What Grandparents Can Teach You About Finances
You might think their old, wrinkly and out of their minds but your grandparents can be a great source of financial advice. They might be traditional in their sense of money management but they have some great tips, that can really make your money go a long way.
Not to mention, some of these old ways might actually make you think of your finances in a new way that could improve your spending habits for the better.
Not Saving Your Money
Believe it or not but your grandparents were also young, at some point in their lives and thought they would never get old. However, they did and they didn’t set up a savings plan for themselves because they thought like most people, “that they had plenty of years to save later on in life.” However, now that they are in their 70s and 80s, they are seriously feeling the affects of not having saved money.
No matter what age you are at, you should be saving money. The best time to start is when you’re young, and have the least amount of responsibilities and debt. This is because you won’t have to worry about budgeting most of your money toward bills and debt, and instead put most of it toward savings.
If you have not started saving, you need to start and if you are already saving, try to save more. The more you put away now, the more you will have later. Also the interest rates for savings accounts are around 1% to 1.25%, which is a pretty high return rate.
Don’t Wait for Retirement to Pay Off Your Debts
You grandparents, believe it or not, actually live off a fixed income. Meaning they get the same amount of money every month, to survive. This money has to last them the entire month and be sufficient for their bills. As a result, they have very little disposable income to put towards paying off debt, if any money at all.
As a result, most of them will end up not ever paying off their debt or having to be forgiven for their debt in the end. However, in other instances, the more serious debt cases, will force elders in their old age to pay their debts, and that is nearly impossible.
So instead of making the mistake of waiting until you don’t have the money to pay off your debts, pay them off while you still have an income. It is much easier to budget for monthly payments and you can still have money left over.
Get Professional Help
Everyone is stubborn, whether their old or young and when it comes to asking for help, most people don’t like to show their weakness. However, don’t make this mistake. A financial planner is a great resource for improving your finances and reaching your financial goals.
A financial planner will asses your current financial situation as well as give you tools and tips going forward. They will be able to make a detailed plan, that fits your lifestyle and budget so that you can meet your goals. Not to mention a professional will give you the reality of your situation and project what your financial future could be if you continue on the same path.
Don’t be afraid to ask for help and make sure that you look for an accredited and expert financial planner. Do your research and make sure that the person you choose aligns with your goals and objectives for the future.
Not spending your money on the small stuff
You notice that Grandparents save their money for the really important stuff, like helping finance a car or a house? This is because your grandparents know the value of that investment. They know that putting down hundreds or thousands of dollars on an investment will pay off more than a shopping spree.
They know that a decade from now, you might not have the same pair of favorite jeans but you will still have your car or your house. They know that those things last longer and are of higher quality, not to mention, have actual value to them if and when you do sell.
Try to think the same way, put your money toward actual investments instead of small stuff that isn’t going to last very long. You will not only have the opportunity to make your money back later but get use out of that item.
Long-Term Plan for Your Finances
Your grandparents might always plan for “later” sometimes that later isn’t always well defined but it is going to happen. The point is that they are well intentioned and have a plan in mind when they do spend money.
Similarly, you should be thinking long-term too. You want to be thinking about where you want your finances to be in 5 to 10 years and how you plan to get there. Planning now will save you the work later and not have you stressing out either.
A long-term plan should be for meeting goals in a couple of years, and should have goals are there that take a significant amount of time to reach. For instance, becoming a home owner, or having a couple of thousand dollars in your savings account.
You might not listen to your grandparents that often but you should take note of their past financial mistakes and current financial prowess. They have lived longer and have experience to back them up.