Three Things I Wish I Knew When I Was Younger

Yesterday, I wrote about all the things my mother taught me about money. She laid a good foundation for my financial success up to now, and her support and encouragement will no doubt serve me well in the future. The more I learn about financial issues, though, the more I wish I had received a broader exposure to money and investing while I was growing up. I sometimes feel like I'm trying to catch up to other people my age when it comes to financial knowledge and money management skills. (Although, as I've been hanging out on PF blogs a great deal lately, I might have a somewhat skewed view as to just how much the average twenty-six year old knows about good money traits.)

There are several points I particularly regret not learning sooner in my short life:

1) Invest early, invest often - When I started to look into managing my money more actively last year, one of the avenues I considered was investing. My mother, though, expressed numerous concerns with my plans. If I had been encouraged to start investing earlier, I could have a greater investment currently in place (although, given the latest market movements, perhaps it was good that I didn't have more 'skin in the game').

When I have kids of my own, I'm going to do what I can in order to spark an interest about money and investing in them. One specific plan I have is to match their Roth IRA contributions while they're in high school (and possibly college), in a sort of make shift 401(k). This will pass along several important lessons: start saving for retirement as soon as possible, using tax-advantaged accounts allows your money to grow, and when someone offers you free money, you should take it.

2) Network, Network, Network - One of my biggest problems finding a new job has been the lack of a network to utilize as I search. It's tough to find something when you can barely get your foot in the door. I'm hoping my luck will change soon, but at the moment, I wish I had built up a network of contacts before I left school.

I'm working to build up my network now, including planning to go to a few conventions and putting myself out in front of placement agents. I am trying to make friends and contacts in my field (and for that matter, in the world of PF bloggers). It's slow going, especially as I'm normally a shy, withdrawn person, but it's important that I have more contacts, in case I find myself in this situation again.

3) Take advantage of the Internet - Alright, this one is hardly my mother's fault; the web wasn't even invented until 1993, when I was already eleven years old. The idea of setting up a blog, putting up a few ads, and using that as a source of revenue is new enough that I'm not too surprised I'm only now getting started with it.

By the time I have kids, though, the internet revolution will have been in effect for more than a generation; while I won't claim to know what the future of computers will hold, I do know that my kids will need to understand them. I'm going to do my best to spur them to get online and figure out ways of making money, from blogging to producing static websites and other online 'side hacks'. Chances are, they'll be even more proficient at using the computer than me, so perhaps they'll end up showing old Dad a few new ways to make money online.

This is hardly a complete list of what I hope to pass onto my kids (and what I regret I didn't learn about sooner), but it's a decent start, and should inspire me to help my children grow and learn.

Three Things My Mother Taught Me Financially

I give my mother a great deal of credit; she raised me and my two sisters essentially by herself, all the while working full time. She never let us feel deprived, alone or unloved. I'm proud of all her accomplishments and everything she has done.

Some of the most important lessons she taught me involved money. Between her actions in her personal life and what she explicitly told me, I learned a great deal about how to get a handle on my finances and keep my life in balance.

1) Control your spending - One of the first lessons I learned from my mother, I picked up simply by watching her in her daily life. She did spend money, but not on extravagances. She would buy food, resisting temptations of candy and sweets. She took us to the library, encouraging us to borrow books rather than buy them. She enrolled us in low cost after school activities, such as Scout programs, allowing us to socialize, learn, and grow.

All of these experiences that I observed helped to establish the idea of frugality in me. I still tend to keep my spending low, without even making much effort. Many of the tips I encounter about saving money, such as packing your lunches and resisting daily treats (like a Starbucks coffee) come naturally to me, all because of my mother's influence.

2) Save up for what you desire - When I was sixteen, I wanted to get a car. (Well, actually, my mom wanted me to get the car more than I did, so I could take my sisters to school and our other activities, but I still wanted it, as well.) Rather than simply buying me a car, my mother encouraged me to get a job, earn and save the money, and buy the car on my own. Thus began my employment at McDonald's, lasting long past when I actually bought my first car (a 1988 Aries, if I remember correctly; a pretty solid car, especially since I only paid $1000 for it).

From this, I learned that if you are going to make a big, expensive purchase, the best way to do so is NOT to charge it and slowly pay it off while accumulating interest; but rather, to work, spend less than you earn, save the difference, and eventually purchase the item outright. It has been a valuable, meaningful lesson for me, and I am glad I learned it without having to get overwhelmed by debt (as so many other people seem to have done, sadly).

3) Study hard and get good grades - My mother always stressed education. She encouraged us to work hard in our classes and take some of the harder courses. She pushed my sisters and I into the gifted program at our school and motivated us to stand out academically as much as possible.

This might not seem related to my finances, but it's had at least two important monetary impacts on me. First, my good grades and high SAT scores allowed me to start college without having to pay for my tuition, and by keeping my grades high allowed me to continue in the same fashion. I still had room and board expenses, but the savings enabled me to graduate with a relatively small amount of student loan debt, avoiding one of the major pitfalls of the recently graduated college student.

Secondly, that push to learn and study has stayed with me up to this date. As a result, I tend to be cautious, carefully, certain to learn as much as I can about something before jumping in. It is a good approach for many things in life, particularly when it comes to money and investing.

Almost all of my good money management traits are a direct result of my mother's influence.

This is not to say that my mother taught me everything I now know about money; in fact, there are some areas where I wish she had done more. I will cover those tomorrow.