Mother knows best: Your first personal finance teacher

By , CardRatings contributor

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Whether they intended to or not, Mom and Dad gave you your first lesson in personal finance. Hopefully, one or both of them took an active role in teaching you about money. And let's go one further and hope that the experience was a positive one that you chose to model later in life.

According to a recent survey of children by the National Foundation for Credit Counseling, only 35 percent said their mother is "pretty savvy about managing money and enjoys it." The other 65 percent said Mom avoids financial matters, doesn't enjoy managing money, or has never managed money.

Parents get the blame for not teaching their kids about finances in the fifth annual Parents, Kids & Money Survey by T. Rowe Price. In that survey, 73 percent of parents said they have "regular conversations with their kids about money." However, they report that they are discussing short-term financial matters such as back-to-school shopping. Fifty-nine percent of the kids surveyed say they go to their moms with money questions. When moms were asked if they were good financial role models, 36 percent gave themselves a C or below.

We asked a few well-known personal finance experts to tell us what they learned about money from their moms.

Money doesn't grow on trees

Parental embarrassment is a common theme for adolescents on many fronts. When you're young and haven't yet learned the value of every dollar earned, it can be embarrassing to witness limits on your parents' income. Whether it's out of choice or necessity, watching your parents nitpick over a few dollars or hand over piles of coupons can feel like someone is shining a spotlight on your parents' budget. Moms who help their children to understand the value of a dollar early on are doing a lot to ensure that peer pressure and frivolous spending don't become a way of life for their kids.

"I was always amazed and a bit embarrassed by my mom's cheapness," says CardRatings.com founder Curtis Arnold. "She was into extreme couponing many years before it became vogue. And while it unnerved me to be the center of attention at the checkout counter at our local supermarket, Mom taught me some financial lessons that lasted a lifetime. You simply can't put a price tag on that."

Maybe that's why Arnold went on to become a nationally recognized consumer educator and advocate.

"I have since embraced much of my mom's outlook on spending money wisely. Instead of being cheap, though, I proudly tell my own kids that I'm frugal."

Do as I say, not as I do

Did your mom tell you to hold off snacking to avoid spoiling you dinner, but you caught her snacking while cooking? There isn't a mom who hasn't been faced with her own hypocrisy at some point in her parenting journey. It's a great reminder that the financial behaviors you model have a lasting impact as well, far beyond any wisdom you're trying to impart verbally (they're probably not listening, anyway).

Robert Brokamp, retirement adviser at The Motley Fool says, "Everyone has a spending thermometer - some internal measure of when spending is getting too 'hot.' I got my spending thermometer from my mom. She wasn't always explicit about it; I just observed her going about her life - back-to-school shopping, going on vacation, getting groceries - and she'd reach a point where she'd say, 'OK, we've spent enough money.' Fortunately, her financial boiling point was pretty low. Thanks to Mom, I developed a good sense of when my wallet was showing signs of potential fever, and it was time to give it a rest."

Invest in your future, but enjoy the present

Smart moms know that everyone needs a reward for good behavior every now and then. Even if you're on a tight budget, a little indulgence proportional to your budget can teach kids that staying financially focused doesn't have to mean money martyrdom.

"My mom was awesome when it came to money," says Liz Weston, award-winning columnist and personal finance author.

"She had the aversion to debt that many people born in her generation had (she was a Depression-era baby), but she didn't shun the stock market, as some of her peers did. In fact, when dividends came in from the stocks she and my dad owned, she often used them to treat us to dinner out (our middle-class family didn't dine out very often in those days). That created some pretty positive associations about investing!"

Moms everywhere are just trying to do the best they can. If your mom was able to impart some financial wisdom that's had a positive effect on your life, then maybe remember her this Mother's Day with a little something special. But don't go into debt over it - Mom wouldn't like that.


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