Sunday, May 11, 2008

Thanks Mom For The Financial Training

I owe a lot of thanks to my Mom for my success in personal finance. I developed good skills in spending and saving primarily from the example she set in managing our family finances. Here are the one's that have been most helpful to me:
  • Thriftiness - Mom always loved using coupons, buying on sale or getting other deals to stretch Dad's income. By doing so, she got the best for the money she had. In addition, she didn't believe in using purchases to show one's affluence.

    I definitely inherited her attitude of buying only what I need. Also, I try to get good deals for large purchase by asking for discounts when paying cash.

  • Saving - Mom always managed to put some money from her monthly household allowance into savings. Over time she saved the down payment for our first house, buying a car with cash, and the down payment for various investment properties.

    Her example instilled the habit of saving into me. Just before retiring in my forties in 2007, we were saving about 20% of my pre-tax income. Saving was a big enabler for being able to retire early.

  • Investing - Mom was a conservative investor. She considered banks risky. Under the mattress was the riskiest investment she ever did. While I never understood why, I believe her family must have had a bad experience with a bank in her youth.

    While I do use banks and invest in stocks, her conservative attitude did transfer to me. During the nineties, I invested in very few tech stocks, resulting in a mediocre return for that period. However, being conservative saved me from the 2000-2002 tech stock crash which created significant losses.

  • Of course, Mom was much more than a financial advisor. She was also a nurse, chef, and household operations manager. And she did a great job at all of them. Thanks, Mom and Happy Mother's Day.

    This is not financial advice. Please consult a professional advisor.

    Copyright © 2008 Achievement Catalyst, LLC

    1 comment:

    Mrs. Accountability said...

    Your mom was cool! My mom did a good job at teaching me how to be a savvy grocery shopper. I can still remember her red crayon, she'd circle the best buys and then make a shopping list based on what was on sale. I found your post through the 153rd Carnival of Personal Finance. Nice to meet you!