If you or your mom are a financial badass

[Anonymous]

Personal finance is very simple. I can't believe I even have to say that like several people before me. It doesn't even require much math.
I loved counting money, saving money, calculating change, and shopping as a kid. Never thought that money could be part of my future career as career choices were very limited back in a day.
I never made it my career, but personal finance became my passion/hobby. I have learned a lot from other people's mistakes. I have made plenty myself, but I kept going.
Now I'm almost in control of our family money. My kids have 6-figure UTMa account growing. I never made much money myself, but maximized what I brought in.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:As a child, my dad was a cop and my mom was a PE teacher. They barely went to college. (One went to community college and one finished at age 30).

I was always good at math but did not pursue business undergrad. Went to a top ranked school but majored in political science. Thought I would be a lawyer. Worked in a law firm and hated it. Then got an entry level job in business (.com in the late 90s). I liked it.

Pursued my MBA full time, then have had a career at 3 Fortune 500s. I now know how to invest, mainly because I learned personal finance is not that hard and does not really involve much math beyond percents and the time value of money.

I have a teen daughter now who is very much not into math, but I will help her with personal finance more when she is a young adult.

What more do you want to know?

How can someone totally illiterate financial learn personal finance?

PP here with the MBA. I feel like people overly complicate personal finance. If you want to learn about it, have confidence in yourself that it's not that hard.

1) Go to the personal finance section of the library. SO many good books. My personal favorites are A Random Walk Down Wall Street (summary - stock markets have had bubbles since the Dutch tulip craze, and buying and hold the broadest swatch of the market is the best return for the least amount of risk.) and Personal Finance for Dummies, but also books by Jean Chatsky, Dave Ramsey, Michelle Singletary, Suze Orman, Ric Edelman, etc.

2) there are so many great and free online sources of QUALITY personal finance advice. I'm not talking Game Stop stock tips or day trading. I'm talking Bogleheads, NerdWallet, Wise Bread, Get Rich Slowly, etc. Reddit Personal Finance also has SOME reputable stuff.

3) there is a Netflix series I will Teach You To Be Rich, by Ramit Sethi, and he has a book by the same. Some great stuff in there. There are other TV shows like Suze Orman and Til Debt Do Us Part, and there are some great podcasts like Smart Money, etc.

4) Take a community college course on personal finance. Totally worth it to learn the basics.

5) Don't pay for investments you don't fully understand. (Example - annuities - they typically have complicated contracts and don't return much relative to their fees, but vulnerable people buy them for "guaranteed" income, not realizing that the costs eat into their returns.)

6) Find reputable financial planners at napfa.org

It's like anything you have to learn - give yourself some modest goals (I will read 1 personal finance book each quarter) and see how you do this year.

For what it's worth, I'm terrible at sports, so I'm doing my exercise and personal fitness version of this slowly and with reputable sources, and just letting myself be bad at it at first but am gradually getting better.

Hope this helps you.

May I ask how you are applying this approach to educating yourself about personal fitness?

So my approach to fitness in the same way:

Let my ego go. I’m better at math than fitness, but everybody starts somewhere. Just like there will always be someone richer than you or someone who was born with more money, they will always be someone fitter, stronger or better looking than you. Do the best with what you have.

Ask questions. Again, let the ego go.
Read and absorb a lot about the topic. There are lots of resources but only some are reputable. Question the source of everything. A nutritionist or dietitian is probably better than an instagram post.

Give yourself small, measurable, consistent goals. For me it was joining a weightlifting class, which I have done consistently over 100 times last year, up from 0 the year before. This is the same principle as pay yourself first, dollar cost averaging, and auto debiting to invest in personal finance.

[Anonymous]

Please share more stories!

[Anonymous]

My mum went to community college, lived with her parents until she married by dad at 24, worked until she had her first child at 29, and went back to work in her 40s after her youngest turned 10.

She would never say it directly, but I know she wished she had more independence in her youth (financial and otherwise). She never lived alone or even with girlfriends before moving in with my dad. I probably wouldn't exist if she'd had that independence but I still whish she had had that chance. I know living alone and making my own choices in my 20s changed by life for the better. She raised her three daughters to be self-sufficient and financially literate because she wanted us to have every opportunity and self-determination that she did not. In her words, "you can always marry rich, but you'll work for it every day."

Financial things she taught us/did for us:

-% of any money we got from birthdays, etc. went straight into our individual savings accounts. That money was ours and she would show us the totals but we weren't allowed to pull anything out until we graduated from high school.

-Any major money (in our case, first holy communion and confirmation) went into CDs so by the time we were leaving for college we each had nice nest eggs to use for cars, expenses while at school, etc.

-Added us to one of her credit cards and allowed us to use it for very specific expenses (gas and running pre-approved family errands). This made it so we all had stellar credit scores very young. I'm only in my 30s now have a 20 year history of great credit because of this. This was part of the reason my husband and I could jump on the housing market when rates were so low despite us not having a huge down payment.

-Taught us how credit scores work, importance of paying in full, only spending what you have, etc.

-We all worked jobs starting in high school and that money was 100% ours. She showed us how to budget for things we wanted, save up over time, etc. but the money was ours. She wanted us to feel how amazing it is to earn for yourself and control that money.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

My parents moved from blue collar working class (my dad was in construction and my mother a teacher) to very solidly middle class and they retired upper middle class. They continue to live frugally with an eye toward their elder care needs and a desire to not be “a burden” to the younger generation.

I love this.

That so quaint. I don’t mean it to be rude. I mean, a couple now _doung exactly _what your parents did will never get such financial security.

