns and thousands of blog entries. Between deadlines, I sheepishly broke my share of money rules. I spent too much on lattes (black coffees, actually), forgot to pay a credit card bill or two, and never did roll over that 401(k). But I also learned a lot. And as I leave the Star Tribune and journalism to start a new gig, I thought I'd focus this column -- by far the toughest one I'll ever write -- on seven money lessons I've learned that I hope you'll keep with you for years to come.
1. Get to know your money personality.
I like to charge everything and pay it off at the end of the month. Others operate better on a cash or debit diet. I have no problem creating a long-term investment plan, but find I'm constantly tinkering with our family's goals for the near future. I waste a lot of time to save a little cash. And a real weakness of mine is not passing up a good deal, even on items I don't need.
Take time to reflect on your financial strengths and weaknesses. By identifying and acknowledging them, you are more likely to come up with a system that will work.
2. Commit to raising financially capable kids.
You know you're a bit nutty about money when you prattle on about coupons and wants and needs to the infant in your shopping cart. But I was pleasantly surprised one day when admiring a brightly patterned dish towel to hear my toddler announce, "You don't need that." She was right. And it was the beginning of a money conversation that continues to evolve.
We need to teach young people to be financially capable adults. They face many fiscal challenges -- inheriting a bucketload of debt, affording college and coming of age in an era of slower economic growth, to name a few. Commit to financial education in school. Make a personal finance course a high school graduation requirement. We owe it to our kids.
3. Start saving early, even if you can only save a little.
Make establishing a $1,000 emergency savings fund your top priority. Then save a small amount each month. If your employer matches your investment in a 401(k), save there. If not, consider a Roth IRA. I call it "the little black dress of personal finance" because the Roth is so versatile.
4. Keeping expenses low is one path to freedom. But earning enough is key, too.
The fewer expenses you have, the more you can spend on things that matter to you -- family, hobbies, charitable causes. If your mortgage and car payment don't take up most of your paycheck, you'll have more flexibility and less stress if you experience a job loss or other financial road bump.
Being able to earn a good income is critical, too. Keep learning, but be smart about debt if you head to trade school or college and choose your path wisely. And always keep your eyes open for creative ways to supplement your income or stretch your money farther, whether it's a side business, bartering for goods, or learning to garden.
5. Business news and your money are connected.
I know I'm probably singing to the choir if you're reading this, but I can't tell you how many times I've spoken to people who learn my column ran in the business section and then say to me, "Oh, I never crack open the business section. It has no relevance to me." That's flat-out wrong. Business matters. It's all around you. It affects your personal finances and your employer's bottom line. I'm not telling you to read every story word for word, but you owe it to yourselves, your career and your retirement fund to pay attention to the companies and people doing business around you.
6. Talk about money. A lot.
I started my first column announcing how much money I made and the amount of my student loan debt. Why? I figured people go through life wondering about their friends' salaries, how much the neighbors owe on their house and whether a colleague's motorcycle trip around the world was fueled by credit.
I think our reluctance to speak plainly about money, paired with our competitive desire to keep up with the Joneses, helped create the super-sized lifestyles that eventually crumbled underneath so many Americans during the Great Recession.
It's a new year. Let's resolve to be open and honest with ourselves, our friends and our children when it comes to money. Contrary to that popular bumper sticker, the person who dies with the most toys doesn't actually win.
7. It's not about money. It's about living.
Money is just a tool to help you live your best life. Enough said.
Finally, a shout-out to the tireless experts who returned my calls on snow days and holidays, who spent countless hours explaining everything from credit card interest rates to the inner workings of the tax code. I am also grateful for the people who allowed me to share details of their financial lives with readers, believing it was worth violating one of the last taboos in a too-much-information society to help others avoid crushing debt, save for retirement, or teach kids the value of a dollar.
And finally to my readers, who made me a wealthier person in so many ways: Thank you.
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Send e-mail to Kara McGuire at kara@karamcguire.com or follow her on Twitter: @Kara_McGuire.
