My mom didn’t really discuss finances or how she made financial decisions throughout my life. She taught me a lot about character and hard work, but finances just never came into our conversations (other than the occasional advice to “marry rich”). Maybe you had a mom who openly shared financial knowledge with you, but if you didn’t have that mom, let me sit you down at my kitchen table and give you some motherly advice for a few minutes…
If You Spend Less than You Make, You will Always Have Enough!
I know that may seem too basic to count as advice, but we financial advisors see the consequences of overspending all the time. I’m not saying you should live on Ramen noodles, but I am saying be mindful of your spending habits to be sure you have margin in your budget. By spending less than you make, you can make borrowing a last resort. I know many people will say that you can’t possibly purchase a vehicle for cash, but we have seen clients reach this goal successfully when they focus on controlling their spending on the front end.
Save for a Rainy Day, but Don’t Forget to Enjoy the Sun!
We all know that life has its ups and downs. When life hits you hard, having some funds set aside for emergencies will allow you to recover without having to take on debt. At GenWealth, we encourage people to set aside $2,000 in an emergency fund as a minimum, then ask them to set the goal of saving 3-6 months’ worth of income as a fully-funded emergency fund. And when life brings victories, take time to celebrate them! These celebrations can be big or small, depending on your budget and the size of the victory. Just remember my first piece of advice about and avoid overspending when planning your celebration!
Keep a Cool Head.
Money can make us emotional, but it’s never smart to make a knee-jerk decision. Let financial choices breathe a minute, and sleep on it before making a decision. This can apply to how you spend money or how you save it. Impulse buying can derail a budget while investing based on emotions most often leads an investor the wrong way. Financial decisions, whether related to spending or investing, need to be based on cool logic which is much easier when a clear plan is in place.
Get an Education!
My mom was in her 30s before she graduated college. She had wanted to be a teacher since she was a little girl, but life happened. She eventually joined the military and, after an injury, had the opportunity to attend college and earn a degree in education, so she took it! Whether you pursue tech school, trade school, or college, you will increase your income-earning potential and future opportunities. It’s never too late to learn a new skill!
The Family that Saves Together Succeeds Together!
My kids know that there are certain things momma is not going to spend money on. I’m careful to explain the difference between acceptable expenses and wasteful spending so that they understand how to prioritize their own dollars someday. Another way you can help your kids is by allowing them to earn money at home and coaching them regarding savings, giving, and spending those dollars prudently. We all want our kids to be better than we are, but if we don’t include them to a degree in our goals and decision-making, how will they learn?
Ultimately, the best thing you can do to help prepare your kids for their own future finances is to make sure your financial house is in order now. Ask yourself if your financial future is set – if you aren’t sure, let us help you cut through the confusion, create a clear plan, and work toward your financial independence. This momma will gladly offer advice from my experience to help you on your way – and to cheer when life gives you cause to celebrate!
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.