I hate how expensive basic life is. The greatest, silent & boomer generations all advanced. For our generation it’s big law, real estate investments, trust funds, big tech but the rest are living pay check to pay check.

I disagree. You just have to live below your means. Not care if you have as nice a car as other parents. Don’t choose your child’s college based upon USNWR ratings (rather where they get good merit aid). Don’t vacation in Disneyworld. Hike together. Cook together. It is very achievable if you are not chasing external validation.

[Anonymous]

I learned to embrace financial risk and pick my own stocks. I am 100% in high-tech stocks, and for 20 years, this has worked very well for me. I live off dividends.

[Anonymous]

My mom was a doctor, while my dad was a professor. She out-earned my dad by a lot, but she also had the more rigid schedule, so it was my dad who came to the PTA meetings, did the after school pickups, etc. I also spent a lot of time growing up in daycare.

From that experience, I learned that dads can be just as good as moms at being the primary parent and don't have to feel emasculated while doing it, that moms can work full-time and use daycare and can still bond strongly with their kids and their kids will turn out well, how to organize the house/family with 2 working parents, and that if you're a girl like me, seeing a strong mom like mine is inspiring.

[Anonymous]

Anonymous wrote:My mom was a doctor, while my dad was a professor. She out-earned my dad by a lot, but she also had the more rigid schedule, so it was my dad who came to the PTA meetings, did the after school pickups, etc. I also spent a lot of time growing up in daycare.

From that experience, I learned that dads can be just as good as moms at being the primary parent and don't have to feel emasculated while doing it, that moms can work full-time and use daycare and can still bond strongly with their kids and their kids will turn out well, how to organize the house/family with 2 working parents, and that if you're a girl like me, seeing a strong mom like mine is inspiring.

+1!

My mom was a business VP and outearned my dad. Like a different PP we were first at daycare and last to leave BUT like this poster experienced, my mom was still an amazing, bonded mom to us. It was very much a quality over quantity and as an adult inspiring and comforting example as a new mom who is hanging on to a big career.

[Anonymous]

My mother gave me one piece of advice when you marry you handle the finances.

If your betrothed won’t do this run .

Yep only good advice she ever gave me.

[Anonymous]

My mother is the reason I've been able to achieve so much in life. She had no income or money of her own and was controlled by my father. Every month, he would give her an envelope filled with cash, and that's it. I've made major life decisions to avoid becoming her. I've been interested in personal finance since I lived under my parents’ roof, and I've had a good career and investment portfolio.

[Anonymous]

Anonymous wrote:
I learned to embrace financial risk and pick my own stocks. I am 100% in high-tech stocks, and for 20 years, this has worked very well for me. I live off dividends.

Can you recommend any resources (books, webpages) to learn to pick stocks ?

[Anonymous]

Anonymous wrote:My mom didn't work outside the home, but she managed the heck out of what my dad brought in. He had an average income, and we had an extraordinary life. Not stuff that can be bought like high-end vacations or riding lessons or top shelf toys. But experiences and skills and social abilities.

I learned everything I know about money management from her. The lessons I would share (and do share with my kids) are:
Never spend money you don't have (no car loans, no student loans, no credit card balance-- the mortgage is the exception of course.)
Evaluate every impulse purchase by the metrics of how long will it last, what impact will it have, and what else we could do with the money if we just wait a bit.
Brand names are always a waste of money. If you're wearing a logo, the company should be paying you for the advertising space!

Your mom taught you well. My parents never had a credit card until their 60s. Unbelievable in today’s time. I tell my kids to really question those impulse buys, wait a week and see if you still really need/want that item. For me, I usually forgot that I wanted it. (I hate splashy logos , your mom’s advice made me smile)

[Anonymous]

Anonymous wrote:Great thread.

My parents grew up poor and had good middle class jobs while I was growing up. Neither had any financial savvy - or any interest at all in gaining wealth. They both lived beneath their means and invested in retirement but that’s where it ended. I see tips on social media about setting up certain accounts for kids and how it becomes millions for them later or how to reduce taxes when you die and I don’t know any of these things. I now realize we made a lot of mistakes too.

Same here. Similar experiences and I’m getting interested in personal finance a bit late in the game and I’ve made mistakes also. Growing up, money wasn’t really discussed, we just all knew that we couldn’t overspend and money doesn’t grow on trees. My daughter is in college and is already more knowledgeable about finances and investments than me.

[Anonymous]

I feel like I'm pretty good at personal finance. The key is to set things up to remove temptation to a) spend all your money or b) make risky investment buy or sell decisions based on greed or panic, which leads to buying high and selling low.

1. Spend less than you earn, automate moving money to savings.
2. Invest at least enough in your 401k to get the full match. Invest it in a retirement target date fund or index funds. Increase the amount you save until you're at the max.
3. Don't buy a house unless you'll be able to stay in it at least 7-10 years to avoid the risk of having to sell at a loss.
4. If an investment is hard to understand after a little bit of research, don't do it. Also stay away from buying individual stocks unless you're using "fun" money and treat it as a hobby not your source of retirement security.
5. Shop around for rates on savings/CDs and loans.

[Anonymous]

I handle my family's finances, but it's not because of my mom in any way. I was exposed to it from my dad and my grandfather. They taught me the basics of saving and investing when I was a teenager. They always had a "live within your means" mentality.

My DH is the type to put everything in a savings account and not think about it, so it was natural for me to handle our finances.

My advice to someone who wants to learn more is just to lurk on boards like this or bogleheads. Like a new language, sometimes immersion is the best way to learn. You'll see lots of good advice (like in this thread) over and over again, and soon it becomes ingrained.