The saving money and budgeting lessons kids learn early will pay off when the get older
One of the most consistent things we’ve heard through the teaching kids money essays is that the money lessons learned early and often are the ones that stick with people their whole lives. Something as simple as watching mom and dad budget and pay bills can lead to a lifetime of good money management.
Today’s essay is by Yesica Velasco Loera a student at CSU Stanislaus. She shares how her parents taught her saving and budgeting and how she now uses those money lessons in college.
Check out Yesica’s story and please share on social media. The most-shared essay on how parents can teach their kids about money will win our $500 personal finance scholarship, announced August 31st!
Looking for more ideas on teaching you kids about money? Check out this huge roundup post of 36 expert ideas on teaching kids money saving tips.
Learning Where Money Comes from and Where it Goes
Money has always been a topic that comes up in almost every conversation I have had with my parents. Growing up they would constantly remind me that money did not grow on trees.
I was never spoiled as a child. My parents taught me how to budget and to always have money saved up for a rainy day. Every month my mom would make a list of all the forecasted expenses for the upcoming month. Often times I would help her by plugging-in all the numbers into the calculator. It would always shock me how much money was needed for all the bills, groceries and mortgage.
My parents would emphasize the importance of a savings account. They would tell me that one would always have to be prepared for the unexpected expenses. Growing up I got to witness some of those unexpected expenses my family had to go through. Luckily it was never really that big of a deal since they were prepared for it.
Budgeting and Saving Lessons for College
The knowledge I learned from the conversations with my parents have really helped me now that I am in college. I use the skills they taught me for budgeting and saving. I mimic their style of forecasting expenses and subtract that from my actual income which prevents me from overspending.
Another tip I have used from my parents is taking a certain amount of money from each check and putting it aside into a savings account for that “rainy day.” Something that in my opinion has been very beneficial was their advice on how to properly use credit cards. They advised me to not apply for too many credit cards, maybe three or four cards since that is how many a person usually needs when they are trying to get approved for a car or mortgage loan.
Everyone needs an emergency fund of at least three to six months’ expenses for those ‘rainy days’ that happen every once in a while. Your rainy day fund doesn’t have to just sit there though. Learn how to invest your emergency fund for safety and return.
Using Credit Wisely and Paying Bills
They also talked to me about credit card interest and how that could quickly accumulate in vast amounts if I was not careful. Their advice was to not use the credit cards if I did not need to; and when I did use them to pay the full balance each month so I would not get charged for interest.
Stretching the payments topic, they also taught me to always pay my bills on time. In fact, they recommended I sent out the payment as soon as I got the bill. The reason for that was so it would arrive on time and I would not get charged for a late payment and so that my credit score would not get ruined.
I have set up all my bills for autopay to prevent me from forgetting about the due dates. Autopay saves me the time it would take for me to write out a check and mail it or log on to my account and pay it. It is a very convenient option for anyone now in days.
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The personal finance strategies my parents taught me have helped me so much now that I am in college and have to foresee for myself and I am confident these tips will make my life easier in the future as well.
I want to thank Yesica for her essay on lessons her parents taught her about saving and budgeting. Be sure to support Yesica by sharing the article through social media and check in August for the winner of the personal finance scholarship.
About the Author
Joseph Hogue is a financial expert and investment analyst. After serving in the Marine Corps, he started his career investing in real estate before becoming an investment analyst for some of the largest private investors. He's appeared on Bloomberg and on CNBC as an investment expert and has published ten books in personal finance. Now he helps investors reach their financial goals and invest in the stock market with some of the same advice he used when working for the rich.