The Founding Fathers were a talented and wise group of men. In 1787, they constructed a government that has stood the test of more than 200 years, the Civil War and the Great Depression.
When they weren’t busy contributing to the development of independence and nationhood, the Founding Fathers had a lot to say about money. Here are four financial lessons you may be able to learn from our founders.
1. “Beware of little expenses: A small leak will sink a great ship.” — Benjamin Franklin
Little expenses can end up having a big impact on your financial well-being. That turkey sandwich you buy for lunch every day? It could end up costing you thousands. In fact, Americans spend an average of $2,746 per year on lunch, according to a 2015 survey from Visa.
Takeaway: Consider keeping track of all your expenses — not just the big ones — and using a free service, such as Mint or Credit Karma’s My Spending tool, which will break down how much you’ve spent across various categories, such as groceries, utilities and gas.
You might identify smaller expenses that are adding up more than you’d like and you can cut back on your spending as necessary.
[See: 12 Ways to Be a More Mindful Spender.]
As for tracking your pesky lunch spending, Visa even has a LunchTracker app specifically to help you track and manage your weekly and annual lunch costs.
2. “Never spend your money before you have it.” — Thomas Jefferson
Jefferson is well-known for drafting the Declaration of Independence before going on to serve as president for two terms. Perhaps what he’s not as well-known for is carrying large amounts of debt.
Despite his own situation, Jefferson recognized that refraining from overspending was an important money principle to pass on to younger generations.
He wrote this money lesson in a letter to his granddaughter, instructing her not to spend beyond her means.
Today, this could mean making sure that you don’t overspend on credit cards if you don’t have the money in your bank account to pay your bill when your statement arrives.
Takeaway: Try creating a realistic monthly budget and sticking to it. You can always review and revise it down the line if you find that it’s not practical. Additionally, you could stick to using cash since you can’t spend cash you don’t have.
[See: 6 Ways to Treat Yourself on a Budget.]
3. “To contract new debts is not the way to pay old ones.” — George Washington
This financial lesson came from a letter Washington wrote to James Welch, who leased some land from Washington. He then used the land to obtain additional credit but never repaid Washington for the lease.
In simple terms: If you have existing debt, you can’t just escape it by taking on new debt.
If you take out a personal loan of $1,000, then use that $1,000 for a down payment on a $100,000 mortgage, you’ll need to pay back both the personal loan and the mortgage, plus interest, which could really add up.
Continue to take out new lines of credit to pay off old debt, and you may find yourself with an insurmountable amount of debt.
Takeaway: Consider carefully before taking on new debt and come up with a plan for paying down existing debt, so it feels more manageable.
One alternative to taking on more debt is cutting back on discretionary expenses, such as eating out or shopping for clothes, then putting the money you’ve saved toward paying down your existing debt.
You could also make extra money through side gigs, such as filling out paid online surveys, and using this extra cash to pay off your debts. Don’t forget to come up with a manageable plan and timeline to pay off your debts.
[See: How to Live on $13,000 a Year.]
4. “The circulation of confidence is better than the circulation of money.” — James Madison
Madison was discussing what makes a successful country when he spoke this famous line. He explained that no country can do without public and private confidence. In other words, he advocated in trusting in your government, community and relationships. Without this, he noted, it doesn’t matter how much money exists.
Madison also explained that self-belief can be a real advantage to people carrying debt.
Depending on your circumstances, carrying debt might be challenging and stressful. But building conviction in yourself may help you tackle it head on.
One way to do this is to create a payment plan and stick to it. Another way is to tally the amount you’ve paid down toward a debt and see that number increase over time (as your debt decreases).
Takeaway: Figure out what can help you feel more confident as you manage your debt, and start taking action. Even though this won’t necessarily change the amount of debt you have, it could help you feel better equipped to tackle your debt.
Bottom line: The Founding Fathers may have been around a couple of hundred years ago, but their advice is still as relevant as ever.
That is, some of their advice. After all, it’s probably good that no one listened to Franklin when he said that the turkey would be a better national symbol than the bald eagle.
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4 Simple Financial Lessons From Our Founding Fathers originally appeared on usnews.com
