For most people, their mom is the first, and likely, most influential money role model. For me, my own money habits and financial goals have been shaped by my mom and her own money habits. Lucky for me, she has imparted her financial wisdom on me and it has allowed me to be smart about controlling my own financial future. Here are a few of the money lessons she has imparted on me. Hopefully, they help you as well!
Have a ‘Rainy Day’ fund
Sometimes life doesn’t go your way. We’ve all been there. Your car breaks down on Monday and your computer crashes on Tuesday and your actual bills still show up on Wednesday. You’ve got the money for those actual bills that show up in your mailbox each month, but that leaves you without a dime to spare for those unexpected expenses. What do you do? Call your mom and ask for a loan? (Don’t worry, I’ve done it.)
This is where that “Rainy Day” fund comes in. Start by coming up with a plan to save $1,000. That could be by putting away 10% of your income each paycheck or by depositing incremental amounts each month until you reach the goal. Once you get that first $1,000, set another goal to add the next $1,000 and continue doing this until you have 3–6 months worth of expenses saved. This will help you out when an emergency comes your way. Put this money in an account you can easily get to, such as a savings account.
Pay off your debts
Credit cards, student loans, car payments, house payments…the list goes on and on, right? All of that debt can be overwhelming, but, the important thing to remember is that you can pay it off with a bit of hard work and patience.
Start by listing out all of your debts. Take a look at your list and order your debt so that you can quickly see which is the highest amount owed and which is the lowest amount owed. Work to pay off one at a time, from smallest to largest. This will take time (read: years) so be patient. Just keep working at it!
In the meantime:
- Do your best to pay for new items with cash when you can.
- Don’t borrow any additional money.
- Cut up any credit cards that are not absolutely necessary.
Invest with a goal of security.
It is important to plan for the future and that includes retirement. It’s never too early to start saving. Seriously! Talk to your employer about a retirement plan or open one at your bank on your own. Start putting 5–15% of each paycheck into this account. Your 65–year–old self will thank you.
Have the right attitude.
This lesson goes for most things in life but it is not often applied to finances. Having the right attitude could save you a lot of hardship and money problems. Always remind yourself, when making purchases to not have an “I want it!” attitude. This attitude often causes debt. And, as we talked about earlier, you’re working towards paying those off! So, keep in mind, making sacrifices now will help you reap the benefits later. Such as retiring before the rest of your friends. Perks!
Save even more.
I know you’re already saving for a rainy day and saving for retirement. But, yes, you should still be saving more. It’s a lot, I get it. But, it doesn’t have to be a hassle. Use this simple trick to save an easy $1,000 a year.
Week 1-10: Start with $1 and add an additional dollar each week so that on Week 10, you are saving $10.
Week 11: $15 / Week 12: $20 / Week 13–19: $25/week / Week 20–21: $30/week
Week 22–31: $35/week
Week 32–33: $30/week / Week 34–40: $25/week / Week 41: $20 / Week 42: $15
Week 43–52: Start with $10 and subtract a dollar for each week so that on Week 52, you are saving only $1.
Looking to learn more about saving, investing or just additional money lessons? Check out the following sites for professional financial wisdom to help you prepare for the future.
Do you have any good financial tips of your own? Share them with us below!