I have a lot to thank my mother for. From her endless patience, to her unwavering support, to her amazing ability to always give the best advice (and uncanny knack to know I need it even before I do), she’s a woman I truly look up to and aspire to be like.
This Mother’s Day, I’ll be thanking her for one more thing: my financial freedom. From a young age, my mother laid the foundation for my healthy relationship with money. She taught me the value of money, and how to value my hard work by spending it wisely. Mom gave me the rules to live my life by and it was these financial lessons I’d need to ensure that my future would not only be stable, but fruitful too.
Get Involved and Stay Interested
Mom kept an open dialogue with my sister and myself about the household finances and how she managed the money she earned. She placed emphasis on understanding how to balance a budget and encouraged us to go out and get part-time jobs in high school and college to see how hard work and time spent converts into dollars. As we got older, she taught us about retirement planning, helped us dip our toes into the stock market and assisted us with our first big solo purchases.
Mom empowered us to take the reigns on our finances, and in doing this, ensured that keeping a stable balance between saving, investing and spending would always be a top priority for us.
Know Where Your Money’s Going and Like It
Mom has always been a big proponent of the good ol’ budget and it really is the key to a financial bill of health. It’s one thing to track expenditures, it’s another to set limits and stick within them. A well-thought out budget considers your salary, your regular monthly expenses, your savings and retirement plans and enables you to be realistic about what your expendable income truly is.
Recording your actual expenditures against your projected ones helps you see where cuts should be made, and will get that money working in the place it will be most useful to you over the short- and long- terms. Taking control of your budget puts the power back into your hands and significantly reduces financial-related stress.
Say No To Yourself (For Yourself)
In our over-saturated consumer market, temptation is everywhere! It’s too easy to get into the habit of overspending on things we simply don’t need because we have the spare cash. Mom’s rule when it came to purchases was to always ask the question: “Do I need this?” and to follow it up with “Could this money be better spent?”
The bottom-line: don’t sell your future self short by needlessly consuming in the present. It’s perfectly ok to treat yourself once in a while, but it’s best practice to focus your spending on things you really need, and to put those savings into an account that will grow along with you.
Set Realistic Financial Goals And Work Towards Them
Mom’s financial mantra is “understand your money.” This translates to three core points: know what you have, know what you want, and know how to get it. Taking time to sit down and plan out your financial goals for 1, 5, 10, and 30 years down the road will give you targets to work towards and will help you prioritize your spending in the short term.
Once you know what your goals are, you need to figure out the best way to get there. Opening an investment account where your money will accrue the returns of the market in the long term is your best bet. Betterment allows you to put your investments on autopilot so you can achieve your goals with ease while focusing on the present.
Fess Up When You’re In Over Your Head
The best money lesson my mom ever taught me is a good life lesson too: be honest. If you’re in over your head with your finances, it’s time to get real with yourself and anyone else involved. Problems like credit card debt, falling behind on your bills, and not being able to afford loan repayments will only get worse if you ignore them. Respect those debts and create an action plan to get back on track. Nobody wants stressful money issues hanging over their heads!
Thanks to my mom, I’ve got the knowledge and tools I need to ensure that when it comes to my finances, I’m in the driver’s seat. I love you, Mom!
How I Managed My Financial Goals When I Got Married
There are many different ways to manage money as a couple. The key is to have open communication, sooner rather than later.
Investing’s Pain Gap: What You Put Up with To Earn Returns
Markets are frustrating—especially when you look at a year’s worth of returns. Year to year, you can easily experience what we call the pain gap. The key is to not let the pain gap create a behavior gap between your account and market performance.
Understanding Joint Accounts
Betterment joint accounts enable two people to share and progress toward investment goals together. We answer questions you have about our joint accounts.
Explore your first goal
This is a great place to start—an emergency fund for life's unplanned hiccups. A safety net is a conservative portfolio.
Whether it's a long way off or just around the corner, we'll help you save for the retirement you deserve.
If you want to invest and build wealth over time, then this is the goal for you. This is an excellent goal type for unknown future needs or money you plan to pass to future generations.