Words From the Wise: Financial Tips From Our Moms

It’s time to celebrate our mothers – the women who nurture us, advise us, know us like no one else, and always have our backs. For this Mother’s Day,  we asked our Freedom Debt Relief team about the best financial advice they received from their moms, and here’s what they said.

Delay and Discipline 

"My mom taught me the art of delayed gratification. It can be really tempting to give in to our desires immediately for something we want. However, this mindset can lead to a short-term perspective that can delay long-term financial goals such as building savings for our retirement.”

“If we learn to deter those impulsive decisions and instead hold out so that we can earn something even greater over time, we can positively impact our financial futures."

Jordan Figueroa, Corporate Trainer

It’s easier to follow Jordan’s Mom’s advice if you make it harder to pull the trigger on an impulse buy. First, put your credit cards away – studies have shown that people are less likely to make impulse purchases if they pay in cash. Second, don’t enable one-click purchasing when you shop online. And finally, sleep on your decision at least a day before buying. Do a little research and make sure the item will do what you want and that you can’t get a better deal on it elsewhere.

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Think Before Spending

“Before you spend your money, ask yourself - is it a 'need' or a 'want.'”

Loretta O'Donnell, Supervisor, Talent Acquisition

Personal finance guru Dave Ramsey is big on defining needs vs. wants (perhaps he got that from his mom?). Needs, says Ramsey, are food, utilities, transportation, and shelter. “There’s nothing wrong, at some point, with having a few toys or eating at a good restaurant once in a while,” says Ramsey. “But again, these things are wants, not needs.”

Balance Your Approach

“Make your own money, then portion to share, portion to save, portion to spend. Also, a separate bank account until you know you and your partner are on the same page financially!

Melissa Whitlatch, Manager, Talent Acquisition

The University of Minnesota has published instructions for creating a save spend share bank with your kids, so you can continue to pass down this good advice.

Prioritize

“There are two really important financial tips my grandma told my mom, and of course, my mom told me: first before you spend anything, pay your tithe! Secondly, after all of your bills are paid, save a portion from each check, you will eventually be able to get what you want and go wherever you want.”

Natosha Edmonds, Senior Corporate Trainer

The popular 50-30-20 rule recommends saving at least 20% of your income each month. But if you can’t save 20%, pick a doable amount and start there. It’s more important to establish a saving habit than to hit a high goal when you’re starting out.

Expect the Extras

“Always leave yourself a buffer because there are always extra costs... Tax, tip, and service fees are seldom remembered but will still cost you!”

Michelle Hudson, Senior Compliance Officer

There are several types of buffer you can build into your finances – including a checking account buffer to avoid overdrafts, an emergency account for unexpected costs, and getting a month ahead on your bills.

Live Within Your Means

“My mom taught me the 10-10-80 rule: Give 10%, save 10%, live on 80%. It was my first example of how to live under my means and has helped me to stay out of debt.”

Alex Enabnit, Sr. Lifecycle Content Writer

If you consistently spend more than you earn, your debt balances will grow – a vicious cycle of overspending that’s unsustainable and hard to escape. Living within your means helps you avoid excessive debt and grow your savings.

Use Credit Wisely

“Always pay your credit card bill in full and on time.”

Reid Levin, Sr Social Media Manager 

Credit cards are good for spending – convenient, safer than cash, and can provide rewards like travel, merchandise, or cashback. You can take advantage of all those benefits and even make money with rewards programs as long as you don’t incur interest charges by carrying balances.

Mindful Spending

“Earn before you spend. Don't buy on impulse and learn to make money work for you, not the other way around.”

Jessica Graham, Social Media Manager

The 1% spending rule can help impulsive spenders stay on track. Under this rule, you have to wait a day on any purchase costing 1% or more of your annual gross income. If you earn $50,000 a year, for instance, and fall in love with a $500 watch, you can’t have it – at least not for a day.

And Finally…

“Don't use your credit card on poker sites, dummy.”

Julien Barbe, Brand Manager, Lending