A personal road map - Part 1

I’ve created a personal roadmap for the rest of 2011, listing several health, financial, family, and travel goals I want to achieve in the second half of this year. One of those goals is to give back and help others more. With that in mind, I’ve decided to publish my brief list of what I think everyone should know — but might not.

I believe that persistently and consistently following these simple guidelines and rules could make you rich. In my experience, these simple lessons aren’t learned in high school, or even at university.

Here are the lessons everyone should know and hold dear. I hope they’ll save you from you saying “woulda, coulda, shoulda” 20 years from now.

Simple rules, life lessons

As a parent of three inquisitive and fun-loving little beings, I think it’s important that they begin to learn and understand these lessons, even at an early age. I hope that they will become self-sufficient and also earn the freedom to chase their dreams someday.

1. Spend less than you make

I could say it many different ways. “Be a net saver.” “Avoid high-interest debt.” All the points are the same.

Everyone needs to learn as soon as possible that it’s extremely important to save and invest some of your earnings. Unfortunately, you can’t turn to our country, your friends, or institutions of higher learning to get this lesson.

Instead, here are three ways to impart this lesson to those you love:

• Match savings. Each year on their birthdays, we match our children’s savings. Currently, that match rate sits at 100%. So each time, during the year when they want to purchase that cool radio-controlled car, or fancy new doll that actually wets itself, they realise that it costs them double. A dollar saved today is worth two dollars on their birthday. It makes them think twice about impulsive purchases.
• Make them earn part. If a dependant loved one wants something, encourage them to go get it, and match what they do. If your sixteen-year-old wants a car, tell them you’ll pay half once they’ve earned and saved up the first half of the price.
• Buy a smaller home. The biggest purchase most people make is their home. Most people mistakenly think of their home as an investment, and buying way more house than they could afford. To make sure you don’t end up “house poor,” consider these guidelines:
• Don’t buy a house unless you plan to live there for at least seven years.
• Don’t spend more than four times your gross household income on a home.

This roadmap was written by Buck Hartzell and reprinted from the Motley Fool.