Aug 19, 2021
When it comes to money, parents love offering their two cents (😉). Whether we like to admit it or not, we have a lot to learn from them. Let’s face it — they’ve gone through the ups and downs of managing their money.
Because money management is kinda our thing, we ran a poll at Greenlight: What is one money lesson your parents taught you that stuck with you? Well, the answers are in. And you’re about to be 13X smarter.
This is a financial fundamental. Wants are things like: new headphones, a skateboard, video games, clothes, boba tea. But needs? Shelter. Food. Water. Learn the difference and put it to the test, say, the next time you’re at the grocery store.
“No matter what, set a budget for yourself and track your progress toward it.”
Is budgeting easy? Not always. Is it worth it? Y.E.S. Budgeting keeps us grounded and helps us set goals for our finances. Eventually, your budget becomes a North Star for all of your financial goals.
“Put your savings and investments on autopilot. It’s easy to set up recurring transfers (weekly, monthly, etc.), and it’s one of the best ways to build wealth steadily over time.”
We love putting things on autopilot. It’s not cheating. It’s being smart. Looking for a good place to start? Try Round Ups to add change from transactions right to Savings.
“Earn → set goals → save → invest → repeat.”
Just like routines for school or soccer practice, budgeting routines come in handy. If you can get into the habit of setting savings goals, saving and investing with the money you earn, it’ll become automatic.
When it’s time to get a credit card, it’s important to treat it like a debit card — in the sense that it needs to be paid off in a timely manner. Credit cards can be helpful, but they aren’t for neglecting expenses.
“Growing up in Mexico, I learned: "El dinero no crece en los árboles." (Money does not grow on trees.)”
Once it’s spent, it’s gone. That’s why we set spending limits. We all need a gentle nudge every once in a while — spending limits help us learn when to say “no” to spending and “yes” to saving.
“You’re never too young to invest. Even investing in fractional shares matters. Every bit counts.”
Historically, investing in the stock market has made money over time. The earlier you start, the more time you have to make your money work for you.
“Whether it be savings or investments, pay yourself before you pay your favorite companies for their goods and services.”
Spending isn’t off limits, but it shouldn’t take priority over saving and investing. We all need an emergency savings stash, and investing is the key to building long-term wealth. Speaking of investing, you can use your Greenlight app to get started!
“Set aside money in a place where you won’t touch it. When you see it, you may be tempted to spend it. Everyone needs money for a rainy day.”
A rainy day may mean a car breakdown. Or an unexpected trip to the doctor. Or maybe losing a job. No matter what, we should all store some of our money in a safe place for those “just in case” days.
When our funds are healthy, we may think we can pay for anything we want. While you may be able to pay for more, it’s still just as important to think about the long run — which means saving and investing.
“Simply talking about money and being open about it is a lesson in itself. It doesn’t need to be taboo.”
Money doesn’t need to be taboo at all! The earlier we talk about it, the more comfortable we are with planning, budgeting and managing money.
There’s such a thing as wise purchases. Similarly, there’s such a thing as unwise purchases. Case in point: Buying an expensive watch that will only be worn once or twice is not a wise purchase. But buying a timeless watch (ha!) that will be worn hundreds of times? That’s a smart decision. More of those, please!
“If it’s something you need, buy it. If it’s something you want, wait a few months. Check in with yourself after a few months. If you still want it, THEN buy it.”
What’s an impulse buy? It’s something you buy in the moment. Think: gum, snacks and random trinkets you find in line at the grocery store. It’s usually not a “need,” and it can get you into a habit of overspending.
We all have those lessons that stick with us. And now, it’s your turn to ask your family and friends: What is one money lesson your parents taught you that stuck around? For more money tips, tricks and tidbits, read the rest of our blog.
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