Everyone learns about money somewhere.
Many people learn from a money mentor. Often it’s their parents, according to a 2014 survey conducted by Harris Poll for the National Foundation for Credit Counseling. Some people learn about finances in school, with 6% crediting classroom time with imparting financial knowledge, the survey says. Others learn from the Internet, from financial professionals or from their friends.
Whether you learned about money from a mentor or from reading sites like NerdWallet, you’ve probably absorbed certain attitudes toward it. If your relationship with money is difficult, it’s never too late to change your attitude and expand your skill set with a money mentor.
A money mentor can show you what to do, or, just as importantly, what not to do when it comes to managing your cash and credit. Here, five people share what they learned from their money mentors — and how they’ve become mentors themselves.
Parents as mentors
Nikki Karam remembers when her parents paid off their mortgage. She was 10, and her mother brought home a cake to celebrate. Karam herself is not there yet, but she was able to buy a house when she was only 24 because of the good financial habits her parents instilled in her.
“I didn’t realize until really recently how much better prepared I am” than her peers, she says.
Karam’s parents prepared her for financial independence by talking about lifestyle choices, investing and debt throughout her childhood. When she got her first credit card in college, her parents cautioned her so strongly against debt that Karam always paid off each purchase the very next day.
“They made it sound like if I didn’t pay my bill in full every month it would cause total, catastrophic, irreparable damage,” recalls Karam, now a librarian in Philadelphia.
The result was a stellar credit score, high enough that Karam and her then-partner qualified for a mortgage when Karam was just a couple of years out of college. But the biggest benefit Karam got out of her parents’ money mentorship was a lack of fear.
“Understanding how everything works makes me feel a lot less stressed about it,” she says. Managing her finances has always “seemed so straightforward, the way they would explain to me about it.”
The takeaway: Talking openly about money can help eliminate some of the fear that leads to poor decisions.
The research assistant
Sara Daley’s dad helped her sign up for her first credit card when she started college and told her not to spend more than she could pay off in a given month.
But Daley’s dad kicked her credit-building strategy up a notch. He advised her to buy large items for her friends — after they’d already paid her for them, of course. Because there would be significant activity on her card, she could request a credit line increase much sooner. That would improve her credit utilization ratio, which would in turn improve her score.
“It got me understanding credit and understanding how to use that to my advantage,” Daley says.
Even now, at age 39, Daley’s score is slightly higher than her husband’s score. She attributes it to those early years of boosting her score under her dad’s tutelage.
Daley’s dad also taught her how to save up for big purchases and how to live within her means. Now a research assistant in the process of moving to New Hampshire from Oregon, Daley thinks it helped that he didn’t give her money or buy things for her, but just advised her about how to make good decisions.
Knowing how to use credit has meant that Daley doesn’t avoid borrowing money when it makes sense to do so. She and her husband have sometimes carried credit card debt for short periods, she says, but only when they were able to get very low interest rates.
“It was better value to carry the credit card debt with a low interest rate than take out a loan,” she says.
Daley’s parents’ extreme frugality taught her something else as well: that she doesn’t want to be obsessed with saving money at the expense of enjoying her life.
“Sometimes you have to let it go a little,” she says. “It’s the balance.”
The takeaway: Using your credit card regularly and paying off the balance is best for your credit score.
Doris Prendergast was 21 when she immigrated to Brooklyn, New York, from Panama. Her sister-in-law, Mary, who was already living in Brooklyn, gave her advice about how to make it in America. Luckily for Prendergast, much of that advice was financial.
Now 79, Prendergast still tries to live by Mary’s advice.
“If you have a dollar, save a dime. If you have $10, save a dollar,” she says.
“I opened my first savings account with 1,000 pennies,” she says. “Ten dollars. I sat there and I wrapped them and took them to the bank and trust company.”
While raising her five children, Prendergast took a job at a bank, and many of her co-workers were young men studying finance in college. Already adept at saving, Prendergast learned about amortization, the way interest on a big loan such as a mortgage works over time.
“I was getting my education on my lunch hour from young men that were 25 years my junior,” Prendergast says.
