The Top 5 Money Lessons I Learned from Mom

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With Mother’s Day (and my mom’s birthday!) coming up this weekend, I’ve been thinking a lot about Mom and everything she’s done for me, my sister, and my brother. Sure, love and nurturing, and all that sentimental stuff. But also the stuff I’m much more comfortable talking about: practical life advice 🙂

So in honor of mothers in general, and my mom in particular, here are the top 5 money lessons I learned from Mom. And how you can apply them to your life!

1. Education is always a good investment

Mom pushed education. Hard.

Grades weren’t the most important thing in the world, but it was important to her that we made an effort at school. And she fully expected us to continue our educations after high school.

See, mom came from the generation where college was much more of an option than the semi-necessity we’ve turned it into today. She and Dad got married right after high school (like you did in the olden days…) and started a family. She took some courses at the community college because she genuinely liked school and enjoyed learning. But it wasn’t her priority with 2 kids and a full-time job that didn’t require a degree.

When my sister was little, mom decided to really focus on her education and pursue her Associates Degree. But then my brother was born, and suddenly the kids outnumbered the parents, so Mom’s formal education was put on hold again.

But she didn’t stop. She kept after it, and finally got, not only her Associates, but her Bachelor’s Degree, decades after graduating high school. And now she’s the Program Director for ABC AmeriCorps in Northern IL.

The moral of the story is…education is always a good investment and it’s never too late.

And here’s anther thing: Mom is a life-long learner. Learning doesn’t stop at college! Invest in courses and training throughout your life to always be learning and growing.

Mom’s always attending seminars and new courses. And now she’s teaching some of them too!

Invest in Your Education

Now, Mom and Dad helped with some of our expenses while in college but didn’t pay the whole bill for any of us. And I’m really glad they chose to do it that way. Paying for my own education made me appreciate it more. If I was paying that money, I was going to learn, darn it!

There’s a lot of gloom-and-doom talk about student loans. But really, if you need a 4-year degree (or more!) to be competitive in your chosen career, student loans are a life-saver! They’re the only legit way for most of us to pay for school.

So don’t be afraid to take on some student loan debt. Statistically speaking, your degree should pay for itself in terms of higher pay rates for degree-holders. Just don’t over-do it. Don’t take out loans for living expenses. And don’t delay paying your student loans after graduation. You want to pay off as much as you reasonably can as soon as you reasonably can to avoid paying unnecessary additional interest.

To learn more about how student loans can be “good debt”, check out 4 Ways to Use Smart Debt to Improve Your Life.

2. But you don’t have to pay inflated university tuition

To clarify: education is always a good investment doesn’t mean you can justify over-spending on inflated university tuition. Especially for a degree you probably won’t use.

Mom super values education, but it doesn’t have to come in the form of a traditional college degree.

In fact, she’s a serious advocate for community colleges, where you can save a small fortune! Seriously, why pay $50,000/year for the first two years of college when you’re doing mostly gen eds and are relatively likely to change your major anyway?

And Mom gets that college isn’t for everyone. Maybe you’d prefer to learn a trade at a vocational school. Unlike traditional higher education, vocational schools focus on getting you to your specific career goals faster. No more gen eds. Just career-centered training so you can start earning. And maybe even be your own boss!

Save on Your Education Costs

Seriously consider community college if you want to get a college degree, but don’t want to be paying student loans into your 40’s.

Want more ways to save on your education? Check out our Top 7 Ways to Save Big on College!

3. Be smart about insurance

Mom actually worked in the insurance industry for years. So she knows insurance. Which is great because I suck at understanding insurance.

Insurance is a huge topic because there are so many types of insurance: auto, home, renters, medical, dental, vision, disability, life, etc.

But the basic idea behind insurance is that you pay a small-ish amount periodically (every paycheck, monthly, whatever), and your insurance policy will pay your large bills when you need it.

So, for example, you have car insurance. You pay $100/month (totally varies depending on your age, driving record, vehicle value, etc). If you’re in an accident that does, say, $7,000 damage to your car, your insurance policy will cover almost all of that cost.

I’m not gonna pretend to be an expert on insurance. But, thanks to Mom, I know enough about it to get by.

