Dawn's Evolution

Posted in Carnival of Personal finance

Growing up most children learn about money from their parents. Some parents take the time to show their kids how to handle money, how to save etc, while others just lead by example.
My mom has always been a frugal woman. Well she had to be, she was a single mother raising 3 daughters.

1. Keep track of your income and expenses
She had a low salary and still tried to take of us on her own, she used to write down all of her expenses on notepads.
I can remember her notepads on the side table, she would make columns and write a description and amount each day. She would close it of at the end of each month and sit with a calculator before she would start on the new month. I always admired her drive and her ability to stick to this habit as I most of the time do not know where some of my cash is going. I need to start tracking my money like my mother did.

2. Generate multiple streams of income
My mother her strategy for getting by was generating multiple streams of income. She would bake cookies or cakes to sell. She knew how to sew so she took orders from people and had her little side business. The money she made from sewing alone was enough for us to live on so she left her salary untouched on the bank.
My mother never finished highschool but kept her focus on courses that she knew would make her money. She took cooking and baking courses, she took courses on sewing and how to create the popular traditional dresses. To this day she still uses the skills she learned at these courses. She now not only bakes and sews but now also teaches these skills to others, while still maintaining her day job(albeit with reduced hours but still full pay).

3. Save through automatic payments
This is something I recently picked up from her after her virtually drilling it in my head since job one. I had always been saving my money the wrong way by keep it all on one account. So when I felt like shopping I would end up going into my savings. I wish I had picked this up much sooner.

4. Make sure the money you are saving is not easily accessible
Makes sense right?
And still I was making this huge mistake. For as long as I can remember my mom has been saving for me and my sisters, we all had our own savings accounts safely tucked away. We could not touch the money even though we really wanted to use that cash to buy new toys(or clothes).

5. Windfalls, gifts etc go directly into savings
Every birthday or good report card me and my sisters would get some money from family members as congratulatory gifts. My mom would take this money and deposit it directly in our savings accounts. We would sometimes kick and scream because we want to spend the cash but ultimately I am thankful for her decision. This is something I have really been slacking on. All my monetary gifts have been spend on frivolous things and I now regret not taking her teachings to heart much sooner.

6. Save for big purchases do not borrow (unless it's a house or car)
Another important lessons I learned from my mother was to avoid loans as much as possible. If you really want it: then you should save for it. If you can not save for it then you must not really want it or you just can not afford it. This is a lesson I fully embraced, even now I am working full time to save for my school tuition instead of taking a student loan. No matter how they market those loans to us at school I stay away, because interest is interest and I do not want to spend years paying of probably twice of what I actually borrowed.

This is some of what my mother thought me, how about you? Any money lessons to share?