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The Best Financial Advice I Never Received

January 14, 2011 · 94 comments

in Personal Finance

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?

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{ 17 comments… read them below or add one }

retirebyforty January 14, 2011 at 3:50 pm

I anti-advice learned from my dad is to NEVER GAMBLE. My dad loves gambling especially when there is money at stake. He bet on football, basketball, baseball, poker, roulette, crab, horse racing, anything and everything. Eventually he graduated to the stock market and still kept losing money because of his ultra high risk tolerance and gambling mentality. So don’t gamble money that you can’t lose or better yet don’t gamble at all.


The Saved Quarter January 14, 2011 at 4:18 pm

retirebyforty – Oh, I could add “don’t smoke” to my list, too. Vices are expensive!


alex March 18, 2011 at 5:18 am

I second that. I always have to wonder about those people who always claim they have no money but can afford to smoke a pack a day…


Kris March 18, 2011 at 12:15 pm

Alex, cigarettes are the biggest waste of money out there, you are so right!


Deidre @ TransFormX January 14, 2011 at 9:02 pm

First off, kudos to you for the determination to learn the positive out of the financial issues that your parents seemed to have.

Great set of rules to live by and I am all for being open with your kids about money management.



Jesse January 15, 2011 at 3:56 am

Some of my best lessons learned in life came from the negative example of my dad. He unknowingly shaped my future by just acting like a jerk all the time. In fact, he continues to shape how I act 🙂 every time I visit, I am reminded of the kind of person I never want to become and that pushes me towards how I want to be.


Jacq @ Single Mom Rich Mom January 15, 2011 at 9:32 am

What not to do in relation to my parents? Money is meant to be used as a tool – to be enjoyed and judiciously spent and not hoarded.


Nicole January 15, 2011 at 9:38 am

My parents have opposite spending styles, which could cause tension. I learned to take the positive parts of both and to always be on the same page as my spouse.


The Biz of Life January 15, 2011 at 10:15 am

The rules of money are pretty simple and have been known for thousands of years. The hard part has always been controlling behavior and dealing with the unexpected. The temptations to overspend are in our faces everyday. Never in the history of time have their been more ways to shop, more goods available to consumers and more advertising to convince us to buy things we don’t really need. The best advice I ever got was make sure the person you marry has very similar spending habits to your and the same philosophy about money and saving.


101 Centavos January 15, 2011 at 10:16 am

I like that term, anti-advice. The best example I could have learned from my parents is beware of excessive (and expensive!) vacation travel. The memories and the experiences may be great, but they may come at the cost of a future nest egg.


First Gen American January 15, 2011 at 7:11 pm

Oh I have a bunch of negative lessons I learned from my dad. I don’t even think I’ve written about all of them yet. Here are the big ones that affect both the pocket book and your closest relationships:

-Don’t become an alcoholic or a drug addict.
-Don’t gamble
-Although it’s easier to complain about your place in life, complaining doesn’t get you anywhere, taking action to change the outcome does.


Al January 17, 2011 at 8:14 am

I was raised in a household where my mother took us kids shopping and was always looking for bargains on clothing. At the time I didn’t appreciate the value of this because I wanted what was popular and in. However, the lessons did rub off and allowed me to retire at age 50.

Al from http://www.smartdebtrepair.com


Olivia January 17, 2011 at 10:02 am

I think the biggest lesson I learned is to maintain a steady conservative spending level. When my folks had money they spent it, when they didn’t they didn’t. There was never any cushion and sometimes we just plain went without.

The second lesson is to talk about finances, get on the same page. My folks never did. We involve the kids now that they’re older. We don’t go into bloody details, but make them aware of the things that directly impact them.

The third is to actively instruct the kids in life skills. Teach them how to evaluate purchases, save, budget. My mom’s optomistic “you’ll figure it out”, was not helpful.


ricky January 31, 2011 at 7:43 am

as hard as it may sound, you may have learned the best lesson of all through your experience. Most people learn through experiences, so whilst it did not help your family at the time, it has (selfishly) helped you become much more sensible with your money! The situation I see some people get themselves in to is quite unbelievable at time and things can very quickly spiral out of control! Thank you for sharing your experiences with us!


Glenn @ Financial Coaching with Glenn July 19, 2011 at 8:12 am

The best financial advice is to now teach the next generation to avoid credit cards debts, control spending by creating a spending plan and avoid debts of any kind. It is important that we are not only focus on earning money but ensuring that we keep most of what we earn to create wealth.


Kris July 19, 2011 at 8:22 am

That is very true Glenn. I think many young adults kind of go ‘spending crazy’ when they get those first paychecks because they never had money to spend before. That can create bad habits too if not kept under control.

I wish that credit card companies were not allowed to send out their applications to kids in college.


Zen Strokes January 30, 2013 at 9:41 am

All great points – it only took me 30 years to learn! I guess I grew up in a good household too but the credit cards I got freshman year of college did not set me up for success.


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