Author Topic: Grandma's wisdom: What's the best money lesson you've learned?  (Read 5978 times)

Mortgage Free Mike

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Grandma's wisdom: What's the best money lesson you've learned?
« on: February 20, 2014, 02:45:27 PM »
I was thinking the other day about the money-saving advice I got from my Grandma.  She always told me to get a 15-year mortgage.  I didn't do that the first time I bought a house, but the second time I did. As you can tell from my screen name, it worked out. No more mortgage payment.

I chatted with her today and learned more about her financial life. She told me she regretted buying a timeshare and called it a bad investment that no one should make. In fact, she's still stuck with the timeshare and in the process of giving it away.. not even selling it.

What's the best money lesson (good or bad) you've learned from a family member?

greenmimama

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Re: Grandma's wisdom: What's the best money lesson you've learned?
« Reply #1 on: February 20, 2014, 02:48:57 PM »
My mom and dad taught me very early on to not take on debt, I took it to more of an extreme than they did even, but I am better off with the start they gave me in life for sure.

We have never had student loan debt, car debt, and we hope to be mortgage free here within the year.

Thegoblinchief

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Re: Grandma's wisdom: What's the best money lesson you've learned?
« Reply #2 on: February 20, 2014, 03:52:35 PM »
Don't think I got much of any money wisdom from my family.

All the best lessons have come from MMM and the extended FIRE community, but if I had to pick a single one that floored me, it was the famous "Shockingly Simple Math of Early Retirement" post.

MicroRN

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Re: Grandma's wisdom: What's the best money lesson you've learned?
« Reply #3 on: February 20, 2014, 04:08:37 PM »
I had the interesting case of growing up with a bankruptcy judge for a father.  I'll be honest, I didn't get much info on long term saving/investing, but I sure got a lot on avoiding debt.

MEDICAL INSURANCE - and it can be worth paying more for one with higher caps or smaller OOP percentage.  It takes one medical disaster to slash through the normal family's savings, even with insurance.  The average cost of a single day in the ICU is around $4000, and most insurance companies pay a max of 80%.  That doesn't include the cost of procedures, surgeries, and tests.  The majority of cases my father saw were employed families with health insurance and minimal consumer debt, but they had a complicated pregnancy, NICU stay, or major injuries from car accidents that took them out of work.   

Weigh debt carefully.  That doesn't mean you should always avoid debt, but consider what you'll get out of it.  I took out $6500 in loans to increase my yearly salary by almost $30K - I consider that worth it.  We don't pay for luxuries on credit.  When we bought a new TV, it was because we actually had the cash available.  When we buy a house, it'll be with at least 20% down and will be a 15 year mortgage. 

And on the lighter side... Don't max out your credit cards gambling, send in bad checks to pay the cards, then as soon as the money is credited, immediately pull a cash advance and keep gambling! 

tmac

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Re: Grandma's wisdom: What's the best money lesson you've learned?
« Reply #4 on: February 20, 2014, 04:11:56 PM »
My grandmother worked full-time from age 22 (after college) until she died at 94. She started with nothing, worked hard and lived beneath her means. She lived simply, but traveled the world and had plenty for long-term care at the end of her life.

The ONLY thing she ever actually told me about money: Don't own a car.

She never did and said that was the reason she was better off than many of her friends. She walked and took public transportation.

Sounds familiar. :D

Mortgage Free Mike

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Re: Grandma's wisdom: What's the best money lesson you've learned?
« Reply #5 on: February 20, 2014, 06:44:28 PM »
Tamara, I think that's awesome and I bet not having a car kept your grandma in good shape too.

Cincy Stache

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Re: Grandma's wisdom: What's the best money lesson you've learned?
« Reply #6 on: February 20, 2014, 06:49:33 PM »
Mom: "save half, spend half."

EngineerMum

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Re: Grandma's wisdom: What's the best money lesson you've learned?
« Reply #7 on: February 21, 2014, 06:51:23 AM »
From my Grandmother, via my mother - have your own money. When Grandpa died suddenly, Grandma couldn't access any of the money in their accounts, and it happened when she was on the other side of the world from home. Luckily, she was staying with my parents and they were able to support her until all the paperwork was sorted out.

