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Financial Advice From Founding Fathers

A compilation of wise words from some of the Founding Fathers on money and finance and how they still apply today.

June 29, 2022

The founding fathers are mostly celebrated for fighting for independence and creating the U.S. Constitution. What you might not know, however, is that they also left us with some valuable advice when it comes to finances.

In honor of the Fourth of July, we've compiled a list of some of the most popular quotes about money from the founding fathers.

Whether you’re trying to rein in your spending, get out of debt or save for retirement, the following advice from some of our nation's most revered figures could help.

Thomas Jefferson

“Never spend your money before you have earned it.”

Thomas Jefferson frequently wrote to his grandchildren to advise them on various life matters. In 1811, for example, he sent a handwritten book titled, “A Dozen Canons of Conduct in Life,” to one of his granddaughters, Cornelia Jefferson Randolf. 

The book contained a list of 12 life axioms with one of them being: “Never spend your money before you have earned it.”

Now, while this particular piece of advice from Jefferson might seem to be common sense, it’s actually one that many people don’t follow.

Spending money before earning it basically means getting into debt. And in a world where we are constantly bombarded with advertising and temptation, where instant gratification is the norm, and where credit is easily available, it’s all too easy to fall into debt. Unfortunately, debt can ruin your life, not just financially, but also mentally.

So, as Jefferson advised his granddaughter, it’s in our best financial interests to limit our spending to the money we have earned.

Of course, there are times when you might need to borrow money, but try to do it in a smart way that doesn’t cause additional debt you in the long term.

If you use credit cards, for example, try to spend only what you know you can pay off in full at the end of each month. Paying off your whole balance at the end of the month will help you avoid racking up huge interest charges that could, with time, land you in a mountain of debt that can be hard to get out of.

Benjamin Franklin

“Money is of a prolific generating nature. Money can beget money and its offspring can beget more.”

This quote from one of the most popular figures of the American Revolution is often used to describe the power of compound interest.Compound interest is when you earn interest on your principal investment, as well as on any previous interest that the principal has earned.

For example, if you invested $10,000 at a 5% rate of return, after one year, you would have $10,500. If you leave that money invested for another year, you’ll earn 10% interest not just on the original $10,000 investment but also on the $500 interest from year one. And so on and so forth. After 10 years, you’ll have around $16,290 in total. After 20 years, it would be $26,530.

That’s the power of compound interest — your money begets more money and its offspring begets more, as Benjamin Franklin so wisely put it. Even a small investment can grow into a large sum over time, allowing even the most ordinary person to accumulate wealth.

Compounding can be an especially useful tool for long-term goals like retirement, so take advantage of it by starting your savings journey early.

John Adams 

“All the perplexities, confusion, and distress in America arise not from the defects of the Constitution, not from want of honor or virtue, so much as from downright ignorance of the nature of coin, credit and circulation.”

One of the founding fathers, John Adams, was a critical thinker who advocated for the importance of financial education. Adams believed that financial education was essential for both individual prosperity and the well-being of society as a whole.

The above quote which he wrote in 1787 is more important than ever today.

Many of the financial woes that plague so many Americans today stem from a lack of adequate financial understanding or knowledge. Indeed, according toWalden University, about four in seven Americans are financially illiterate. Meanwhile, just 16% of millennials understand basic financial concepts according to theTIAA Institute.

Unfortunately, inadequate financial knowledge and bad financial decisions usually go hand in hand. 

John Hancock

“I find money, some way or other, it goes very fast.”

Aside from being a pivotal figure in the American Revolution, John Hancock was also a very successful businessman, so it’s safe to say he knew a thing or two about money.

In our everyday lives, it’s often quite easy to spend money without even thinking about it.

You go out to the supermarket for an item that should only cost a few bucks, but you come across another item that is “on sale” and before you know it, you've spent $100. Or you see a new electronic gadget online that you just have to have, and the next thing you know, your bank account is $200 lighter.

Put simply, if you’re not careful, money has a way of slipping through your fingers. Hancock’s quote is a reminder to slow down and be mindful of spending.

If you frequently find yourself blowing through your paycheck as soon as it hits your bank account, for example,creating a budget could help you control your spending.

When creating a budget, start by noting down your take-home pay, i.e. your total monthly income after taxes, and then how much you have going out, i.e., your expenses. This’ll help you see if you are overspending and if there are areas where you can make cuts.

After that, set realistic monthly targets for how much you should be spending going forward, with the goal being to make sure that your spending is not exceeding your income.

Wrapping up

While our founding fathers lived in a different era and led lives that were vastly different from ours, some of the financial advice they left behind is still as relevant and useful today as it was back then.

Putting into practice some of their principles on money could help you get ahead financially.

In the meantime, if credit card debt is preventing you from reaching your financial goals,Tally† may be able to help. You can use Tally to get a low-interest line of credit to consolidate your credit card balances, which can help you pay it off faster and save money in the long run.

To get the benefits of a Tally line of credit, you must qualify for and accept a Tally line of credit. Based on your credit history, the APR (which is the same as your interest rate) will be between 7.90% - 29.99% per year. The APR will vary with the market based on the Prime Rate. Annual fees range from $0 - $300.