My mom passed away 10 years ago. She never had the chance to meet her granddaughter, but she did leave a valuable inheritance for my daughter and our entire family for generations to come.
Before you jump to the wrong conclusion, Mom wasn't rich. Like many people her age, she had a decent-sized nest egg that she fussed and worried over in her retirement years, especially when after her 70th birthday her battle with cancer forced her to stay at home. As it turned out, her savings proved sufficient to cover her own expenses with something left over for my brother and me.
The most valuable thing Mom passed along was not the money, but the lessons she taught us about money and its importance in living a well-balanced life. These are lessons we'll pass along to our children and hopefully they'll do the same.
Inheriting good sense
A kid and his money are soon parted, especially when there are toys and other temptations to be had.
And so it was in our household. But Mom let me make my own financial mistakes as a child, and by doing so she achieved the far greater goal of giving me a healthy skepticism about overhyped products and the people who tried to sell them to me.
From Star Wars figures to deferred-load mutual funds, Mom somehow got me to appreciate my own ability to manage my money and was more and more confident in me as time went by.
As the years go by, I never stop learning new things about money and investing. It's that desire for knowledge that is my mother's greatest gift. If you have the drive to learn, you can do anything you want with your money.
From my mom to you (or yours)
I fondly think back on many things my mom used to pound into my brain. Let me share some of her wisdom:
Save, save, save. From having your kids gather pennies and nickels to setting up their very first savings account, teaching your kids the power of not spending their money right away will pay dividends throughout their lives.
Steer clear of fees. Mom never liked the idea that her broker was making more money on her account than she was. If you agree, learn to use discount brokers and no-load mutual funds to keep more of your money. Your broker won't like it, but your family will love it.
Be conservative. Playing it safe may not be the most glamorous way to manage your finances, and it doesn't always produce the best returns. But if you can save enough, you don't need to gamble as much on whether aggressive stock investments will pay off. Moreover, planning for a less favorable rate of return may help you through unanticipated tough times, such as the meltdown in the financial markets five years ago.
Stay out of debt. Except for her mortgage, Mom didn't believe in debt. Her idea was that if you couldn't pay cash, you just hadn't saved enough yet. Although avoiding credit entirely is a no-no in today's financial world, in which having a good credit score is essential for everything from finding a place to live to getting your next job, not taking on unnecessary debt is still good advice.
Take care of your family. Mom did her best to take care of her financial affairs before she died, and in the end, she did a good job. Your family deserves the same, whether it's a simple will or more complicated estate planning.
It's simple advice, but it can have a profound effect on your family. My daughter may never realize where those lessons originally came from, but I know she'll get a lot out of what my mom taught me.
Thanks, Mom, and happy Mother's Day.