From my Granny, via my father - be capable of earning your own money. Grandfather was injured in an industrial accident and she had to earn enough to raise 5 children.  She had to work well into her 70s as a result.

Basically the women in my family have taught me to be independent and never rely on a husband. It's stood me in good stead as DHs PhD stretched out from 3 years to 6, and academic jobs have been in short supply.

lackofstache

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Re: Grandma's wisdom: What's the best money lesson you've learned?
« Reply #8 on: February 21, 2014, 08:00:23 AM »
My grandfather and dad both taught me to "make your own shit." My grandfather built his own house, put in plumbing, made all of the furniture in the house and so on. Every shelf, tv stand, etc. in my parents' house was built by my father. Neither my dad or his dad gave much advice verbally, but they showed a lot through their actions. I may've been the only one in my family to pick it up, though.


lexie2000

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Re: Grandma's wisdom: What's the best money lesson you've learned?
« Reply #9 on: February 21, 2014, 09:39:24 AM »
The only verbal advice that I got was from my parents.  They repeated over and over again not to pay interest on anything but a mortgage.  That was back in the day when there were no 0% car loans though.  I did learn frugality from watching my mom.  She looked at the grocery ads every week, planned her meals around what was on ad, and stocked up when a pantry staple was on ad as a loss leader.  She also did things mustachian like avoided use of the clothes dryer, reused as much as possible, etc.

From DH's side, his dad said, "Man makes money and money makes money."  He also preached about not stretching yourself too thin when buying a home.  So when we purchased our first home in 1985, even though we had the down payment for and could afford something that cost twice as much, we found a home where our 20% down was $25K, leaving us with another $25K in a taxable account that we added to and which served multiple purposes:  EF, money that we would use if we needed to replace our car or an appliance,  investment opportunity money, etc.

The words of wisdom that we each took from our respective families helped us live in a state of financial security from a fairly early age.

Blackadder

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Re: Grandma's wisdom: What's the best money lesson you've learned?
« Reply #10 on: February 21, 2014, 10:04:56 AM »
I learned  a lot from my family through their actions, not their words.

From my father I learned that windfalls are for spending them on hobbies, and that it's smart to splurge on special offers that you never knew you needed. Also, only save money using products like life insurance, because you can't beat their return. Keeping lines of credit around is smart, too. If you are not spending your money and taking care of your savings, you're "greedy", and saved allowance can be taken away from you (if you haven't spent it, you obviously didn't need it, right?). From my mother I learned that putting all your hard-earned money on a shared account is ok, even if all that money is being spent by your non-working partner and there's nothing left for yourself. From my grandparents I learned that you should trust your family and keep giving them your money, even if you will never get paid back and people keep lying to you about what they need the money for. From my siblings I learned that money is a means of having fun with friends, and everything else is secondary.

Pretty thorough lessons, all in all. This led to my wife and me each having an independent career, having one's own money, currently saving almost 50% of our income, and no debt besides mortgage. I think I should be thankful for the lessons, and in a way, I am.

Edit: Re-reading my post, I'm sorry for giving this positive thread such a sour taste! I guess I was in a pretty bad mood when writing this story. I also have some very lovely relatives!
« Last Edit: February 22, 2014, 10:05:30 AM by Blackadder »

Peter

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Re: Grandma's wisdom: What's the best money lesson you've learned?
« Reply #11 on: February 21, 2014, 03:54:56 PM »
From my father I learned that windfalls are for spending them on hobbies, and that it's smart to splurge on special offers that you never knew you needed. Also, only save money using products like life insurance, because you can't beat their return. Keeping lines of credit around is smart, too. If you are not spending your money and taking care of your savings, you're "greedy", and saved allowance can be taken away from you (if you haven't spent it, you obviously didn't need it, right?). From my mother I learned that putting all your hard-earned money on a shared account is ok, even if all that money is being spent by your non-working partner and there's nothing left for yourself. From my grandparents I learned that you should trust your family and keep giving them your money, even if you will never get paid back and people keep lying to you about what they need the money for. From my siblings I learned that money is a means of having fun with friends, and everything else is secondary.


