Aryn from SoundMoneyMatters tagged with with a meme regarding the what is the Best Financial Advice I’ve ever gotten and from whom? That’s simple.
My mom is the person who gave me the best financial advice I ever got. It wasn’t anything spectacular. Nope, it was simple. Don’t spend more than you make! Period. There is nothing earth shattering, nothing secretive, but plain old common sense.
In fact it wasn’t even about credit cards. As my mom used to say, if you haven’t got the cash for something you can’t afford it. Credit is never a way to buy things. When she became a single parents shortly after I was born, she cut up all her credit cards. If she didn’t have the cash she couldn’t buy it. We’d make it somehow she figured.
That’s not to say years later she didn’t teach me about credit cards, what they were, how to use them, and why people pay interest. Yes she did, however, the mantra buy only what you can afford was still there.
My mom until recently had no idea what a mutual fund was. She never invested, she saved money into a 401k and left it “invested” in a money market account. She did not buy stocks because she had no idea what she was buying. Yet she was able to retire at 55 because of the mantra “Buy only what you can afford, and live on less than you make.”
Common sense advice for the common person. Thanks a lot mom!
6 responses so far ↓
1 aryn // Sep 29, 2008 at 12:21 pm
Wow, your mom is an example for all of us.
2 LivingAlmostLarge // Sep 29, 2008 at 4:32 pm
thanks and I had fun posting.
3 fengshui // Sep 29, 2008 at 5:57 pm
“In fact it wasn’t even about credit cards. As my mom used to say, if you haven’t got the cash for something you can’t afford it. Credit is never a way to buy things. ”
This is a wise way to live. She has a lot of self control. Perhaps if more people did, our country wouldn’t be in this mess.
I DO think that there are a few exceptions. If I know that I can purchase something on a card where I can get 2 years interest free, like if we were to buy a new washer and dryer or a large appliance, I’ll do it that way. Our old washer and dryer are about to die and really are energy hogs. We want to get new energy efficient front loaders, and they really have come down in price, but we don’t want to drain $1800 out of our savings/ EF to pay cash for them. So, we will likely use a Best Buy or some other card that will offer us 1 year or more of free financing and then pay the balance in full prior to the expiration date. Can we afford the washer and dryer? Sure, but in these uncertain times, I want to keep as much in the bank as I can…… DH also wants a new HD LCD tv. We have 1 tv in our house. I’m ok with this. DH wants a 2nd tv in his “man room”. I say that we can’t afford it because we have property taxes due soon, etc. He says that we can just “charge it”. I’m not comfortable with this. We need the w/d more than a tv. He doesn’t see it this way……
4 LivingAlmostLarge // Sep 29, 2008 at 6:10 pm
It depends. My mom also said try not to use student loans. But she didn’t pay 100% so the point is moot.
She meant try to live within your means and college, if you are working (I was) and you still can’t afford college try your best. Racking up more debt is bad.
I have no issue if someone wants to use a 0% CC, I did last year. But it bugged me and I paid it off in 5 months instead of 12 months because of the hassle. More hassle than it’s worth.
And we’ve done a 0% car loan. But that was a fantastic way to build credit for a newly immigrated person.
I still thinking borrowing more than you can really afford a bad idea. But how else can we buy homes? Or even go to college? College is not for the elite.
5 fengshui // Sep 29, 2008 at 8:18 pm
“I still thinking borrowing more than you can really afford a bad idea. But how else can we buy homes? Or even go to college? College is not for the elite.”
I agree. And it is a matter of personal opinion and comfort with debt. I’m not a person who is willing to wait until I’m 50 to buy my first peice of new furniture just so I can avoid using cc’s. I’m exaggerating, I know. But I do know of people who are that frugal, where they had hand me down furniture like couches and chairs until they were 50. Fabric furniture gets so raggedy looking after awhile….. I think that our generation is spoiled though….. ;-(
6 LivingAlmostLarge // Sep 30, 2008 at 8:17 am
I do believe our generation is spoiled. I don’t think that you have to live austerely to be considered not spoiled. There is a proper level of balance.
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