Sunday, May 12, 2013

More on Moms and "MOM" ... Lessons Learned

Mom and Money: 'Lessons I Wish She Had Taught Me' is worth considering on this Mother's Day. It contains lots of good advice from various financial planners and other "experts"  who sometimes learned the "hard way."

Accordingly, here's a healthy sampling of 'vicarious advice' for your consideration on this special day:

"Mother's Day celebrates all that our mothers have done for us. But…no one's perfect, right?

One mistake moms (and—let's get real—dads, too) sometimes make is failing to teach their children how to be smart about money.

A whopping 65% of people say their mother is intimidated by money, considers money-management a necessary evil or has never managed money, according to a new online poll by the nonprofit National Foundation for Credit Counseling. About 730 people responded to the poll on the NFCC's website,

Just 35% agreed their mother is "pretty savvy managing money, and enjoys it," . . . .

Our informal survey found that generally these money experts said their mothers did a good job modeling smart money habits. But there were some gaps in the education. . . .

Ian Arrowsmith . . . says his mother has always been good with money and, like his father, enjoys investing. She taught him to enjoy it, too. He made his first investment at age 16. But one thing was missing: the importance of assessing long-term goals.

Being financially successful, Mr. Arrowsmith says, requires answering the question: Where do you want to be in the future? "Every single financial decision should be made based on the necessary steps to accomplish the future goal," he says. . . .

Money was not a topic of conversation in Brian Parker's childhood home. "We grew up in one of those households where money wasn't really spoken about at all," says Mr. Parker, a certified financial planner . . . .

Wealth "seemed to be defined by what other people saw—a Louis Vuitton purse, a Mercedes," he says. "If you seemed to have money, then people would believe it. That was my definition of wealth growing up."

In his years working with clients, he has learned otherwise. "Defining wealth by what you see can be very misleading," he says. "I've found that Ferrari owners can struggle to make payments, and multimillionaires may choose to ride their bike to work."

One of his goals is to make sure money is providing financial security for his clients. Rather than ostentatious shows of wealth, "you have to feel contentment," Mr. Parker says.

The measure of wealth is a sense of security. "You've done well," he says. "Other people may not ever know that, but does it really matter?". . .

In many households, the money-management duties typically fall to one person; and in past decades, especially, that meant the man of the house.

But demystifying the money-management process can be good for children, says Sheryl Garrett, a certified financial planner and founder of the Garrett Planning Network, a group of fee-only financial planners.

"I would have loved seeing [my mother] take charge of financial decisions or even discuss them with me," Ms. Garrett says. "I believe my father did a good job of this, and my mother supported him. But to a young person, seeing your mother be in charge, make important financial decisions and discuss these with us would have been wonderful and very empowering.". . .

When Kent M. Grealish decided to become a stockbroker, his mother thought he was gambling with his future. She wanted him to find a steady job—with the U.S. Postal Service.

Mr. Grealish, now a certified financial planner and partner with Quacera in San Bruno, Calif., says his mom wanted a risk-free career for him—one with a steady paycheck—not realizing that a job at the post office did hold risk: He might have spent years trying to squeeze into a career that didn't suit him. (And then, there's the fact that a job at the post office is far from safe these days.)

"The most important lesson I had to learn on my own was that there are no safe choices. We have to choose the risks we wish to assume and try to avoid—or pay someone else to assume—the risks we can't tolerate," he says. . . .

Allison M. Stutts's parents divorced when she was a child; at times, her mother worked two jobs to support the family.

"She always lived within her means—never had any credit-card debt—but we lived paycheck to paycheck," says Ms. Stutts, now a certified public accountant and founder of A.M. Stutts Financial Management, in Lombard, Ill., a Chicago suburb.

"I grew up in a family with very little money and I developed this idea that because I didn't come from money, I wouldn't be able to achieve the same monetary success as others who might have been raised in a more-affluent family," she says.

"I've learned as an adult that I had to change that perception," Ms. Stutts says. "It's not anything my mom said—it's what she didn't say. She encouraged us to be the best that we could be, but we never talked about how where you come from is not where you're always going to be.". . .

Jeanne Gibson Sullivan . . . says her mother always taught her how to save money. But the one lesson she wishes she'd learned earlier? To live below one's means.

"I learned the hard way," says Ms. Sullivan, noting that she wasn't prepared for the expenses she faced after graduate school. . . . "Then I started living below my means."

Which brings up another lesson: "Write your budget down," she says. "It doesn't mean you have to write every nickel down, but you need to know every nickel coming in and going out.""

Summing Up

Great advice from lots of people.

Experience is a great teacher, and the experience of others is the least expensive and appropriate way to learn life's lessons. Not as much pain and no need to "rack up and shoot over" when the lesson is a vicarious one.

That's my take.

Happy Mother's Day.

Thanks. Bob.

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