Here’s what I’ve got:

• Insurance, in general, is good because it offers some basic financial protection when life goes wrong.
• But it’s all about balancing risk. If you’re low-risk for something, it doesn’t make much sense to pay for a policy that you aren’t likely to use. Like life insurance. Life insurance pays your family if you die. So if you’re young and don’t have a family to support, it’s totally unnecessary.
• And not all insurance is smart. Earthquake insurance, for example, is basically a scam unless you’re a billionaire with crazy high-value property. It costs a fortune every month, but you would still have to pay a fortune out-of-pocket before the insurance would pay you a dime in the event of an earthquake. I understand that I will be screwed if an earthquake destroys my LA house whether I have earthquake insurance or not. So I choose not.

Make Sure You’re Covered

So what kind of insurance do you need?

If you drive a car, you’re legally required to carry auto insurance.

For 2018, medical insurance is still a legal requirement for Americans, but it won’t be legally required starting in 2019. For most other countries, medical insurance is legally required. Regardless of legality, medical insurance is a good idea because you just never know when you might get sick or injured.

If you rent, you should absolutely get renters insurance. It’s super cheap, and it covers all your belongings in case of theft, fire, water damage etc. Many apartment communities now require residents to carry renter’s insurance.

If you own a home with a mortgage, your lender will require you to carry homeowner’s insurance. Again, this is a smart insurance whether or not it’s required.

Dental is a good idea because it’s fairly cheap, and a single crown can cost a few thousand dollars.

If you have vision issues or they run in your family, you may want to get Vision.

Consider Disability, especially if your work or hobbies put you at risk of disability (riding motorcycles, skydiving, hard labor workers, serious athletes, etc).

Now, when you’re choosing your insurance plans, you need to understand 2 important definitions. Your “premium” is the amount you have to pay for your policy. And your “deductible” is the amount you have to pay out-of-pocket before your policy will pay anything.

So you want your premium and your deductible to both be low. But they don’t work that way. You can usually pay a higher premium for a lower deductible or a lower premium for a higher deductible.

If you’re on a tight budget and don’t think you’re super likely to actually need to use your insurance, but you want it just in case (or you’re legally required to have it), stick to a lower premium with a higher deductible.

4. How to save

Mom loves to tell the story of how she saved money working at Kenny’s Shoe Store in high school so she was able to buy a brand new living room set when she got married the summer after graduation. None of her friends had saved any money, so they all had to deal with hand-me-down, miss-matched furniture.

Apparently I take after Mom. Because I saved a few thousand dollars working at Video Village my Senior Year, which was enough to launch a new life across the country (with some serious help from Grandma and Grandpa anyway) after high school.

The saving bug was instilled early.

Did you get an allowance growing up? I got like $5/week. But the stipulation was that 10% had to go to tithing and 10% had to go to saving. So saving became a habit. Something I just did without really thinking about it.

And let me tell you, that’s the way to save!

Start Your Own Savings Plan Today

If you’ve never built your own saving habit, it’s not too late.

In fact, we have something today that can actually fool-proof your savings! No willpower required!

It’s called automatic transfers. When you open a savings account, you can schedule automatic transfers from your checking account every pay day. So without lifting a finger or giving it a single thought, you’re saving money every pay period!

Don’t wait another day! Open a savings account online and start building your savings right now.

5. Being organized will save you time, money, and frustration

Mom handles the family finances. Which is weird because Dad worked at a bank for most of his career. But I guess after stock-brokering all day, he didn’t want to handle finance on his personal time. So Mom has balanced the checkbook (which was a thing before online banking), paid the bills, and (at least in recent years) filed the tax returns.

And the way she manages it all is by being organized.

Being organized saves time. No more wasting time looking for lost bills.

Being organized saves money. Have you ever had to pay a late fee because you just plain forgot to pay a bill? That’s where a little organization can save you a lot of money.

And being organized saves you from serious frustration. Think about filing your tax returns. *Collective groan*. Even if you have a pro handle it for you, you have to give the pro your income and expenses to work with. Having your finances organized will ensure that you can easily provide accurate numbers to maximize your tax refund.

Boom, you just saved time, money, and frustration, all thanks to some basic organization.