Over at freefrombroke.com I was tagged yesterday to answer the following question:
What’s the best financial advice you ever received?
That’s a tough question, and I’m not sure how to answer it. I guess I really can’t remember ever receiving any amazing financial advice from my parents, or those around me. But if I really think about it, I WAS able to observe advice in action from my parents. They lived their advice.
Advice in action
When I was growing up my parents lived out the best possible financial advice that I’ve ever received. Their lifestyle showed me how important it is be frugal, to save up for things you want, not use credit and to make do with what you have.
At my parents house we never had a lot of the extras. We didn’t have a cable TV, no video game systems (until I got a job and bought my own), no expensive haircuts (mom cut our hair), and until I was a bit older we didn’t even have a microwave!
Granted, a lot of our making do was out of necessity as my dad was working in ministry for many years, and didn’t bring home a lot of extra income. At the same time, we never really missed the things we didn’t have. Instead of watching a lot of TV we played board games as a family. Instead of going out to eat a lot we ate dinners as a family every night. Instead of buying new clothes my brothers got my hand-me-downs (I usually got the new stuff being the oldest son).
My parents example not only showed to me the value of living a frugal lifestyle, but also told me about the importance of being content, and having other more important things take precedence in your life – like faith and family.
So the advice I got from my parents by observing them growing up:
- Be content in life by focusing on important things like faith and family.
- Live frugally, spend less than you earn and pay cash.
What’s the best financial advice you’ve received?
So now I’ve shared the best financial advice I’ve ever received. I’d be interested to hear your input on the topic.
What is the best financial advice that you’ve ever received?
The two best pieces of financial advice I ever received is:
1) You current state is the sum total of the decisions you’ve made;
2) Live on less than you make.
It sounds like the best advice you receives was live by example! Looks like your folks set a good tone with their lifestyle.
FFBs last blog post..Best Financial Advice You’ve Received
Great advice! Very similar to what I learned from my parents — also very faithful people.
At any rate, the best advice is still: Make more than you spend.
Also, lately, I’ve been asked about what I recommend during these times. I always offer this advice: Don’t Panic!
Mirandas last blog post..Rate of Borrowing Decreases — Along with Credit Lines
It seems like there is just a pervasive sense of panic right now. Even when “good news” comes out about rate cuts, etc – Everyone panics. The explanation? “They’re unsure that the measures will help”. Stop panicking people!
Awesome post! The best financial advice I’ve ever received is to pay yourself first, before you pay your bills. Take a little money, even if it’s only 5% of your paycheck, and put it away in savings. Since then, I make it a point to always tuck away money for a rainy day. Thanks for posting! I enjoyed reading everyone’s financial tips!
Average Family says
The borrorwer is slave to the lender. No truer words were ever spoken.
Here’s my answer!
Becky@FamilyandFinancess last blog post..Hope Chest Legacy
The best advice I have ever been told about finance have all been mentioned above but here they are again
Pay your self first
Spend less then you make
Stay away from credit when ever possible
When considering the events of the past few weeks I keep thinking of a quote I heard recently “It’s only when the tide goes out that you learn who’s been swimming naked”-Warren Buffett.
Our ancestors had a better understanding of money than most modern Americans (even the experts). Our American founding father, Benjamin Franklin, was one of the wealthiest men of his time (Did you know that?). His prescription for wealth was based on common sense, thrift, and long term savings, not an artificial mathematical model, as are many of our lending and investment practices today.
An old friend of mine, whose predecessors were one of the founding families of Oregon, shared with me his grandfather’s wisdom about money, “Spend 10 cents of every dollar you make on some fun, take 40 cents and save it to buy more land, take 20 cents to buy more cattle and horses, then pay your (farm) hands and buy your vittles with what’s left over, I tell you that you’ll never be poor.”
How’s that for a hard dose of old fashioned economic common sense?
Now let’s take that old time wisdom and break it down into modern terms. Spend 10% on having fun, save 40% and set it aside to invest in a conservative growth vehicle (real estate in the example), take 20% and invest in something a little risky, but still sensible, lets compare cattle and horses to a modern CD or money market fund (if your not a farmer!) Or you could invest that money directly back into your business if you’re a business owner. The last 30% he says is to make your payroll and buy groceries (“vittles”). The take away is that he was talking about living without borrowing money.
Most people don’t realize that home mortgages didn’t exist before the end of WWII. They were created to allow for the proliferation of home ownership and the fulfillment of the “American Dream”. Unfortunately, credit, and its overuse, has become a way of life for most Americans. “We work to pay the bills”, is a common statement these days. The statistic that 30% of the homes in America are not encumbered by a mortgage gets little play in these fearful days.
Almost no one alive remembers the days before “easy” credit came along to make our lives easier. Given the current credit crisis, I have to ask…has it really made things easier?
I agree with all of the above comments. My parents gave similar advice. One that I particularly remember was to make a budget and stick to it. It has always helped me stay out of debt.
Kriss last blog post..Rebuilding