Basic Tips for Financial Success

“If you don’t know the Value of Money, 
go and borrow some.”

-Benjamin Franklin (1706-1790), Poor Richard’s Almanack, April 1754Basic Tips for Financial Success
(reprint of Your Money Matters article, syndicated column written by Dan Searles)

One of the best gifts you can give a young person is an education in the basics of financial responsibility. So, when a friend emailed me the other day and asked me to write down some “basic tips for financial success” for her son, a graduating high school senior, I gladly complied.

After all, how many of us with a little gray hair look on in horror and consternation as young families spend money on items they simply cannot afford? Furthermore, very few, if any, in our public education system from junior high, high school, or university seem to teach financial planning basics as part of their required curriculum. I realize that we won’t be able to cure this problem with one column, but if you pass some of these rules to your children and/or grandchildren, you may at least help them find financial success.


“Dear Dan: My son, Jonathan, recently graduated from high school and I was wondering if you guys might be kind enough to write down a few basic tips for financial success that will help him as he begins to navigate the real world? Regards, Debbie in Derwood, Maryland”


Dear Debbie and Jonathan:

What a great question and yes, I’m glad to lay down a few basic rules:


  1. Never quit one job until you have another, no matter how bad you hate the current one. Quitting a job without a new one leads you to spending down your saving accounts. Furthermore, employers look more warily at an unemployed person than one who is proving they can go to work every day.
  2. Build a reserve that is kept in a low risk money market or savings account that adds up to four to six months of expenses. After all, you never know when you’ll have an emergency and if you don’t have cash to pay for it, you’ll have to pull out your credit card and then a cycle of debt buildup can begin.
  3. Never borrow money to purchase a depreciating asset. In our financial consultations, many times people with debt problems are buying furniture, TVs, etc. on credit cards. This is a huge mistake. We know a millionaire who said he only bought used furniture until he had secured his first million dollars. Yet, if you went to his home, you would never have guessed that all his stuff was purchased at auctions, flea markets, and Good Will stores. By the way, cars are depreciating assets. So, if you only have $4,000 in the bank, after your six-month emergency cushion, you should be shopping for an old sedan, not a new Mustang.
  4. Always consider your ability to contribute to your 401(k) at work at least up to the company match. After all, a corporate match is free money! Take it!
  5. Consider your ability to buy disability insurance or make sure you have it at work. According to a 2009 article from The American Journal of Medicine, “health care expenses were the most common cause of bankruptcy in the United States in 2007, accounting for 62% of US bankruptcies.” So, consider a policy that pays your income if you get sick.
  6. This one is counter-intuitive. Give money and your time to causes bigger than yourself. Jews and Christians call this tithing. Eastern religions call it creating good karma. We don’t care what you call it, but we do know it helps. Maybe it’s because giving ties you into social networks that help your career as you help others. Maybe it’s because giving helps you realize how blessed you are, which creates a positive attitude; and we all know positive attitudes help create success. But, those are just guesses. We don’t know why it works, but we know giving makes you feel great.
  7. Never have a child out of wedlock. Having a baby is hard enough without the expense of trying to raise the child without the help of two committed people.


We realize that these rules are not rocket science, but we have found they are helpful in reaching your retirement goals. Best of luck as you pursue your dreams!