10 personal finance lessons I learned from my grand mother

Older people are a great source of knowledge and advice and using their experiences by way of interaction can help teens to understand how their spending habits have changed over the years. Their experience inspires and informs the coming generation. An added benefit is that conversations with grandparents are usually less threatening to teens.

The fact is that my grandmother had a huge impact on the person I am today, it’s no secret that she’s the biggest reason why I am so passionate about financial literacy. The way she lived her life had a profound effect on the way I think about money. I clearly remember learning about the importance of living within your means, saving for emergency needs. Here are 10 financial lessons I learned from my grandmother

Needs vs. wants

My grandmother purchased groceries and other items for the family and she explained the need to always spend money wisely. She helped me to understand the difference between wants and needs. Although items like toys are alluring, there are needs that are much more important such as food, shelter, and clothing.

Contentment

Teens now are all about instant gratification, but my grandmother was the epitome of true financial contentment. Whether she had little or a lot she lived a life of gratitude and contentment.

Save more than you spend.

Anytime I got an allowance, my grandmother ensured that I put a certain percentage into a savings account my parents had created for me. The remainder was kept in my piggy bank.

Invest wisely

Grandmother talked about the importance of investing. It is critical to carefully research what you will be investing in. Part of saving for your future is about investing wisely and responsibly.

Think long and hard before you make a big financial decision

To make smart financial decisions, it is crucial to examine all the pros and cons. Thinking long and hard about any financial decision and asking for advice will help take emotions out of the decision.

Budgeting

Right from an early age, Grandma made sure I had several envelopes for different types of spending: different labeled envelopes for personal expenses, holidays, saving and so on. I learned the importance of budgeting from then on.

Shop for Discount

I vividly remember walking around grocery stores with my grandmother and watching her negotiate for EVERYTHING. She was always ready to haggle for a lower price for any item.

Know Where Your Money Goes

Grandma made me understand that it is important that expenses should never exceed your income. She explained that making small manageable changes daily can have a significant impact on an individual’s finances. Furthermore, keeping recurring monthly expenses as low as possible will also save you big bucks over time.

Start an Emergency Fund

No matter how small you feel your salary is, it’s wise to save some in an emergency fund every month. This can help you in the case of an emergency be it a health challenge or to keep you out of trouble financially.

Debt is Disastrous

I learned this lesson from the sidelines. If you don’t have emergency funds and something major were to happen, you may end up with credit card debts. There is enough stress about money as it is, you don’t want to add to the stress of being in debt. Although our grandparents lived in a different world, there is always something to learn from past generations about managing money. The rules are just the same whether you are buying groceries or a car.

Teaching money management to children is a critical life skill. By the time a child is old enough to leave home and head out into the world on their own, the best opportunities for teaching them about how to best manage their money are over. While most children do not have a lot of money, childhood is a very useful time to teach your children basics about money that will stick with them for decades.