You can still teach your kids about money and the importance of saving even when money is tight
The importance of saving money and good financial habits aren’t less important when money is tight. Parents can still be good financial role models and teach their kids about money even on limited means.
Today’s essay is by Andy Tan, a student at Virginia Polytechnic Institute and State University. His story is an inspirational one of new beginnings and sacrifice so a new generation can have opportunities we never had.
Check out Andy’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!
Sharing our money lessons about saving, budgeting and investing is what PeerFinance101 is all about. Check out my first money blunder and how I learned to set financial goals.
Teaching about Money and a New Opportunity
As a student coming from a low income household, I have been taught concepts about personal finance that average middle class students do not even know about. My parents came to the United States hoping to provide a better future for me. They came over to the states sacrificing almost everything they had.
The cost of living in China is significantly lower than the cost of living in the Washington D.C. area. In order to survive my parents had to take jobs that were long hours and low paying. This was because they did not know English and came with little educational background.
Even though money was tight, they always managed to keep everything under control while providing food on the table. With both my parents’ credits scores almost perfect, it shows that they know how to keep their personal finances under control.
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I learned almost everything I know about personal finance from my parents. From saving money to budgeting, they knew what they were talking about. The most important thing that my parents stressed to me was the concept of getting a good education. Without a good education, you are most likely put in a spot where money is tight. When money is tight, keeping your personal finances under control only makes it ten times harder.
The Importance of an Education and Personal Finances
When you get a good education, you are more likely to earn more money. When you have more money, you are able to relax a bit more as your personal finance are easier to control.
Another important concept about education is to get it as soon as possible. The longer you wait to get your education, the harder it will be to achieve it. As we grow older, we have more responsibilities and those responsibilities could come with costs. These are the costs that could stop you from achieving the education that will bring you out of poverty.
Another important concept that my parents taught me was to save as much money as you can. Saving money is not something that is easy to do when money is tight. When money is tight in a household, every dime counts. It is saving every cent that you can that will allow you to save more money. It does not matter if the amount is small, saving money is saving money.
Everything adds up to the bigger picture, it is the practice of the concept that will allow you to be successful even when money is not tight. Coupons were huge in my household because coupons are like free money. Although, coupons for products that were unnecessary went straight to the trash. It is not saving money but rather it is spending money when there is a sale of an item that you do not need. This is an important concept because there is a huge difference between needs and wants.
It may seem like wants are needs, but when managing a tight budget the wants will only destroy your budget.
Debt is a Financial Tool that Must be Used Right
Paying down debts is one concept that is vital to successful personal finance. While my parents are still in debt, they made sure I understood how important it is to pay it off. My parents are still in debt because they lack the education to obtain a well-paying job.
My parents save as much as they can, although even through saving, it is not enough. It is why they stress to me the importance of a good education. It is education that will land you a well-paying job. It is also education that will bring you out of the lower class. While my parents have never been above the lower class, they stress to me to never take things for granted.
As hard as you try, saving money can seem impossible if you’re just not making enough to pay the bills. That’s when you need to take on your finances from the income side. Check out our Work from Home Directory and six strategies on how to make more money.
Even if you make it out of the lower class, it is important to use smart personal finance skills in order to make sure you never fall back down again. Debt is a huge issue that will bring you back down if you make it out of the lower class. Debt is an enemy, although it is not bad as long as you can maintain and control it. When you are in debt, you have an obligation. It is weight on your shoulders that you need to get off otherwise it can ruin you financially which will then ruin you emotionally. That is why it is important to take that burden off your shoulders as soon as you can.
Throughout my childhood, I have learned skills that will allow me to be smart with money. Money is just paper, although the world revolves around it. That is why it is important to be smart with it as it will lead you to a better life. Money management is important as it allows you to understand what you have. Education is a vital part in being in a good financial situation, although it is also important to have good personal finance skills in order to maintain the good financial situation.
I want to thank Andy for his essay on saving money even when money is tight. Be sure to support Andy 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.