Wednesday, June 28, 2017

Financial Lessons Learned from Others

What types of financial lessons did you learn from your parents or other family members when you were growing up? 

What kind of financial lessons did you learn from your spouse/significant other or friends?

My parents believed, like many Americans, that borrowing money for cars, or a shopping trip to Walmart, was and is a perfectly normal thing to do when they run out of money. Both of them have thousands of dollars in credit card debt. 

My Mother has cable TV for which she pays almost $200 per month for, but she cannot find the money to pay her property taxes or buy food for herself.

My Mother and Father, who are now divorced, both managed to spend every cent they made while working and both retired with no retirement savings. Now they live on what they get from social security and my mother gets a very small pension. 

My ex-husband could spend our last nickle on a pack of cigarettes. It used to drive me nuts. Anytime I would budget or plan ahead for our paychecks he would be upset that I was "spending his money before he even earned it". 

My ex has a history of being financially irresponsible. He put brand new windows, to the tune of over $5,000, into the home that his Dad left for him and his brother. The house is now being sold on the auction block next month for back property taxes, which were only about $250 a year. 

These people definitely had their priorities out of order and are financially irresponsible, and I learned my financial lessons from these people. The only difference is that I learned to NOT do what they did. 

I do not carry credit card debt, I pay all of my bills on time and in full every month. I have both checking and savings accounts, I do not bounce checks, I have investment accounts, and I live frugally and save for the future. I could not imagine living any other way because I could not sleep at night if I were financially irresponsible. 

How about you?

Belinda
~ Living within our Means ~

20 comments :

  1. My parents were likewise harbingers of how NOT to handle your finances and a good life lesson in that way.
    Reversely, I hope I've been a good example to my own kids of how to handle money.

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    1. I think you are a terrific example to your children, Sluggy. I wish my own parents had been even half of the example you've been to yours.

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  2. I have relatives who thought nothing of taking out multiple mortgages on their homes, so they could remodel. I have been surprised by how many people I know think that the money will always be there, that their income is secure due having chosen a specific career. However, things happen, people become disabled and can't work, the economy changes, or the company that they work for restructures. I've watched one couple that I'm close to, who should have "had it all," struggle because they assumed that both of their careers would always be lucrative. Even though they think that they've spent conservatively compared to others, they still overspent their own incomes.

    I think because I came out of the starting gate not having much of an income, I was motivated to save and prepare for unforeseen future events. This other couple had it easy at the start, with two really great careers, in an area of the US that was doing very well, financially. I am grateful that I learned early on that I would always need to prepare for the future. I think it would have been more difficult to have it easy at first then have it all fall apart, than to have just had to work hard from the beginning.

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    1. I will say that my parents did pay off the home my mother lives in now and she has not taken out any other mortgage on it, so that is a good thing. I know people who take out multiple mortgages on their homes too, Lili. You are so right, the money may not always be there or something happens to change it all.

      I think my daughter does well for the same reasons you mention for yourself. She has seen us struggle to get what we have and even things we need, so she is very conservative with her money. I hope that always holds true for her.

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  3. My parents were pretty financially conservative, on a small salary. They paid off their house before they were 40. I don't always agree with how they spend their limited funds, but they don't accrue debt & have a financial planner & do put money behind their priorities. We didn't discuss it much as I was growing up, but it left an impact. I'm very conservative, and risk averse financially. I married a man who is a much riskier investor, but is also financially savvy. We say we balance each other out (in many ways), so while it's caused some friction along the way, overall it works well.

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    1. That's great that your parents paid off their home before they turned 40! It's good that you and your husband and you balance each other out, that's great. :)

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  4. I had positive financial role models,as did my husband. I hope we were good model for our own children, though our oldest tow have way too much student loan debt compared tot heir earning, but they are paying them little by little and have no other credit debt that we are aware of. While we have the travel bug, we are not keep up with the Jone's people. We invest more in experiences than stuff and make what we do have last as best we can. We make loads of mistakes financially, but spending money we don't have is not one of them.

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    1. Not keeping up with the Joneses' has helped us out financially too, Sam. That's a great lesson, spending money we don't have, to pass on to your children. Sounds like you and your dh are being good role models too. :)

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  5. I grew up with two parents from the great depression. My parents ran a manufacturing plant (mold injected plastics) There was no heat in the winter and a/c wasn't even invented yet! LOL. My mom slept on the floor of the factory while she waited for my dad to finish work. We kids had to go straight to the factory after school and help out. Seeing all of this growing up made me the most frugal person on the planet. My mom was frugally good, but I think I beat her out multiple times! My parents wanted to be rich, which they did become multi-millionaires. I just wanted to live like a rich person without the price tag so thus my extreme frugality. I may look like a million bucks but I'm not! You practically have to threaten me to part with any of my saved money! LOL.
    The stories you have sited regarding your family's financial mishaps I found to be frightening. $5,000 for new windows and then you lose the home for not paying a $250 property tax due???? OMFG! I may not have a mortgage BUT I know if I don't pay my taxes my home is history! And the town doesn't take credit cards or late partial payments! I better have that cash and I better pay on time!
    Thanks for sharing your story. I thought about it all day. While I was shopping in WalMart. (I managed to put some things back on the shelves as I was to afraid to buy them!!)

