3 financial lessons I’m grateful for


Growing up, my family didn’t hesitate to talk about money. My parents thought it was important for me to understand how savings accounts work and why it’s important to stay on a budget. I carried many of these key lessons into adulthood, where they helped me be more financially responsible. Here are three specific lessons for which I am especially grateful.

1. Always have an emergency fund

You never know when an unforeseen expense might pop up out of nowhere, or when you might lose your job, even if you’re a strong employee with a great track record. I experienced all of this in my day. In my early twenties I left a dental problem untreated and it led to expensive root canal treatment. I also had a car that was destroyed in a minor accident (it was a very old car) and an air conditioner failure in my house in the middle of summer.

In addition, I was the victim of layoffs. When I was working as a toy designer years ago budget cuts took place and my job, like many others in my business, landed on the chopping block.

Fortunately, my parents taught me to always have money in an emergency fund, and that’s what allowed me to overcome these various challenges. Not only do I have money dedicated to emergencies in savings, but I also make it a point of honor to replenish my emergency fund when I have to use it.

2. Use credit cards with care

Credit cards can be a useful and rewarding financial tool, but only if you use them responsibly. One thing my parents always taught me was never to have a balance on a credit card, but rather to charge only what I could afford to pay when my bills come due.

Since I have had an emergency fund for many years, I did not need to use my credit cards to cover unforeseen expenses. I was able to avoid carrying a balance and paying interest on my purchases.

Avoiding credit card balances also helped my credit score stay strong. In fact, at one point I had a perfect credit score, and using a chip credit card helped.

3. Borrow when it makes sense

While borrowing money in the form of a credit card balance can be costly, there are times when it does. Is it makes sense to borrow. It is for this reason that I continue to have a mortgage on my house, even though I can technically pay it off if I wanted to.

Mortgage rates have been extremely competitive over the past year. Last summer I refinanced my mortgage at a very low rate so it makes sense to pay interest on this mortgage as it frees up my money for other things like buying stocks in my brokerage account.

Some people only learn money management when they’ve already made some costly mistakes. I am very grateful that I learned these lessons from the start. They have really made a difference in my finances over the years.

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