This Mother's Day don`t miss money lessons from Mother
Mothers have saved for the rainy day and have best practices in place when it comes to prudent money management.
May 09, 2015 / 03:47 PM IST
“God can’t be everywhere that’s why he created Mothers”. We cannot have any other adage that is more apt than this one and which is universally accepted too. The very mention of the word Mother, Mom, Maa, Aai or Amma as we call her in different parts of our country, brings a warm feeling of love, security and an emotional bonding that transcends the boundaries of vocabulary to be described. If there is one person in this world who would do anything for us, anytime, irrespective of the situation, it has to be our Mom. She goes through indescribable pain to bring us safely into this world, protects us every second of our lives when we are at our weakest self, makes us learn how to walk, teaches us alphabet, makes us learn the nuances of life that form part of the values we grow up with. The lessons learnt from her stay with us for life. She is the first teacher that everybody has.
It goes without saying that Moms are the best when it comes to managing finances. Interestingly, there are many financial lessons that Moms teach us. Let us take a look at the top 4 Money lessons that Moms teach us:
1. Stick to a budget
While growing up, we see our Moms managing the entire household expenses based on a fixed budget. They have a tab on each of the expense heads and meticulously ensure they stick to the budget. The key point that we can learn from Moms when it comes to budgeting and sticking to a budget is that no matter what happens, they would not pull the money allocated for any other expense head and spend it on some other expense head. This discipline is very hard to imbibe and practice, but when done correctly, it is a magic mantra that can immensely increase our ability to save for our future financial goals, as it leaves out a definite fixed amount as monthly surplus.
2. Save for the rainy day
Even while sticking to a tight budget, which in itself is a tedious task, we have seen our Moms save tiny fractions of money every month for a rainy day. A rainy day can be any medical emergency or any unforeseen expense that is unplanned for. Moms save a tiny part of the money they get every month and stash it away safely so that we are prepared for that emergency. Similarly, it is always prudent to create and maintain an emergency fund that would take care of it rather than dipping into our savings. Having an emergency fund also increases our chances of attaining our financial goals.
3. Diversify your savings
Mothers are the perfect embodiment of the term “diversification”. We are sure we have seen our Moms put small amounts of cash in different utensils and boxes containing cereals and always wondered what is she up to. That is a classical example of diversification. Moms keep different small term goals like repairing the sofa, buying curtains, etc. and keep small, non-descript amount of money into different utensils. Only she would know which utensil carries the cash for which goal. Similarly, while planning to invest to reach our goals, it is always prudent to diversify our portfolio and not keep all our investible money in one asset class. Diversification of the portfolio ensures risk mitigation too.
4. Don’t waste money on things you don’t need
When we hear someone tell us not to waste money on things we don’t need, it sounds very clichéd but it is not. Moms teach us this from our childhood. From the time when we cry for that toy to the time we demand that shoes, Moms ensure that money is spent only on things which are necessary and unnecessary things are avoided. Some of the things we waste our hard earned money is on that over priced smartphone, too big an LED TV, etc. It is always prudent to cut down on our expenses to ensure that smart money is not being spent on things we do not need to begin with.
There can’t be a disagreement on this, Moms are special and are an integral part of our lives who teach zillions of things to us. The above financial lessons that we learn from our Moms are not earth shaking facts, but simple principles in life that go a long way in ensuring our financial objectives are met within the resources that we have. Deeply rooted in the above money lessons is financial discipline, the fundamental virtue which paves the way to wealth accumulation.