You’ve heard it before. “Sit up straight.” “Eat your vegetables.” “No, you can’t jump off the roof and into the pool.” Mom’s advice isn’t always wanted, but there’s usually a good lesson behind it.
Here are some classic pearls of wisdom that can also help your finances:
“If it sounds too good to be true, then it probably is.”
Bummer, but true. Ads claiming surprisingly low interest rates or no money down might look attractive, but there could be a catch. Always be aware of the terms, limitations or conditions before making a financial decision.
“A penny saved is a penny earned.”
Saving money is a skill learned from an early age. The methods used to stuff your piggy bank can also be applied to your 401k, IRA and other investments. Better yet, your adult savings can earn interest!
Traditional savings accounts can be important tools as well. To find the best one for you, compare these common savings accounts.
“Don’t put all your eggs in one basket.”
Back up plans can be important in life. Even if you have a top choice, it’s good to have some fallbacks in place.
The same can be said when investing your money. If you put all your money into one stock, and it fails, times could be tough. However, if you invest in a variety of stocks and bonds, you could survive one loss and still profit through other investments.
“Just because your friends do it doesn’t mean you have to.”
If you try to fit in with the crowd, you could end up overspending or not sticking to your budget. Instead, consider the pros and cons of each purchase and investment. If it doesn’t feel right, tell your friends, “Maybe next time.”
“Don’t forget to take a sweater!”
This vintage tip is all about one thing: being prepared. Not so much for the long haul, but for the short term.
Emergency funds can help cover surprise costs in a short period of time. Unlike your regular savings account, these funds are meant to be withdrawn in times of need. Check out how to build an emergency fund to learn more.
As usual, Mom was right
Admit it or not, most of Mom’s advice has proven right over the years. Instead of an eye roll, maybe it’s time to give her a hug and a thank you.