For Mothers’ Day, all of us at Halpern Financial reflected on the financial lessons we have learned from our moms over the years. While some of our mothers worked and others were homemakers, all had important lessons to share about being thrifty, recognizing value, and keeping our financial house in good order. Those lessons stuck and now we look forward not only to passing them on to our families, but sharing them with you!
President and Wealth Advisor
1. Believe in yourself.
The absolute best lesson on finances I got from my mother was what she used to tell me when she would come up to my bedroom and say goodnight. Most nights she would sit down and just tell me that I can do anything I wanted! She was so overwhelmingly positive and flowing with compliments towards me that I realized (even as a very young boy) that my mom was just being a supportive mom….but it had an impact. A key reason why many people do not have wealth is that they do not believe they are worthy of it! They lack confidence that they deserve to have things others do not. This is a fine line for sure….but the key is she did an outstanding job instilling an internal confidence that I could tackle life to get out of it what I want. To accumulate wealth you have to think you can do it and you are worth it! Most people who have a healthy income but do not have wealth detonate their own financial life some way or another. Could be addiction, job swapping, over-spending, divorces…etc. They do not value themselves properly or the people around them.
2. Understand your income and expenses.
Be aware of what comes in and goes out and be prepared for a rainy day. In addition, she did well to help explain–in a very non-detailed manner–that one has to manage one’s income. Account for what you owe and be sure you can handle twists and turns along the way. She always preached a work ethic and the value of integrity! No amount of money mattered if you compromised your integrity.
Melissa Sotudeh, CFP®
3. Never carry a balance on your credit cards.
Credit card debt has extremely high interest rates, and due to the power of compounding, it can quickly spiral out of control. I am glad my mom taught me not to live beyond my means from the very beginning.
4. “Buy nice, or buy twice.”
My mom taught me to buy quality always (but to wait until it goes on sale). If you buy things you know will last, over the long term you will save money by not needing to replace cheaply-made clothes or other products. However, if you can get a discount, you absolutely should!
Kirsty Peev, CFP®
5. What is spent must be earned first.
My mum was never a fan of any debt at all (except a mortgage), and only uses a credit card where it is necessary (such as when it is more secure to use a credit card versus a debit card, or for certain cash-back opportunities from the credit card). She taught me that a credit card must always paid in full every month to avoid high interest charges.
6. The envelope system.
When I was younger, before the advent of online tools, my Mum actually physically segmented her money for each month’s expenses. She kept separate, labeled envelopes of money for different purposes. This helped her stay organized about current expenses, and she also used the envelopes to plan for upcoming expenses over time. Now you can use various online tools for segmentation, but the lesson is the same.
7. Don’t minimize the value of money, even small amounts.
When I was young we were on vacation and I saw a penny in the street and I refused to pick it up because “it’s only a penny.” Later that very same day I wanted to buy a toy using the money I had with me, and….you guessed it, I was one penny short! My parents would not give me the extra penny so that I would learn to appreciate the value of money. To this day I try to keep that in mind and look to save money in so many different ways.
8. “Yes, but do you really NEED it?”
Finally, the refrain from my youth from my ever-thrifty Mum whenever I wanted to buy anything! I try to say this to myself whenever I am about to make a purchase that isn’t something essential. It has saved me from making some questionable purchases over the years and directly saved me a lot of money!
9. Stretching your dollar.
Growing up, my father was a blue collar worker and mom stayed at home to raise my brother and myself. At the time we did not have many means, but as a child I was oblivious to that. My mother would shop the sales and use coupons for groceries and we would frequent yard sales and consignment/thrift stores first for our “new” clothes and household furnishings. When we did shop retail, we would always visit the sale rack first.
So now, fast forward to the age of when I was first employed and earning my own money. I appreciate the fact that my mother instilled the notion to shop smart and see how far your hard earned dollar can go. While I may not frequent the yard sales and obtain clothing as much from consignment, I learned that more often than not, there are deals to be had if you are a smart consumer with patience. My savings portfolio has reaped the benefit.
10. Save, Spend, and Share
My children are still young, but there are a few lessons we are already trying to instill. For any money they receive, we put it into three jars with different goals: spend, save and donate.
11. The rewards of saving
Occasionally we have the kids use their own money to buy things. This helps them to realize that in order to buy things they want, they need to save for it. That really makes them think about whether it was something they really wanted, and if it is, then that’s an added lesson in delayed gratification.
12. Have a strong work ethic and keep your hard-earned money.
I encouraged my children to build a good work ethic in their teen years, by finding a summer job, and/or a part time job during the school year as long as their grades were up. The important lesson is being responsible, independent, and SAVING their money earned. I have taught my children to always look for the sale or discount.
Also, it is important to be frugal with spending, which is of course the first thought with that first paycheck. Teens should think about the difference between a "want” and a “need" before letting their hard earned money slip through their fingers.
13. Look out for family.
Also now that my Mom is elderly and needing our help in managing her finances, it is important to look out for the vulnerable elderly, who can be taken by scams or people who prey upon the elderly for money.
I hope my children know to look out for me when I'm old and need their help!
Communications & PR Coordinator
14. Visualize your goals
My mom is a BIG believer in the power of visualization. Whether my financial goal is buying a new car or saving for retirement, I always try to picture it in my mind thanks to her. How do I feel once the goal is complete? Where am I? Who is around me? When I have a clear idea of what success looks like, the steps to get there seem clearer, and when I am tempted to stray from those steps, I have a motivating vision to keep me on track—not only with financial goals, but with academic, career and life goals as well.
Jennifer Davis, CFP®
15. Make the most of what you have.
When we were younger my mom used to put aside cash in an envelope throughout the year for Christmas gifts. Even though money was tight, my parents were always very generous with us around birthdays and holidays and I think my mom’s envelope strategy helped. They always knew how to make an occasion feel special even if it didn’t cost a lot.
She also was really good at making an evening at home special when we were kids and my dad worked the evening shift. We’d get lots of blankets, maybe pop popcorn, and watch a movie together. Or we’d work on some kind of creative project, or sing and dance in the living room. Whatever it was, we didn’t go out much but I never really felt like we were missing out.
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