Oh god that's got to be one of the most damaging things I could imagine a parent doing to their kid in regards to giving them proper life lessons about money!

Glad you turned out OK Blackadder.

zachd

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Re: Grandma's wisdom: What's the best money lesson you've learned?
« Reply #12 on: February 21, 2014, 09:32:35 PM »


My Grandma started buying stock including IBM in the 60's.  When she passed she left close to a million and a half to her kids and us grand kids.  I didn't really know much about her savings though she didn't really impart that wisdom to me.  I think I take more after my dad's side of the family they are a little more live life, don't think about tomorrow.

But she did always say you have to keep learning new things. I know she's right on that but I have a hard time with learning new things that are job related because I'm not really that in to my job.

She also said "A person needs to eat some meat every now and again".

MrsPete

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Re: Grandma's wisdom: What's the best money lesson you've learned?
« Reply #13 on: February 22, 2014, 06:49:53 PM »
My parents didn't teach me many positive things about money, but my grandmother certainly did:

- Education = money = financial security. 
- Buy land.  They're not making any more of it.  I definitely have a mindset of land = security, and I know I got it from her. 
- Give your boss a good day's work each and every day, and you'll do well in your career. 
- Live on less than you earn.
- Borrow as little as possible when you're young, and work steadily towards the day you won't need to borrow. 
- You don't need to have "the best" right away in life.  Saving is more important than living in luxury. 
- Spend every dollar twice (by that, she meant get the best value for every dollar -- use coupons, buy when things are on sale, buy from places that give you points or rewards towards future purchases).
- People are more important than money, but people need money to live. 

totoro

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Re: Grandma's wisdom: What's the best money lesson you've learned?
« Reply #14 on: February 23, 2014, 04:13:23 PM »
My grandmother on my mother's side was a wonderful person, but not so great with money in that she gave it away to anyone that needed it.  Not a bad quality, but she was lucky it worked out for her because of astronomical house appreciation plus a very good widow's pension.

I think what she did teach me was that helping out others and being generous with time and money and your home creates a lot of social capital.  She was well-loved.

PMG

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Re: Grandma's wisdom: What's the best money lesson you've learned?
« Reply #15 on: February 23, 2014, 09:31:18 PM »
Grandpa:  Did you check your oil?

In other words, take care of what you have. 

As a teenager my grandparents lived 45 minutes away, I visited them once or twice a month.  I often drove out Friday after school and came home Sunday afternoon.  Grandpa always gave my $5 for gas which more than covered the drive, this was in 1999-2002.  I usually stopped at the gas station on the drive there and checked my oil just so I could roll my eyes at Grandpa and tell him that of course I had checked my oil!  Sometimes Grandpa would test drive my 1984 Dodge Aries (named Helen) just to see how she drove and would "accidentally" return with a full tank of gas. 

I still check my oil and tire pressure regularly, definitely before any long trip or if my car has been sitting for several days. 


crumbcatcher

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Re: Grandma's wisdom: What's the best money lesson you've learned?
« Reply #16 on: February 24, 2014, 03:05:07 PM »
My maternal grandparents come from meager beginnings and they scrimped and saved their entire lives. Three things my grandfather said hit home: 

  • Pay cash for everything whenever possible
  • Sometimes it makes sense to buy the more expensive item if the quality is higher and will last longer
  • Take care of what you have; if you don't abuse it it will last longer
My paternal grandparents didn't give advice that I recall, but I remember my grandfather pouring over the financial page of the newspaper to evaluate his investments in energy stocks. The very fact that he was invested in the stock market was an example I would think about later ("hey, you can make money from this stock market thing").

My parents, although frugal in many ways, were examples of what NOT to do -- penny wise, pound foolish.  Unfortunately I followed their examples for a long time. Now that I've adopted a more mustachian existence though, I am behaving remarkably more like my grandparents.

Great thread!