debt

Sound money management advice from Grandma

5 financial adages to live by
5 financial adages to live by © Denis Tabler/Shutterstock.com

Our grandparents didn't have an app for keeping track of their income, sticking to a budget or saving money. They couldn't click onto a website or find a cable channel for instant stock market quotes. They may never have met, let alone hired, a professional financial adviser.

Instead, they relied on simple, common-sense rules that even the pros will vouch for as sound money management advice. Maybe they borrowed a credo from someone famous -- such as Ben Franklin's, "A penny saved is a penny earned" -- or maybe they came up with their own.

We asked a few money management experts for their favorite examples of old-fashioned financial advice that still works. Here are five financial planning tips that are grandma-tested, expert-approved.

Listen to audio
Show Show Transcript

Though grandparents may not use apps or log onto the Internet to do their finances, many follow financial adages that help them lead a financially sound lifestyle.

For example: Pay yourself first. If you do, you adjust your spending to the cash flow you have available. Sidetrack some of your income into a savings or investment account for a rainy day.

That leads to another financial adage: Live within your means. If you love that big house but can't afford it, find one you can afford so you aren't putting most of your money into a mortgage payment. Buy the best you can afford. This is counterintuitive, but the truth is that cheap goods won't last as long as quality goods.

Be wary of credit cards. Of course, buying on credit isn't evil in and of itself, but accumulating debt is a very expensive habit because it requires you to spend current earnings on past purchases plus interest instead of investing for the future.

 

advertisement

Show Bankrate's community sharing policy
          Connect with us
advertisement
CREDIT CARDS WEEKLY NEWSLETTER
Credit cards on a table

Get advice for managing credit cards, building your credit history and improving your credit score. Delivered weekly.

Debt Adviser

Is power of attorney status risky?

Dear Debt Adviser, I am so glad you recently posted a question about an elderly mother. My mother has dementia. Eight years ago, she opened a credit card for a family member who has now declared bankruptcy. My mother only... Read more

advertisement
Partner Center
advertisement

Connect with us