By Jeanne Sahadi, CNN Business
Maybe you have a natural affinity for making and managing money. Or maybe you’re just trying not to make a hash of it.
Either way, someone at some point in your life likely dropped a pearl of wisdom in your lap that made your financial life better than it otherwise would have been.
We asked readers to share the best financial advice they’ve ever received.
Don’t just pocket your raise. Invest half in your 401 (k) … every time
Some advice is so good that you can take it to the bank.
This is exactly what Stevan Vigneaux did in the mid-1980s.
He was in his early thirties and worked as a technical director at a local television station in Hartford, Connecticut. The station’s vice president of engineering pushed him to save in the company’s 401 (k), which offered a generous matching contribution.
When Vigneaux said he couldn’t afford it – he and his wife, a schoolteacher, had just had their first child and had bought a “money pit” for a house – his boss pushed harder.
âHe said, ‘Yes you can, and you must. When you get your next raise, stop the half, you’ll never miss it, âVigneaux recounted.
The boss took it a step further, telling Vigneaux to invest half of every raise he gets from that point on until he maximizes his contributions. âYou’ll be glad you did,â the boss said, noting that it would be foolish to pass up the company’s free game money.
âIt’s 35 years later, and he was right on all counts,â Vigneaux said. “We never missed the portion of the increase we spent on savings.”
Vigneaux has since given the same advice to friends and family. And now, mostly retired, he says he and his wife aren’t wealthy but live comfortably without financial stress.
If you can’t pay for what you buy in full, please don’t charge it
Credit cards should be used as a financial convenience, not as a crutch.
This was the underlying message of what Brian Schmidt’s father told him when he went to college.
âMy dad told me it was okay to use a credit card, but he never had a balance. I have followed this to this day. I use my credit card for most purchases, but I pay it off monthly. Never keep a balance on a credit card because of the high interest rate, âSchmidt said.
The lesson also influenced his thinking about other debts. “I always thought that if I couldn’t afford to pay, I would wait, unless it was ‘good debt’, like taking out a mortgage on an appreciating asset.”
Now at 46, Schmidt said he and his wife had no debt, having paid off their mortgage in 16 years. Their plan now is to get their 16-year-old son to college – giving him just one credit card and his grandfather’s wisdom.
It’s never too late to invest
Ten years ago, at age 55, Michael Blount made his first real foray into investing. Close to retirement after a 23-year career in the military, he decided to invest a small amount of money with a broker.
Since he wasn’t working with hundreds of thousands of dollars, Blount said, âI was afraid the broker might laugh at it. But he did not do it. Instead, the broker suggested placing the money in index funds.
Soon after, Blount said, he listened to a series of personal finance online course. It was during one of these conferences that he heard what he calls some of the best financial advice he has ever received: âThe best day to invest was yesterday. The next best is today.
He decided to take the accumulated gains in his index funds and invest them in some top tech stocks, including Apple, Amazon and Microsoft.
He said he thought, “I’ll take a chance.”
His bet – and his timing – paid off rather well. He said he was lucky enough to buy Amazon at $ 800 a share, for example, and today it’s trading at around $ 3,500.
After retiring from service in 2015, Blount became a Federal Contractor. He is 65 today and plans to work until he is 70. pension is not important, he will rely on his stock portfolio to increase his retirement income, as well as some previous savings that he set aside in the federal government’s savings plan.
He knows he is lucky to have gone public when he “went awry” out of the Great Recession. And he’s thankful that his wallet has performed well. “It certainly takes the pressure off,” he said.
Budget for all your needs, including fun
Trying to stick to a diet so rigid that you can never eat what you really love is a waste of time because you are going to ruin everything. The same goes for a hyper-strict budget.
Three years ago, when she was 22, Sarah Williams got her first job out of college. But she did so little that she bartendered at night for extra money. Even then she couldn’t Make two ends meet between his living expenses, his credit card debt and his student loan debt.
Based on her general idea of ââwhat she was getting each month, Williams would try to budget, but usually fail because she didn’t have a realistic idea of ââwhat she was spending.
A co-worker then gave him some advice.
âShe used to say to me, ‘Set a realistic budget and make sure you include the things you like to do for fun or for yourself. Then the budget doesn’t seem restrictive, it looks productive, âWilliams said. âIt had a huge impact on my life. “
For her, that meant recognizing that she will regularly “blow a lot on Amazon”.
So she set a dollar limit on Amazon purchases and set aside money for the occasional weekends she does with her boyfriend, as well as a $ 50 monthly gym membership.
She also established a timeline for reducing her debt, starting with the lowest credit card balance. And throughout the pandemic, she continued to make her student loan payments even though she was allowed to defer them.
Today, at 25, Williams works as an IT director at a financial consulting firm, graduates from graduate school and said she had reduced her credit card debt from $ 7,000 to less than $ 1,000.
Retirement is easy to solve if you start saving in your 20s
Gary Anderson credits his father for teaching him early on the importance of saving for retirement.
âHe started pestering me the moment I got my first job out of college,â Anderson said. “I wasn’t good with money in my early twenties, and I cannot say that I immediately took his advice. But I heard it, and as I was a little more financially comfortable [in my late 20s], I started increasing my 401 (k) contributions with every pay raise until I hit the maximum.
He then encouraged his future wife to do the same. Now in their early 50s and hoping to retire as soon as possible, they’re glad they did, Anderson said.
When he flew to visit his father shortly after his father was diagnosed with Alzheimer’s disease, his father assumed Anderson’s mother had paid for the trip.
“It pained me to realize that my father did not understand that thanks in part to his advice, I had long since achieved a level of financial comfort that I could afford to come and see for myself,” said Anderson.
Never spend money behind your spouse’s back
Wayne Nelson’s father, a Swedish immigrant who worked as an electrician in steel mills, shared a lot of financial advice with his three children. For example, said Nelson, the first check you write is to give to others each month, and then to yourself in the form of savings and investment. âAt dinner we talked about how the ‘Nelson stocks’ performed today,â he said.
Next on the list: Never have more than one mortgage and car payment at a time and have no other debt.
But Nelson, a former teacher who is now a real estate broker at 78, talks with great affection about the next item on his father’s list: before you get married, agree with your future spouse that you will never spend money behind each other .
âSpending behind your spouse’s back is to defy the marriage contract and lead you to divorce court,â Nelson said.
In his own marriage – which has now lasted for 50 years – Nelson said that he and his wife, Susie, who was also a teacher, never bought anything without first checking with the other – whether it was a Macy’s or a toy for their daughter.
They took it a step further: âWe both agree if there is a major financial purchase and one says noâ¦ the other can’t have bad feelings. “
Nelson said they have had arguments over the years, particularly when he was struggling with PTSD after Vietnam. âBut we never had a single argument for money. Not one.”
Family is always more important than money
People make a lot of jokes about how boring or difficult in-laws can be.
But Elliot Pepper can’t say enough good things about his in-laws, to whom he credits convinced him to go to college and then offered him encouragement as he explored different professional opportunities.
âThey have had a profound impact on my life,â said Pepper. “Without them I would have been a hot mess.”
Now a financial planner who also teaches a high school course in financial literacy, Pepper acknowledges that his in-laws almost certainly had an alternate motive for encouraging him to find his way in life, than with his marriage to their daughter, Shira, when he was just 21.
But for him, the most important financial wisdom they ever imparted had less to do with how to make money than with how to use it well.
âThey always made sure that their kids could get the education they wanted,â Pepper said.
Her in-laws would pay for distant relatives to attend family reunions. And most impressive was how much they supported their own aging parents.
Pepper says, “Money [my in-laws] was not just for them to be comfortable.
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