Want a little more more in your paycheck every month? Get a big, fat tax refund every year?
Here’s how to turn that refund into a raise:
I just finished reading Robert Kiyosaki’s book, Rich Dad’s Increase Your Financial I.Q.: Get Smarter with Your Money and the one major takeaway is that too many people never realize their true financial potential because the get in their own way! Many people focus on earning more money when they should be focuses their time and energy on learning and increasing their money I.Q..
* Note: Kiyosaki discusses 5 aspects of Financial I.Q. in his book, but I’m just going to focus on this one, general concept here.
The learning discussed in the book is not a formal education. In fact, that’s one of the mistakes that many people make – amassing huge amounts of debt going to college in the hopes of “finding a good job” and their place on the financial treadmill, only for some it’s more like a hamster wheel.
So what does “focus on learning” mean if not the traditional, middle class mantra “go to college to get a good job”?
It means taking risks and chances while you’re young, and always learning from your mistakes as well as your successes. People come into money all the time, sometimes mass amounts of it only to lose it all later. Think of lottery winners, famous athletes and performing artists. Suddenly rich, then suddenly broke. Why? Because they didn’t increase their 2nd financial I.Q. after mastering the 1st. They simply did what they loved doing and fell into their riches, but never learned how to manage and protect their wealth.
The first two financial I.Q.’s in the book are :
In the example of the star athlete or lottery winner, they mastered I.Q. #1 but failed horribly at I.Q. #2 – protecting their money.
Protection can mean many different things, and is usually referred to as “security” by many people. They may want to be secure in the knowledge that their savings are safe from loss, or maybe they want to protect their savings and assets from legal action. Whatever meaning you take, once you’ve earned it you must get educated on how to keep it or risk losing it all.
But even losing it all isn’t the end.
There are many well known moguls, like Donald Trump, who have built vast financial empires and lost it all only to come roaring back again. Why? Because they learned from their experience and were not afraid to fail.
” Those who cannot remember the past are condemned to repeat it.”
-George Santayana
If you do not learn from your mistakes, you will keep making them and make little or no progress in life.
I’ve always thought it’s important to learn from your own mistakes, but it’s also important to learn from other people’s mistakes as well.
Here are a few resources to help boost your financial I.Q.:
The Holiday Season is the busiest time of year, full of family and friends, good food – and spending. Between the parties, travel to be with family, and gift-giving, it’s practically inevitable you’ll be dishing out a lot of dough. But you don’t have to go into debt during the Holidays that leaves you financially hungover in January and behind for the rest of next year. Plan ahead to minimize your debt, or better yet, not rack up any at all! Avoid the debt collectors by following these 8 simple tips to keep your Holiday spending on track:
If you’re like most Americans, you will manage to rack up a measure of debt during the Holidays despite your best efforts. Don’t despair; you can still right the ship financially without spending the whole year trying to pay it off. It will just take a little planning:
There’s no way to get around it – you’re going to be spending money during the Holiday season. But if you plan early and spend wisely, you can make sure that this Holiday season is one full of merriment instead of financial misery.
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Children learn many things from their parents, and most of it is subliminal. We indirectly learn habits and behaviors by watching our parents, and when we become adults and have children of our own we pass many of those habits, behaviors and beliefs on to them whether we know it or not.
Here are the top 5 bad habits about money children learn from their parents.
This is easily the most common habit picked up from parents, since money is often at the center of any disagreement between parents, and many people – parents included – do not know how to have constructive discussions on those disagreements. This can indirectly teach children that money causes problems, and lead them to place an unhealthy emphasis on money to the exclusion of all else.
The average college student graduates with $4,000 in credit card debt. Some of that is because the insane cost of college leaves little left for basic living, but few students are leaving home with any understanding of debt and why it should be avoided.
Whether it’s at the local mall or online, parents who don’t shop around for a better price have children who don’t shop around for a better price and that means spending more than you need. This leads to children becoming adults without an appreciation for the value of a dollar. For my part, my children have seen my wife and I Google for coupon codes so often before making a purchase that the first thing they say when they see something in the store they like is, “Let’s Google for a coupon code when we get home and see if we can afford it!”
Trying to make up for lost time with your children by giving them gifts reinforces materialism and teach kids that “things” are more important than people. Spend money on making memories instead. It’s what kids want, and parents will be creating stronger bonds with their children that help keep them on track later in life. When it comes to kids, it’s better to spend time than money. It’s better still to spend time teaching kids about money.
It amazes me how many people are angry with the government for bailing out banks, and automotive unions and yet see no problem bailing out their children. Bailouts, whether federal or parental, reinforce bad behavior. It teaches the recipient that there is no risk in making a bad decision, because someone will come in and clean up your mistake.
It creates a lack of responsibility, and an unhealthy dependence on the parent. Parents should consider this: One day you will shuffle off this mortal coil. Think long and hard about where your children will be when you’re no longer their to bail them out.
It’s also bad news for the parent because the money is often being redirected from retirement savings, leaving the parents unable to provide for themselves or their children.
It’s an insidious cycle that needs to be broken. Parents should realize that a little pain early on is worth it if their children learn to stand on their own two feet. Also, it’s much easier if started when the children are younger. 
Money in the form of an allowance, tied to chores or goals is a far better reward.
Watch this video for interviews with students about what they’ve learned from their parents about money:
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