Thursday, August 6, 2009

Find A Role Model

Tip #173 - Find A Role Model. Many people have a hard time taking control of their finances because they were never taught how to do it properly. Perhaps they grew up in a household where their parents lived paycheck to paycheck or one where money was never discussed or good habits taught. Just like when you become parents, it helps to have good role models to teach you how to do it well. So what should you do if you didn’t have good financial role models growing up? And you feel that your finances are a mess that you cannot control? Or perhaps you are young and just starting out and want to get off on the right financial footing?

Look for a role model who can show you the ropes to financial success. Perhaps you have an uncle or aunt who was always on track financially. Or maybe you have a family friend who had a successful business and put all of his children through college on his dime. Or maybe you have a grandfather who is living comfortably in retirement. Talk to them and ask them how they did it. There is no need to get too personal and ask them how much they made. And really whether they lived successfully on $25,000 per year or $80,000 per year is inconsequential. The point is that they managed to live on what they earned and save some money to do things they needed or wanted to do. Many people are happy to give advice to the younger generation. Perhaps they can give you some tips on what they did to become that way. Or perhaps they can help you set up your own plan to become financially stable.

Another option is to perhaps talk to your parents or older siblings who may not have financial security even at an advanced age. Ask them what they would have done differently. If the person has matured enough to realize that he may have screwed up somewhere along the way, he may offer helpful insight into where he went wrong. So even if you saw your parents struggling to make ends meet, they may be able to direct you on a different path. Of course, very few people did everything perfect or did everything wrong, but if you can get some real life insights from those who made themselves financially successful, you will have a better chance of doing the same thing yourself. You can read all of the personal financial blogs, magazines, and listen to all of the money advice shows that you want, but nothing beats an honest person to person conversation with someone who has “been there and done that” as far as taking control of his or her finances. Do you know someone in person like that?

In Real Life (IRL) – I have often mentioned that I had a great financial role model in my parents. My dad raised himself up from someone with just a high school degree, who grew up in a small apartment in Brooklyn, and with no financial role model himself (his dad died when he was young) to someone who bought a house in his early 30s, put three children through college, bought three children cars, and retired in his early 60’s with a small condo in Florida.

My mother who grew up in a similar background saved a large percentage of every paycheck she ever earned before she settled in as a stay-at-home-mom. She managed the household efficiently by doing things herself – cooking the family’s meals, having no cleaning help, and not spending money lavishly on name-brand clothing, furniture, or other things.

My parents taught me to never spend money I didn’t have and to save some of everything I made for a rainy day. When I got older, my dad told me a bit about investing. Beyond that most of what I learned from my parents was learned through modeling behavior. They never sat me down and said, “You must save 10% of your income for the future.” Nor did they teach me to write up a budget or have a financial plan. In fact, I’m pretty sure they never had a written one themselves. But I did observe my dad working hard to give us things that he never had as a child, and I saw my mom on her hands and knees cleaning the kitchen floor while most of my parents’ friends had cleaning ladies. They had a few vices, of course, but for the most part they did not spend everything they earned to live the good life. They saved much of what they earned so they would have a good future. They both knew what it was like to be poor, and they didn’t want to live that way. Those were the lessons I learned from my role models. I was lucky. I know not everybody is. If not, seek out a role model or two who can teach you how to handle your finances. Ask them for their stories about how they became the financial successes that they are. You might learn the key to become one yourself.

1 comment:

Your Frugal Friend, Niki said...

Fab post..thanks for sharing!

I am so inspired by this that it makes me want to teach my own son about money, right from a young age.


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