Armed with knowledge about saving from her sister-in-law and about debt from her co-workers, Prendergast has gained a reputation in her family for being adept at financial management. She has worked hard to pass on her skill to her children, her grandchildren and even her great-grandchildren — with limited success. Prendergast shakes her head over the granddaughter who spent big money on Beyonce tickets.
“I got to this point in my life with no credit card debt,” she says. “And it was from being frugal and persistent.”
The takeaway: Understanding how interest is calculated on both savings and loans can be a huge advantage.
Lyz Lenz learned a lot about money from her parents. But she’s had to work hard to unlearn most of it.
“They tried, and I love them, but they were not good with money,” says Lenz, a freelance writer and mother of two in Cedar Rapids, Iowa. “It was always kind of feast or famine in our house.”
When Lenz and her college boyfriend decided to get married, his parents helped them work out a budget, and Lenz began to study the art of frugal shopping with her future mother-in-law.
“Watching my mother-in-law shop is amazing,” she says.
Because of their frugality, Lenz and her husband were able to pay off $60,000 in student loans in only eight years. Every year they look at their progress and plan for the year ahead. Because money was such a source of stress in Lenz’s early years, she sometimes brings tension to these meetings, she says. She’s also had to push back in some areas, like when her budget-conscious husband allotted only $5 a month for Lenz’s beauty products and hair care.
“I’m not a fancy lady, but that’s just not enough,” Lenz says. “How much do you think a haircut costs?”
Now Lenz is excited to pass on positive ideas about money to her children. Her 4-year-old daughter, she says, is just starting to understand money.
“I’ve started by being open and honest,” Lenz says. She’s determined not to teach her daughter the painful money lessons she herself learned as a child — that prosperity is fickle and money a source of anxiety.
The takeaway: Budgeting and savvy shopping can help you achieve bigger goals, such as reducing debt or saving for a home, and can be learned later in life.
Becoming your own mentor
The family caregiver
Elizabeth Mangum’s parents did their best to help her with money, including taking over her car payment in high school when Mangum got in over her head. But Mangum thinks that generous move did more harm than good.
“If I had been responsible for that, and had given up my car or had it repossessed, I would’ve learned my lesson,” Mangum says.
When Mangum moved from her native Mississippi to Denver in her 20s, she racked up $10,000 in credit card debt in just over a year. She wasn’t living extravagantly; she was renting a 425-square-foot apartment and ordering appetizers instead of entrees when she went out with friends. But she needed winter clothes for the first time, and the cost of socializing added up quickly.
“That’s when it all kind of hit me — oh my God, this is not what I want,” Mangum says.
When her parents asked her to move back to Tunica, Mississippi, to help them, she got serious about paying off her credit card debt.
“I had it whittled down within three years,” she says.
Not having any debt has helped Mangum ride out a layoff and gave her the flexibility to travel when she was able to save enough money. Now in her early 40s, Mangum is a full-time, unpaid caregiver for her father, who suffers from dementia.
“I have lucked out, and my parents lucked out,” Mangum says. “We were blessed that I got out of debt.”
Now Mangum thinks a lot about the kind of money mentor she would’ve liked to have had.
She might have made better choices, she says, “if somebody had taught me how much that extra debt would weigh on my shoulders.”
Mangum is now helping her parents get out of debt by doing their shopping for them.
“I’m not an extreme couponer or anything like that, but I get things on sale,” she says.
She’s also laying the groundwork for teaching her nieces, ages 9 and 4, about money management by giving them a budget to spend on small toys when they go shopping together.
“I try to help them figure out their choices, but not push the choices on them,” Mangum says. “Money was not talked about when I was little. I’m talking about it with my nieces.”
The takeaway: Letting young people learn from their mistakes can be better than bailing them out.
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The bottom line
Many people find money mentors in unlikely places: in their spouse’s family once they marry, in the form of co-workers or even friends. And some people teach themselves how to spend wisely and take that knowledge back to their own families.
If you don’t have a money mentor, their stories may be inspiration for a healthier outlook on money.