I had the privilege of being raised by an amazing mother who instilled valuable lessons in me from a young age.
As a mother of five kids, she mainly taught my siblings and me simply by being. She didn’t expect anything from us that she didn’t demand of herself.
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My mother came from humble beginnings and never lost sight of the value of money. Now that I’m an adult and a mother myself, I’m even more appreciative of the money lessons I have learned from her. Here are a few.
1. Maintain Financial Independence
Growing up, my mom encouraged my sisters and me to get an education, earn our own money, and be financially independent.
Read More: How to Achieve Financial Independence
My mom worked outside of the home and could take care of herself financially. My mother always stressed the importance of having savings of your own to avoid getting stuck in a bad relationship or marriage out of necessity. Though my parents were happily married for 55 years until my dad passed, she had seen several relatives and friends stay in marriages they did not want to be in anymore for financial reasons. She did not want that to happen to us.
Sometimes, couples decide that one parent will stay at home because it is the best decision for their family. However, as a stay-at-home parent, you can maintain some level of independence. For the stay-at-home parent, having your own retirement and saving accounts can provide a sense of freedom and security.
2. Live Below Your Means
This is a common unwritten rule in personal finance, but it can sometimes be challenging to apply.
My mother enjoyed nice things, but she believed in moderation. She taught me to save for my purchases instead of using credit unless it’s a big purchase like a house.
With easy access to credit, we can easily believe that we’re living within our means because we can afford the monthly payments. But being able to afford the payments does not necessarily mean you can afford the purchase.
How can you ensure that you are living below your means? Comparing the income you bring in every month to what you spend is a great first step. Tracking your expenses every month and creating a budget can also help ensure that you stay within your means. Building an emergency fund, taking a closer look at your retirement, and aggressively paying down high-interest debt should be priorities.
3. Save and Invest in the Future
My mother taught me the importance of always saving 20% or more of your income. She also believed in different forms of investing.
My mother lost a significant amount of her investments at a financial institution in my home country in the 1990s. The institution closed and never returned her money. In Cameroon, there was no equivalent of Federal Deposit Insurance Corporation (FDIC) Insurance, which in the U.S. protects up to $250,000 and reimburses deposits up to $250,000 per person if your bank fails. So she lost part of her retirement savings but thankfully did not have everything at one bank. And though I was a tween at the time, it made me realize that banks could close. That’s why as an adult, I always make sure to keep my money at an FDIC-insured account.
I also learned from her that real estate was an avenue to explore when investing in the future. Though we did not have many conversations about this, she believed in investing in real estate properties. My mother was also transparent about having life insurance to make sure her family was secure if something happened to her.
4. Give Back
My mother taught me the importance of doing what you can to help other people around you, beyond your immediate family.
When I was younger, my mother told me, “In our culture, you become an adult the day you start helping to support someone else’s children financially.”
So I grew up watching my mother give not only her time but also financial assistance to people and organizations she believed in. It taught me the importance of giving back and the privilege it is to have resources to give to those who need it most.
This year, I celebrated seven years of motherhood. These money lessons I learned from my mother are timeless, and I plan to teach each of these lessons to my three girls. At 7 and 4, they don’t fully understand some of these concepts, but I’m taking small steps to meet them where they are.
Personal Capital compensates Anne-Lyse Wealth (“Author”) for providing the content contained in this blog post. Compensation not to exceed $500. Author is not a client of Personal Capital Advisors Corporation.