My mom was hugely influential in teaching me my first money lessons and instilling good financial habits at an early age. The underpinnings of her knowledge and encouragement were invaluable and still are to this day.
Coming from a prosperous family, she learned about hardship at an early age. Separated from her family, they perished at the hands of the Nazis. With $5 in her pocket from the US government, she made her way to the states in her early twenties.
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Optimism In Her Future In America
She had lived in the Lodz Ghetto, forced labor camp, and then transferred to a refugee camp for the better part of eight years. Due to a back injury from being severely beaten, she spent a year in a hospital. Devastated from her experiences and losing her entire family, my mom was optimistic about her future in America. She wanted to able to take care of herself despite being destitute.
Mom never finished high school, but she knew at least three languages, was highly praised as a manager of Barton’s Candy, and started up two successful retail businesses. Unbeknownst to my father, or anyone for that matter, she left over a million dollars when she passed away. She worked tirelessly, obsessively saved, and invested her money.
Some of her teachings were extreme, and she was pretty quirky at times. In many ways, my mom was a trailblazer when it came to money. She believed women should be financially independent, have their own bank accounts, and invest their savings. I am forever grateful for all that she taught me, especially her money lessons that were priceless.
Valuable Money Lessons
Although she was not academically educated, she was incredibly savvy and read many books to learn. My children never met my mother, but fortunately, she passed on these valuable lessons to me so I can share them with my children.
Anyone who comes off a boat with few dollars must be resourceful and encouraged to be so. We had to make do in our modest household, but we never felt deprived in those years growing up.
Secondhand television sets, used cars, old bicycles were ours without apologies. Learning to borrow things like library books was fun to do. Relying on creativity, imagination, and having a persistent nature are traits that benefited me in my career as an equity analyst and professor now.
Needs Vs. Wants
Growing up, we knew about buying only necessities while everything was luxuries we couldn’t afford. For me, a Spalding to play to catch with my younger brother could be justified since both of us would play with it. However, we had to get a used ball that didn’t bounce very high. She did not allow us to pay a quarter for a can of Coke which had no redeeming value, preferring the money better spent on a quart of milk.
My kids, now in their teens, are living in different circumstances than I did. However, that doesn’t mean they should become spendthrifts. On the contrary, I reinforce the difference between needs from wants as an essential lesson.
Mom was an obsessive-saver from the beginning of her newfound life in America. Settling in the Bronx, she first worked in sewing factories before being eyed by someone who needed a salesperson at Barton’s. There, she learned to speak English and the language of business, learning bookkeeping, managing inventory and sales. She shared an apartment with a friend and became a manager for Barton’s in the Bronx stores.
At first, skeptical of banks, she became comfortable about having her savings and checking accounts, visiting the bank to make deposits. Eventually, she married my Dad and had my brother and me. Savings were her mantra, and setting aside money for potential unknowns she said was always lurking around the corner. Hence, our family emergency fund was born.
Spend Less Than You Earn To Grow Savings
My mother taught me how important it was to save what you earn and not spend it freely. Your money has many jobs to do, starting with paying your bills on time and taking care of your needs. When there is money left over, it is savings for emergencies or your future needs.
Saving money was only the first step to making more money. By putting it into the bank, you can expand your money through compounding. My mom opened a roll of pennies to explain how you can earn interest on interest. When I had learned the lesson, she took back the pennies to make more significant coins like nickels.
She opened up a bank account for me when I was about six years old. As I accompanied my mother to the bank, where she deposited money from the business, she often would introduce me to the bank officers. The bank had gorgeous Art Deco architecture, and Mom would tell me she felt rich putting her money in this particular bank.
Have Your Own Bank Accounts And Be Financially Independent
Mom kept her financial accounts separate from my Dad, except for joint accounts for the retail businesses. Like my Mom, I have always had my financial accounts different from Craig. Mom encouraged me not to disclose my earnings and investments to anyone, especially my husband. On the latter, I have always been open to Craig, more so than he has been with me, as I share in this post on financial infidelity.
My mother hid some of her money from my father. He played cards with friends weekly for entertainment and low stakes. Dad was a gambler before they were married. To a great extent, I believe that the practice of hiding money was due to her early experience when her family lost everything during the war.
Her encouragement was to have separate bank and investment accounts from a spouse so that I would never need anyone’s help monetarily. Mom went through substantial hardship, building a new life before meeting my dad. She was firmly responsible for her financial independence and was not letting go of her success. As a result, she wanted me to have my own goals to achieve in life and carve my own independence.
Being Frugal, Not Cheap
My mother was proudly frugal, not cheap, as she often discussed their differences. She scorned those who were cheap and focused on buying the lowest-priced items that often reflected the lowest quality. To her, frugality or thriftiness, a word she used more often, was a value proposition to weigh quality and affordability.
She was happier buying things for other people and us than for herself. Occasionally, I would recognize a new bag or an outfit and compliment her. Instead of mom seeming happy about her purchase, she would pivot to how great a price she paid. Sometimes her expression sounded more like remorse. Her sadness at being the sole Holocaust survivor of her family overwhelmed her with guilt, especially those few times she treated herself better.
