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Seven financial lessons you probably learned the hard way

Your favorite math teacher taught you fractions. Your grandmother taught you how to bake. Your father taught you how to change your oil and your mother taught you how to ice skate.

So who taught you about money? You may have received a few friendly tips here and there, but chances are good that a lot of your most important financial lessons came directly from life itself. And they were probably a bit harsh.

Here are just a few of the important money lessons you probably learned the hard way.

There’s usually a catch

Every day you’re bombarded with “great” deals. Free! Nearly free! Two for one! Ten for one! Zero percent financing!

You may be naturally suspicious, but it’s not until you make your first really terrible, money-wasting decision that you truly and forever accept that nothing is ever quite as good as it’s made out to be. (Especially timeshares.)

Credit is hard to perfect and easy to ruin

It’s easy to take credit for granted when you don’t really need it, which is why so many young adults do such lasting damage to their credit history. It’s not until you actually need good credit and see the actual cost associated with having subpar credit that you appreciate how much work goes into crafting an excellent score.

It’s dangerous to spend money you don’t have

You need to use credit to build credit, but that doesn’t mean you can afford to let your spending outpace your earning, with borrowed money filling in the gap. For a lot of us, though, it’s hard to respect the dangers of abusing credit until we see exactly what our overspending has cost us.

Always get it in writing

Trust is a wonderful thing to have. An even better thing to have is trust plus a written contract. Unfortunately, we usually have to have at least one messy falling out over a broken verbal agreement before we accept that everything is better in writing.

Don’t lend money to friends or family

Of course you want to help out any way you can. And I’m not suggesting that you can’t give money to your loved ones. But loans between friends and family members rarely work out and often end up causing much more damage than good.

Prevention is a wise investment

When the car starts making a funny whistling sound, but still drives just fine, you might think, “This is fine. It’ll be fine.” And when you notice a little crack in the foundation of your house, you might think, “That’s a very small crack. It’ll be fine.”

In truth, things are always fine right up until the moment they aren’t fine anymore. Unfortunately, that’s not a lesson we’re fully receptive to until the car breaks down in the middle of the highway or we’re forced to spend $5,000 to fix our foundation. Long story short – little problems are easier (and cheaper) to fix than big problems.

When disaster strikes, you’ll always wish you’d saved more

It’s hard to appreciate the value of an emergency savings account until you’re faced with a significant financial setback. It’s not until disaster strikes that we realize just how much we help ourselves by making a dedicated effort to put money away for a rainy day.

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