Personal Finance

How to Learn From Your Friends’ Money Mistakes

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There are chances to increase your financial knowledge all around you. Once you decide to work to get your finances in order, you can learn lots from looking at others.

For example, you can look to your family and friends or even strangers and fictional characters. This can help you get a glimpse of successful strategies but also financial failures. Both can help you meet your financial goals.

How to Learn From Family

Our views of money and finances are often greatly influenced by the environment we grew up in. Whether we lived in a home where it was a struggle to pay the bills or where money was never discussed, the experiences can shape how we think about, talk about and interact with money as adults.

It’s important to think about how this worked for you and, if you are part of a couple, to be honest in sharing it. This can help your spouse or partner better understand you and help you better understand yourself. You can start a list of the things you would like to emulate about the household you grew up in and the things you want to avoid.

If no one ever talked about money and you saw relationships suffer as a result, you can avoid that in your own relationship by starting the conversation about finances early. This could include discussing goals like when you’d like to retire and how you’d like to save for that retirement.

How to Learn From Friends

We’ve all heard the term, keeping up with the Joneses. But instead of trying to keep up with your friends’ lifestyles, how about watching when they make mistakes and seeing how they correct it.

Seeing a friend who has taken on a lot of debt work hard to pay it off can inspire you both to avoid taking on too much debt and to know that you can improve your financial situation. Communication can again be important here — sharing how impressed you are and asking questions so you can emulate the success.

If you want to track your debt payoff and credit rebuilding process, you can monitor two of your credit scores for free every month on Credit.com.

Fictional Characters Too?

From books, plays, television series and movies there are lots of examples of bad money decisions. Carrie Bradshaw spent all of her money on shoes in Sex and the City. Walter White didn’t have life insurance on Breaking Bad. We laugh and cry with these characters but we can also learn something from them. Having a budget and long-term financial goals (that includes estate planning) can keep us from repeating their fate.

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Image: Digital Vision

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