Sometimes I wonder if anything I say to my kids is actually getting through to them. I’m encouraged, however, by the fact that I now find myself saying the same things my parents used to say and doing the same things they used to do. It’s both encouraging and scary. I mentioned last week that I’m taking a Dale Carnegie class at work. We were recently discussing how to give compliments, and that reminded me of something my mom would often tell us growing up: Never suppress a generous thought.
That led me to think of the other things she used to say as I was growing up such as nothing compensates for good, clear communication. She also often reiterated that everything works out.
As I thought about these life lessons from my mom, my mind switched over into personal finance mode, because as we know, everything in life can be (and should be!) applied to personal finance.
1. Never suppress a generous thought
My mom is constantly building up others. Looking for the good in others is now a part of who she is. When you look for the good, you find it. And when you find it, you ought to share it. How many times have you had a complimentary thought about someone? Just think how little effort it takes and yet how powerful it is to simply take the next step and share that compliment.
The finance lesson in this for me relates to not being unnecessarily cheap. One of my favorite personal finance themes is that of not sacrificing memories in favor of saving more money.
This past weekend we took a fairly spontaneous two-night trip to see some sites. I took a day off of work, and we headed westward. We packed our cooler for picnics to save some money, but we did go out to dinner as a family one night (we had points for the hotel).
The gas and dinner were all unbudgeted, but the experience and the memories far outweighed any potential extra savings had we not gone. I mean, look at these 3, not fighting and even smiling! Definitely worth paying for!
Given where we’re at in life and on our baby steps, I feel totally fine about doing this type of thing occasionally. The degree to which you are able to loosen up financially totally depends on your situation. For some, the best thing might be to do the opposite.
But in general, if you have the urge to make a charitable donation or to spend money on some family memories, it’s probably worth it.
2. Nothing compensates for good, clear communication
This phrase was inevitability repeated by my mom after the resolution of every misunderstanding. Conflicts that arise from unmet expectations, incorrect assumptions, misinterpreted messages, and unnoticed hints are usually preventable. The solution is effective communication. It reminds me of the movie (or play, for the more sophisticated bunch) Much Ado About Nothing.
My wife and I have rarely argued about money. There are plenty of other things we argue about, but money is usually not one of them. I can only speculate that this is because we were raised in similarly frugal households.
That does not mean, though, that there is no need to communicate about money. We still align on a budget each month, even if only for a few minutes. We know what our financial goals are, and we discuss it if we think they should be different.
Communication is essential to preventing arguments about your finances. Here are 3 key elements of successful communication about finances:
- Be transparent – It’s tough to have an intimate relationship with your spouse if one of you is not being transparent with finances.
- Agree on a budget – Agreeing on a budget gets you out of trouble. You don’t have to be the “bad guy” by disagreeing with your spouse about a purchase. Just tell him or her to consult the budget to see if there is any room for additional purchases.
- Understand each other’s money mentality – The way people feel about money is largely a result of how their parents treated the subject of finances. Talking about it will help you form a new family finance mentality that works for you.
It’s also good idea to set a dollar amount that your purchases can’t exceed without first talking to your spouse. One of my summer jobs in high school was selling knives. I gave my sales pitch to a lady who wanted to buy, but she told me that she and her husband had an agreement to discuss any purchase greater than $500 (hey, they were awesome knives) beforehand. Even though I wasn’t able to close the sale because of that darn marital financial agreement, I was impressed at how financially unified it made them seem.
3. Everything works out
Now that I’m an adult (this is debatable), I wonder why I used to stress about certain things as a kid. But on these occasions, I vividly remember my mom telling me that everything works out.
I remember arguing with her on this one. I tried to prove to her that things do not always work out and that her optimism might be a little unfounded. Her response, however, was the ultimate one-upper and made a significant impact on me. She repeated to me that “everything works out, and when it doesn’t work out, it still works out.” As simple as it may sound, it blew my mind as a teenager.
It seems that the more life experience I gain, the more I can see the truth behind what she used to say. There are times when something we want badly and have worked hard for does not materialize. In the process, though, other doors are opened and new opportunities inevitably present themselves.
This principle is easily applied to finance.
In 2008, I was laid off from my first job out of college in public accounting. From my perspective at the time, things were not working out. But I was able to find a new job within a few weeks that paid more and gave me more flexibility. Working more from home gave me more time to study, which facilitated my plan of going back to school for an MBA, which landed me making even more money at a company I like in a place that we love. This is a classic case of it not working out but still working out.
I’m currently reading How to Stop Worrying and Start Living, a Carnegie classic. He talks about preparing yourself mentally to accept the worst case scenario and taking action to improve upon it, which I think closely relates to “things not working out.”
Listen to your mother!
It’s amazing to realize how much my parents are in my head (especially now that I have kids of my own) and how much they can teach us if we actually listen. Heck, my mom has been teaching me things all my life that my work is now paying $900 for me to learn in a course.
What things did your mom (or dad) “always used to say” that you can apply to personal finance?