Ten Financial Lessons for a Richer Life

Let's face it, personal finance isn't nuclear physics.

The basics are so simple that anyone can get the concepts down in less than a day -- spend less than you earn, save and invest the rest.

Knowing what should be done and actually doing it, however, are two different things.

Most people realize that spending more money than they have is a bad, bad thing. That still doesn't keep millions of people from racking up credit-card debt.

Here are 10 money lessons I wish I had known when I was 20 (I'm now 42 years old), which also have the power to change your life if you are able to embrace them.

1. Money Doesn't Buy Happiness

I knew this in my heart when I was younger. After all, who can't hum the tune of the Beatles song Can't Buy Me Love?

But my head often countered it in real life. It took me several years of working in a large corporation making good money, but not enjoying my job, to finally get it through my head that money in itself does not make you happy, and the accumulation of money will do very little for your happiness unless you know how to use that money once you have it.

The happiness comes from the opportunities money makes available so that you can do the things that you want to do. If you have no idea what these things are, no amount of money will make you happy.

2. Goals Are the Key

I didn't begin to make specific financial goals until my early 30s, and it kills me that I lost 10 years in this department.

The old saying that if you don't know where you're going, it's difficult to get there is never more true with your financial goals. It wasn't until I took the time to write down my financial goals in detail that I began to find financial success.

Financial goals give you something to strive for and give you clear knowledge on how you want to spend the money that you earn. They also greatly help you avoid impulse purchases and spending money on things that aren't important.

3. Impulse Purchases Dash Dreams

I spent more money on more crap coming out of college than I would ever care to admit.

Impulse spending (or spending money on anything that isn't important to you and your goals) is the worst type of spending that you can do, yet this is how most people spend their money when they don't have financial goals.

It's especially destructive if it also leads to credit-card debt. Impulse purchases come about when you aren't really sure what you want in your life or what will make you happy.

This is why advertising is so effective. Advertisements make you believe that buying a product or service will give you the happiness that you are seeking, when this is rarely the case.

If you can learn to be patient with your money and avoid impulse purchases by knowing what your financial goals are, you will have made major strides in getting your finances in order.

4. Buy Memories, Not Things

A big con our society plays on us is that stuff will make us happy.

I fell for it for far too long.

When it comes to spending the money that you do have, buying experiences and memories with those whom you care about is a much better use of your money than purchasing material things. It's not the house that you buy, but the home that you make with your family inside it that matters.