The Dangers of Credit Cards
My parents never had credit cards or accepted them in their two retail businesses. Instead, they relied on cash and checking accounts. Neither parent was big on borrowing money for cars or their business. I believe they took a short-term loan for the initial inventory for the first hardware store.
When it came to credit cards, Mom was adamant about their dangers of promoting overspending for things you don’t need. To this day, I use credit cards carefully by paying my balances in full every month. Although Mom is no longer with us, I think she sends spiritual vibes with approval when I pay with cash and checking accounts.
Never Buy Impulsively
My mother’s favorite words, “Do you need it?!” That was driven into my brain even after I no longer was living at home. The message was to buy quality to have it for a longer time but buy it at a lower and preferably bargain price.
Whenever she took me shopping, there was a lesson to share with me. We would go to many stores no longer around now (e.g., Alexander’s, Ohrbach’s, Loehman’s), and she tells me to feel the material and look at the price. It was often exhausting, with little to show for the day. The big treat for me was going to the counter at Chock Full of Nuts and sharing a cream cheese sandwich on raisin bread with her.
To this day, I am rarely impulsive and can overly research what I need to buy. On the other hand, Craig can be excessively impulsive and overspend, an issue that I often write about and can send mixed messages to our kids, especially when they were younger.
Investing Was Her Passion
My mother and a group of her friends began investing in stocks and bonds, much to my father’s dismay. He worried that she didn’t know what she was doing and was not encouraging her even if it was just dabbling. I was proud of my mother but never realized how interested she was in the stock market, knowing her daughter was working for a brokerage firm.
At one point, I found out that she had a retail broker, Michael, at my firm (Drexel Burnham Lambert), where I was a telecom analyst. One day, he approached me, telling me he was buying ATT shares on a call I had made. I was baffled as I realized my mother wanted me to meet him and share her “secret of investing.”
About 15 years later, I learned that she had quite an investment portfolio of largely blue-chip stocks, various bonds, and some money markets. According to her broker, she called most of the shots in her portfolio and amazed him with her investment prowess.
You would not want to be on the other side of the bargaining table with my mother. Everything is up for negotiation, and she is going to work to get what she wants. My parents dragged my brother and me to these “Gift Shows” to visit showrooms filled with household goods and gifts that they would buy for their housewares store. When my Mom had made her selections, and it was down to volumes and prices, my Dad would suddenly disappear.
As the buyer for the business, my mother was well-liked but somewhat feared for her negotiation skills. She taught me that you need to value yourself first before engaging with the salespeople who had wiggle room in their price points, and she tried to find the lowest levels possible. Often successful, she would buy more as her business grew and remembered who had treated her well.
Negotiating is an essential skill, especially for women, whether for your business or getting better compensation. I wished I had my mom’s bargaining smarts. It did not come as naturally for me as for my mother. However, my 16-year-old daughter is advocating for herself in a way that would have made her grandmother very proud.
Money Isn’t Everything
When you don’t have money to pay your bills and basic living expenses, money is everything. Mom never wanted money to be our only priority and thought the obsession with money was a danger in society. My mother always recited my grandmother’s favorite saying, “Poor or rich, money is good to have.” Money has its purpose, but it has its limitations.
Our family encouraged us to focus on what we value, besides money. Value like time, energy, health, family, friends, community, work, ethics, and love of learning have their worth. As financial scandals became more commonplace in the investment world, she worried that I was working too hard and not spending enough time with family. Hence, money isn’t everything.
The Importance of Education
For someone who didn’t finish high school, academic education was a significant priority in our home. I received my MBA in accounting and finance (and went to law school after my Mom passed away), and my brother, Mark, became a doctor, something my mother wanted for him from the day he was born.
However, she stressed lifelong learning through reading and picking up new skills. We all were avid readers in our home growing up, and that continued in our respective homes. Education was an excellent equalizer in society. Mom believed educated people would be welcome everywhere.
Being Grateful And Generous
Her family owned the largest bakery in the city where she grew up. As a result, my mother was a great baker in her own right. As gratitude to many people who helped along the way and neighbors, she often baked elaborate cakes and cookies. My mom always made more food and invited others who had were worse off to join us for meals on holidays and other occasions.
When buying presents, she was generous to a fault, seeking the best quality for others. Then she would be less price-conscious because giving to others was more important to her.
Moms are so influential as our first and most respected teachers. Through hardship and strive, they share their experiences that instill in us lessons they want us to learn. I remember my first money lessons, which shaped my financial habits to this day.
My mom was not always right, especially when hiding her investments from my dad. She passed us the best she had to give my brother and me. In turn, I am sharing my knowledge with my children, knowing that they will have their own experiences with finances. What we all want to do is to impart the best of what we know as parents.
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With a passion for investing and personal finance, I began The Cents of Money to help and teach others. My experience as an equity analyst, professor, and mom provide me with unique insights about money and wealth creation and a desire to share with you.