This is a guest post from Penny Saver, who is a frugal mom making the most of meager means and saving her quarters to save a quarter of her income. She blogs all about it at The Saved Quarter and is challenging you to save with the The Saved Quarter Challenge.
I grew up in a financially insecure household. While we always had a roof over our heads and food on the table, money was always tight and a constant source of tension and nearly caused my parents to divorce. My dad’s business went bankrupt and we had to move, and at the same time my parents’ marriage was near the tipping point. They were talking about divorce and my dad moved out for a few months. Growing up, the example I saw was money as a source of pain and tension, and shopping on credit cards as the way to get a break from negative feelings (whether we needed anything or not.) Needless to say, a positive example of money management was not learned at home, and although my parents have stayed together and make a good income, they still struggle with finances.
The best financial advice I’ve been given has therefore been anti-advice.
- Live within a budget and pay yourself first so you always have a cushion to fall back on. Be actively involved in the choice of where your money is going.
- Use credit judiciously, pay it off every month, and never use credit to pay for credit. (I have avoided credit altogether, leaving me with no credit score at all until the past year.)
- Don’t shop for reasons other than “I need this.” Shopping may seem like a good way to blow off steam, but if you don’t have the money, it just creates problems.
- Pay bills on time.
- Don’t buy things you don’t need. Delayed gratification means that bigger goals can be reached.
- Your house is not a bank account. Don’t take out the equity to pay for vacations, jewelry, or other unnecessary expenses.
- Don’t argue about money in front of kids.
- Don’t let money come between you and your spouse.
- Be honest about where your money is going, both with yourself and with your spouse.
- Perhaps controversially, the best advice I learned from my parents was not to share a checking account with my husband, which was the single act that reduced their fights more than any other. My husband and I have separate personal accounts and a joint account out of which I pay the bills. He has access but doesn’t touch it unless there is a problem; I can’t overdraw because he forgot to write down a trip to the ATM.
I haven’t learned it overnight, but I understand where my own financial situation came from by looking at that of my family of origin and am actively trying to improve it. I’m also teaching my kids about positive money management, a step that was missing from my own upbringing. I hope that, when asked about the best financial advice they’ve been given, my children will have plenty of positive examples to consider rather than using me and my husband as examples of “what not to do.”
From Kris: None of us want to be an example of what ‘not to do’ in any facet of life. However, I am sure my kids will laugh amongst themselves one day about not following in mom’s or dad’s footsteps in one way or another. (They will probably never buy cruddy generic, off-brand vanilla.) Have you had similar circumstances as Penny? Did you learn more of what not to do while growing up than learning what you should do when it comes to finances?