In the U.S., the third Monday of each February marks President's Day—a holiday that's often marked with mattress and furniture sales and discounts on new cars. But aside from these budget-friendly purchasing opportunities, there may be many more financial lessons to be learned from past U.S. presidents. Below, we share three of the most enduring money lessons from George Washington, Thomas Jefferson, and Abraham Lincoln.
George Washington: Use Debt Wisely
In his presidential farewell speech, Washington cautioned against the frequent use of credit, stating that one method of preserving public credit is "to use it as sparingly as possible... but remembering also that timely disbursements to prepare for danger frequently prevent much greater disbursements to repel it…" 1
In other words, while it's important to avoid taking on unnecessary debt, in some situations, going into debt may help avoid larger expenses later. For example, allowing a problem with your vehicle or home to fester may cause much more expensive issues down the road, whereas fixing it now (even if it means dipping into savings or putting the cost on a credit card) may help you avoid a much larger repair bill in the future.
Thomas Jefferson: Live Within Your Means
Not all U.S. presidents have presented a good example of financial stewardship—some, like Thomas Jefferson, struggled with debt throughout their lives. At the time of his death, Jefferson owed more than $100,000 to creditors or a whopping $2 million in today's dollars.2 But these struggles may provide their own lessons:
- Avoid lifestyle creep, and don't assume that a healthy income will last forever.
- Pay down high-interest debt as quickly as possible.
- If debts seem insurmountable, consult a bankruptcy attorney or financial professional to get a better idea of your options.
Abraham Lincoln: Seek Out Contrary Opinions
Abraham Lincoln was one of the most controversial leaders of his time and was well-known for seeking out opinions of those who disagreed with him. In fact, Lincoln's first presidential Cabinet included two of his rivals for the 1860 presidential nomination.3
Surrounding yourself with people who are inclined to agree with you could leave you without a full perspective of your financial picture. By getting advice and perspectives from multiple sources—online blogs, articles, and message boards; trusted financial mentors; family members and loved ones; and, above all, a financial professional—you have a broader view of the issues facing you and may be able to formulate some outside-the-box solutions.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.
This article was prepared by WriterAccess.
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