"Don't run with scissors."
"Keep your hands to yourself."
"If you could stay out last night, you can get up this morning."
There are pieces of ‘Mom wisdom’ that are so common they are universal. Looking back as adults, some are funnier, some are more practical, but all are good advice. Here are lessons that I learned from my Mom about money.
Live within your means – Growing up, I naturally wanted the newest toys and whatever trendy clothing my friends at school were wearing. Sometimes I got that cool new coat or Barbie doll and sometimes I didn’t. It took me a long time to understand that when my mom said “we can’t afford it” she wasn’t being mean, she was teaching me to live within my means. My mom separated needs from wants so she didn’t spend money she didn’t have.
Know where your money is going - Taking into account her salary and expenses, Mom developed a realistic budget to keep track of where her money was going so she didn’t overspend. Now she’s into her retirement, and I understand why she had extra money to help with my wedding – it was in her budget! Taking control of your spending and knowing where your money is going puts you in charge and reduces stress.
If it sounds too good to be true, it probably is - This lesson was important to learn because no matter how grown up you are, it’s easy to get your hopes up when you hear about something new and exciting, especially when the advertising is compelling. Just like the cookies coming from your Easy Bake oven didn’t come out like the ones on TV, investments that promise high returns with no/low risk aren’t real either.
Little things add up – Many busy families eat out several times per week – not us! My mom taught me that buying lunch or coffee might be a small expenditure, but do it daily, and it adds up. The money you save by not doing these things daily can be quite significant and used for better things. Thanks to compound interest, that $5 a day has the potential to fund your retirement if you start investing it early enough in a TFSA or RRSP.
Just because you have the money doesn’t mean you need to spend it - Just like my mom wouldn’t let me have anything I wanted, she would sometimes say no to a night out with friends or new pair of shoes for herself. Before a purchase, she would always ask “do I really need this right now?” My mom taught me that if you have the money, it’s ok to treat yourself on occasion, but don’t do it just because you have the financial means.
Work for what you want - My mom always saved for big ticket items, from a new appliance to a renovation. I would see her start to cut back on certain things months before, so when the time came to make that big purchase, she wouldn’t have to go into debt. To this day, whether I’m going on a trip or buying a car, I always start saving in advance. I learnt from my mom that planning and saving ahead is key.
Be honest with yourself – I learned from my mom to always be honest with yourself when it comes to finances and money. If you have an unexpectedly expensive month, don’t ignore it and keep on spending - recognize it and rein in your spending next month. Create a plan to get back on track. The longer you wait to do this, the worse the debt will become and no one likes debt hanging over them!
Budget and Planning Tools
Financial Consumer Agency of Canada