Monday, May 2, 2016

Financial Lessons from my Mother

Mother's Day is just around the corner, and although my mother is no longer here, she left me a healthy respect for money. And I still benefit from the financial lessons she taught me. There was really some wisdom behind her platitudes:

"Money doesn't grow on trees." My mother let me know that my father worked very hard for what we had, and there was a finite amount of money in the household for discretionary expenditures. Unlike some of my friends (or so I thought), I couldn't have whatever I wanted, whenever I wanted it. When my allowance was spent, there wasn't any more until the next week. My mother taught me to live within my means.

"Save for a rainy day." My mother gave me my first piggy bank when I was three years old. Actually, it was an oil can with a slit in the top that my father cut for me. You could put coins in, but you couldn't get them out. My father finally cut the can open when I was about ten, and we moved my nest egg to a passbook savings account. My mother taught me about the magic of compound interest, and instilled in me the joy of watching my savings grow.

"Always keep a little 'mad' money." I think what my mother was referring to was a scenario where a girl goes out on a date and decides midway through that it's not going to work. She should have money to call a cab or otherwise extricate herself from the situation. But this advice can also be applied to long-term relationships. No matter how much you love and trust your spouse, no matter how fiscally secure you are as a couple, it is wise for both parties to have a basic understanding of household finances. Both of you should know what income to rely on, what bills need to be paid, and how to access the necessary funds. If something should happen to one partner, don't leave the other one clueless. My mother taught me to value financial independence.

How did your mother shape your attitudes toward money? I would love to hear your comments.

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