Mothers across America are anticipating an onslaught of cards, flowers, breakfasts in bed (remember, it’s the thought that matters), and brunches out this Sunday in celebration of Mother’s Day. My two “bonus” daughters are on the other side of the country and a soon-to-be daughter-in-law but I cherish them as my own. Since I arrived in their lives a bit later, I have a lot of pearls of wisdom to dispense but less time to do so. In that spirit, I thought I’d share with you my “financial love note” to my daughters.
Dear Alison, Anna, and Lindsey:
Over the past 18 years, my financial planning work has highlighted some important choices you can make to secure your financial situation (now and in the future). These are lessons best learned sooner rather than later and being the over-achievers that you are, I already see you practicing many of them. However, any wisdom worth sharing is worth repeating!
1. Embrace delayed gratification. –This most basic idea of not spending a dollar today but rather saving it for a future goal is one that you know well. Our society does not encourage this behavior (we want/need/deserve it all now!) but when you choose to save for later, you will rarely regret it.
2. Take a hard look at your needs vs. wants. Live within your needs but below your means. –Speaking of needing vs. wanting, don’t confuse the two! I don’t want you to have a meager existence but too many people put themselves in financial duress because they’re unclear about what they need to have to live comfortably versus what they want to have to live large. Know the difference between the two so you can choose when is the right time to splurge (hint: it’s not all the time) and when it’s the right time to save (see “Embrace delayed gratification” above). Once you’ve identified those needs, be sure they fall below your monthly take home. What is affordable? I want you to have money left at the end of the month to save and invest for your future.
3. Your best financial planner looks at you from the mirror every morning. –At some point, you will undoubtedly share your financial journey with someone else. Whether that someone is your spouse, a business partner, or a financial planner (like me!), never forget that it is your financial journey and you must be an active participant (questioner, decider) in it. Life will get full and you may allow someone else to “drive” but always make sure that you’re in that car and helping with the navigation. It may be the one time that it’s okay to be a back-seat driver. Always own your financial future!
4. Say “no” out of love rather than yes out of fear. –You will also most likely have someone you love ask for your financial help in the future. You are giving in nature but proceed with caution here. Never give of yourself financially if it will undermine your own financial situation and don’t be fearful that someone will love you less if you choose not to invade your emergency fund or co-sign a loan to help them out of a tough spot. Financial help should always be a positive for you and the recipient. Guilt and manipulation have no place in that choice.
5. Money does not define you. Character, choices, and relationships do. –As a financial planner, I obviously think that money matters and you must attend to it. However, it is a means to an end in achieving goals, purpose, and meaning in your life. Your net worth does not define your self- The lives you touch and the legacy you leave say much more about you than the dollars you’ve saved.
Fortunately, you all are making good financial choices and are already living lives of distinction. I am so proud of y’all and am blessed to join you on the path that you are walking!
Much love, Evelyn
P.S. Don’t forget to floss!