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    1. Yes, Cindi, we were all shocked that he let the house go rather than pay the small amount of property taxes.

      Sounds like you had a great example in both of your parents. And it sounds like you've done a great job managing your finances as well. I do the same thing at the store, put stuff back that I don't need. I just have to ask myself if I need it and then I usually put it back because the answer is usually no.

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  6. My own parents were very frugal, as were their parents. My husband and I continued this way too. Thank heavens we have always been on the same page! Our four children went to outstanding universities and colleges, debt free. My husband has always done all of our auto mechanic work, and we are both great DIY people.

    What has thrown us for a loop, though, is medical. Sixteen years ago, I had breast cancer. Even with insurance, this cost us about $36,000. Now, breast cancer has returned and treatment is more aggressive--five months of chemotherapy, followed by a bi-lateral mastectomy and reconstruction. Fortunately, we have very good insurance this time and will escape relatively unscathed. Nevertheless, we expect the medical bills to top half a million dollars.

    This is the wild card that derails so many Americans. I have seen the stories at the cancer center. All the prudent planning in the world cannot prepare people for these kinds of expenses. They can literally wipe out a family. Yes, we all can do the best we can, but a lifetime of saving won't help even the most frugal in these circumstances. Remember, above all, how much grace is involved! I certainly have. It's very easy to pass judgment, but many, many people are backed into a corner.

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    1. Yours words are so true, Isabella. I used to work in the business office in a hospital and I've seen the medical bills for thousands of patients who were uninsured and it can wipe a person out financially. I'm so happy that did not happen with you in your circumstances.

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    2. It's not just those who are uninsured but the UNDER insured also with a high deductible and a cap on payment. Many insurers have a high deductible as well as paying only up to 80% of the total cost. So if your bill tops half a million, you are on the hook for a lot of hospital bills, even with health insurance.

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    3. Yes, we dealt with many types of patient accounts with all types of scenarios, Isabella. Medical bills can wipe a person out even one with full insurance with medical caps. I believe they have done away with medical caps now though, but my aunt reached hers before she passed away and my uncle ended up having to file bankruptcy because it was so much money.

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  7. Funny you should ask! I'm taking part in a writing competition connected to the Financial Blogger Conference. We had to write short (500-word) articles on the topic of "What Financial Health Means To Me."

    I've been broke and I've been doing fine, but one thing remains constant: frugality. If it's kosher to post the URL, here goes:

    http://donnafreedman.com/financial-health-means-evolution/

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  8. My parents were hoarders. The type you see in the show. That left a lot of damage on me. When my Dad died when I was only sixteen my parents had seven storage units filled with things. Guess where it all went? I don't know either. My Mother never retrieved the items. My Mom is a shopping addict and then she gets violent if you don't give her money. She will attack you for owning things and steals them too. I can't have her in my life any more.

    I don't have any debt. I barely shop. I only go to Dollar Tree, WalMart & thrifting. I have very little bills. I live life simply. I do struggle with things like owning items. I have a beautiful doll collection. I panic that my dolls are clutter. That is unhealthy & very silly too. I think our parents spending habits can make us smart for our own finances and make us have hang ups too.

    That is terrible about your ex and those windows. OMG! What your poor daughter must think! Bless her.

    I bought a home during the recession. I had a $150,000 loan for our home. DH & I bought a home for under $50,000. Our friends thought we were crazy! Crazy for buying a house in the recession. Crazy for buying one so cheap. It is structurally perfect. DH & I can fix it up without taking out any loans. We can afford to do it in cash. We have a lot of insurance on our home. We pay less than our friends who have basic insurance. Our property tax is very low.

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    1. Oh Aiyana, that is so sad about your mother. I can understand why you would not want her in your life. I've had that problem with a couple of people stealing things of mine too. It's very hurtful and I'm sorry that happened to you. :(

      My daughter refuses to speak with her Dad after years of trying to have a relationship with him and his flippant attitude. I tried my best to leave that door open, but unfortunately it did not work out in the end.

      Good for you for buying a home under 50K, that is great! I hope you and your dh have very many happy years there. I love how you life frugally and without any debt. :)

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  9. Belinda,
    I hope you are having a good summer. Tax sales are a great place to get inexspensive homes in some states. Can I just say that you are a great example.
    Patti

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    1. Thank you so much, Patti. That is so sweet of you to say. I hope you are having a good summer too. The temps here are cooler than usual, so I am enjoying that. :)

      Yes, tax sales are a great way to get an inexpensive home. :)

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