Learning by your mistakes is part of what life is all about and how you gain valuable experience, but when it comes to money matters, getting your sums wrong can prove to be a costly life lesson that you could do without and could mean money down the drain.

Get a handle on the value of money

It seem an obvious thing to say but it can make a big difference to how you fare in your financial life, if you work on understanding the true value of money.

It is all too easy these days to pay using your smartphone or by card, meaning you don’t really encounter real cash or perhaps get a handle of its true value to you.

A good example of this would be if you want to buy a new gadget that has a price tag of $500. Buying that item on credit will mean that you end up paying much more for the item than the original price of $500, so the sensible thing to do would be to pay with cash in your bank.

Even if you earn as much as $20 per hour, by the time you add in taxes that you have to pay on your earnings, you will have to work about 33 hours at your net income rate, to be able to earn enough money to buy you must-have item for $500.

Understanding how hard you have to work to pay for something like this will instill a sense of financial awareness and discipline within you that should help you to minimize any indiscriminate spending habits.

Always try to have an emergency fund

One of life’s financial lessons that too many of learn the hard way, is that things don’t always run smoothly and you are almost certain to experience a few bumps in the road.

Not having the money to get your car repaired when it breaks down unexpectedly or running out of cash before you next get paid, can leave you to resort to some short-term lending solutions or to spend on your credit card, both of which will turn out to be costly.

Accidents that require medical treatment can certainly be added to this list. In addition to the funds to cover these emergencies, you may also have to pursue a personal injury claim and rely on the help of experienced attorneys like The Law Offices of David E. Gordon.

A great bit of financial advice is to set up an emergency fund. Put away some small amounts of money on a regular basis and you should soon have a pot of cash tucked away in a savings account, that you can use as an emergency fund.

This allows you to pay for that car repair by borrowing from yourself rather than a lender, so you can get on with your life, and arrange to pay back the money into your savings ready for the next bump in the road.

If you follow these simple tips on how to manage your money and always try to use a budget in order to keep an eye on your spending, you should have a better chance of turning into money savvy adult who manages to cope with most financial events that life can throw at you.

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Sienna Horton is a Mom of 2 grown, or almost grown, kids. She’s working on making them financially independent and able to stand on their own two feet in the world and sharing her tips, and failures, with other parents!