Categories
Money conversations

Letters from Mom: The one money trick I wish I had known about when I started working

Letters from Mom is an ongoing series where I share words of wisdom with my son. Read more letters from mom.

Dear J,

When I graduated from college, I was really fortunate to get a job immediately at a great company with an excellent starting salary.

I got paid monthly and took home $2,673.61 in my first full month of work. Curious to see the actual pay stub?

At the time, I knew enough to put some money aside into a savings account. I set up direct deposit to deposit $100 to my savings account per pay period and the rest to my checking account.

With each raise, the rest got bigger and bigger. The amount I was saving did not.

Guess what happened?

Categories
Money conversations

Letters from Mom: Financial Health is Only One Piece of the Puzzle

Today I’m starting a new series called Letters from Mom. At 10, there are only so many money lessons I can teach and that J can practice. However, there are things he’ll need to know later, and that’s what I want to focus on today.

Dear J,

I’m hoping that by the time you’re older, you’ll be very financially healthy.

The markers of financial health and success (in my opinion) are:

  • Managing your money well – what comes in and what goes out
  • Figuring out what’s important to you and spending wisely there
  • Saving, in general and for specific future needs and wants
  • Giving and being generous
  • Having what you need, being able to provide for yourself (and your family if you choose to have one) and being responsible

But financial health alone won’t give you the happy, fulfilling life I wish for you. There are several other areas that are important.

Categories
Money conversations

Young Money Mistakes – Investing with an Investment Club

In the early 2000’s, a friend of a friend started an investment club. If you’re not familiar with the term, the SEC says:

An investment club is generally a group of people who pool their money to invest together.

To participate in the club, you would send him money each month. The group would choose and buy stocks. And ideally you’d make a profit.

Nothing could go wrong there, right?

At the time, I was in my early 20s. I knew I should be doing something with investing or stocks or the stock market, but I didn’t know what. Here was someone who supposedly knew; he was someone I liked and trusted, so I started sending him money every month. (I didn’t participate in the group otherwise and didn’t help choose the stocks.)

At some point I stopped sending him money and lost track of how much I had sent.

A few years later I got an email inquiring how much I had invested. The leader of the club was in trouble for embezzlement.

Categories
Money conversations

An Honest Look at My Finances

Do you know how much your parents made (or make)? Or how they really spend their money? I don’t.

What about your friends? Even the close ones?

I can think of just one person whose salary I know (my signifiant other), and even then, I don’t know the details of how much he’s saving or spending in various categories or what his big picture looks like.

We tell our kids not to worry about what other people are doing, so why should we be concerned with what other people make, have or spend?

For MANY of reasons, but here are two.

Categories
Money conversations

My Kid Is Not Motivated By Money

At the end of every school year, the teacher sends home a few summer learning packets. There is normally a packet for math and one for reading/language skills.

You’ve probably heard the statistics on summer learning loss — that kids lose at least one month of learning over the summer. I’m in favor of the idea of these packets, but in practice they’ve never worked for us.

We just don’t get around to it. Summer is busy and fun, we’re outdoors trying to soak up every last bit of warm weather and daylight that we can. We’re doing all of the things that we don’t get to do the rest of the year — swim, camp, picnic and hit the local amusement parks.

So this summer, I had a brilliant idea (or so I thought). I had the solution that would motivate J to want to do those worksheets.