Financial responsibility can be a tough lesson to learn. Teach it early or your kids may never learn good money habits.
Taking financial responsibility for our actions and practicing good money habits is something may people never learn. It’s tough changing the spending habits we’ve learned over decades which makes teaching your kids early one of the most important things you can do as a parent.
Today’s essay is by Jaime Arenas, a student at the University of Arizona. He shares how he learned financial responsibility from his parents and how it has helped him as he prepares for college.
Check out Jaime’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!
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The Power of Saving and Financial Stability
Born in a family with four other siblings, my parents always strived to achieve financial stability in order to provide a happier and more loving home. Even though we were able to pay all of our bills on time and in full month after month, we knew that we were unable to afford anything out of the ordinary, so to speak, or anything that was considered a luxury rather than a necessity.
For this reason, ever since I was a little boy and received one or two dollars weekly to spend, I would save up the money just in case of an emergency and my parents ever needed the money for something more important than the ice-cream cup or toy car I could have purchased with the money.
Fortunately, that emergency never happened and I began to learn the power of saving for better purposes than for simple luxuries that wouldn’t last. For that, I am thankful because that lesson has played a major role in my life now that I currently attend the University of Arizona and have many overwhelming expenses.
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Learning Financial Responsibility and Saving
I remember when I received my first cellular phone, I was very excited because I was one of the last ones out of all my friends to own one. However, this luxury came at a price; the monthly bills started to become a burden for my parents little by little especially with all of their expenses.
It was at this time that I recalled one of the many life lessons given to me by my father which was to take responsibility for my own actions. At this point, both my parents and I knew that it was important to keep the cellphone because a simple call always helped reassure them that I was on my way home from school or that I was okay. For this reason, I decided to accept responsibility and take action to help my parents with the monthly bills.
My parents always taught me of different ways to make money and what better way than to put my musical talent to the test and make some profit. Taking advantage of this idea, when I was invited to play with a tecnobanda where I would be performing live music in different events along with several other fellow musicians I joined without question. Even though the gigs did not happen too often, I was able to pay my own bill month after month and still have some money left over to save in case of an emergency.
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Starting with the Basics and Creating a Financial Plan
As I began to attend college, my parents also encouraged me to have some sort of budgeting system so I managed my money well and did not have to stress out about it more than I had to. Learning my lesson after the semester of college where I did no budgeting, I urged them to help me create a plan so I could be more organized with my money.
We then sat down and we discussed how much money I would be spending on what, how much I planned to make playing music, and how much I would have left over, if any. Once I began to implement this plan, things began to run more smoothly even if at times I would stress over how I would be paying for my classes, books, and other utilities.
Furthermore, they have taught me the basics of investing so I can put my money to work and possibly earn something extra. However, since I don’t have much to invest now, I do plan to learn more about it and, as they said, put my money to work.
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Although my family has never had enough money to be considered wealthy, much less rich, I am glad they have been able to manage their money in a way that has made us financially stable. They have filled me with knowledge in terms of handling my money and spending it more intelligently and even though I can’t yet do some of the things they advised like investing, I do plan to implement them in my life in the future.
I want to thank Jaime for his essay on learning financial responsibility and good money habits. Be sure to support Jaime 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.