What Our Mums Taught Us About Money

We've surveyed Morningstar's editors and experts to ask them what their mothers taught them about money, and there are plenty of interesting and powerful lessons

Larissa Fernand 9 March, 2022 | 10:49AM
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Woman lifting money

Women are intuitive savers and know how to get value for money. So I recently asked John Rekenthaler, vice president of research, Morningstar, to narrate the most valuable money lesson he learned from his mother.

His response startled me. “I can’t help you there. My father’s money lesson was, if you have it, spend it. He died broke. My mother’s money lesson was, “Your father handles the money.”

John has been extremely successful with his investments and management of his finances. In the same way that our relationship to food is shaped by childhood experiences, so, too, is our relationship with money. Clearly, he learnt what not to do.

This prompted me to reach out to other colleagues across the globe and ask them about the financial lessons they learnt from their mothers or grandmothers.

Christine Benz, Director of Personal Finance

  • Based in Chicago;
  • My mother displayed wonderful consumer behaviour;
  • My mother’s “less is more” philosophy was reflected across her behaviour.

She always kept a fairly minimalist closet, despite being financially comfortable. When she shopped for clothes, she sought out quality and refused to skimp because she knew she would hang onto whatever it was for a while. Being an exceptionally busy woman, she wasn't one to hunt around for the best bargain. She was focused, went shopping to get what she needed and that was it.

My mother hated food waste, for ethical/environmental reasons and also because it was anti-thrift. She often said: "The most expensive food is food you throw away."

She often talked about paying a bit extra on the mortgage each month. My husband and I diligently followed this advice. We were able to pay off our homes ahead of schedule.

Dan Kemp, Global CIO, Morningstar Investment Management

  • Based in London;
  • My mother taught me to be an intelligent spender;
  • My mother always focused on buying the best you can afford, without incurring debt. This would avoid you the expense of having to replace things often. That has been my top, and very valuable, learning.

Different nationalities notwithstanding, both mothers worked with an identical intention to that espoused by author Terry Pratchett in his 1993 novel, Men at Arms.

Captain Samuel Vimes is set to marry an incredibly rich woman. When opining about the differences between the spending habits of the rich and the poor, he explains it like this: A man who bought a really good pair of leather boots for $50 had a pair that would keep his feet dry for a decade. The poor man, who could only afford to spend $10 on a pair of boots, would probably have to get a new one every season or two. Consequently, he would have spent $100 on boots over the same period and still have wet feet.

Thus, the “Vimes' boots theory of socioeconomic unfairness” stated the reason the rich were so rich, was because they managed to spend less money.

I am also reminded of what Canadian businessman and Shark Tank participant Kevin O’Leary said in his book.

"I remember admiring a Chanel jacket my mother once wore. The jacket was stylish and beautiful, a black classic box cut. It looked like she’d just pick it up off the rack from that season’s new line, but then she told me that she’d bought it 20 years earlier!

"Knowing my mother, she would have saved and thought about this purchase for a long time before actually going through with it. But the thing is, she wore that jacket for decades. She didn’t dry clean her clothes every time she wore them. She steamed them now and then, to maintain their shape and colour. She never flung her clothes on the back of chairs but always hung them up on hangers."

Kemp echoes an identical sentiment; his mother was a savvy spender, careful with her money, but not a cheap shopper.

Ruth Saldanha, Editorial Manager

  • Based in Toronto;
  • My mother taught me how to be a relentless saver.

My mother was a homemaker and would squirrel away small amounts of money concealed in books, old purses or in a tiny box in the corner of a cupboard. Inadvertently, this turned out to be the emergency fund. I picked up this habit, and to this day there’s cash hidden in various places around me.

This worked out extremely well during Demonetization, as I was in India at that time. When the announcement was made, I rounded up all the cash I had hidden. The small notes added up to quite a sizable amount and helped me run my house for around a month. I was saved the stress and bother of hunting for ATMs that had cash and standing in long queues to withdraw money.

Leslie Marshall, Head of Experiential Marketing

  • Based in Chicago;
  • My grandmother taught me how to have a balanced view when it came to money.

Growing up during the Great Depression, mum was budget- and cost-conscious, and extremely hard working. She gardened, composted and grew vegetables. She reused and repurposed things, and was conscious not to be wasteful. She took great care of her things to get the most use out of them. She would have done well in today's sustainability mindset.

Be smart, but indulge. She taught me that when you get “extra” or unexpected money, you should do something you need to do (e.g: clear a debt, home repair or improvement) and something you want to do (e.g: vacation, a treat, a class).

She taught me an important principle of portfolio management. When my grandfather died, he had a lot of Ford stock (where he worked). Her financial adviser helped her diversify her investments to have a more balanced portfolio. Thanks to her savvy investment acumen, she became a wealthy woman.

My Observation

When Leslie mentioned the Great Depression, it reminded me of the vintage Good Housekeeping cookbook that included a "Wartime Supplement" that describes how to cope with WWII food rationing, especially staples such as sugar and meat.

While our ancestors may have been frugal from necessity, a lot of their money-saving tips are relevant today. The generations before us have a lot of accumulated wisdom that we can benefit from.

Finally, here’s my contribution from Mumbai.

According to my grandmother, spending must be done depending on what is valuable to you.

Nutritious food mattered. Excellent footwear could not be compromised upon because she walked everywhere. No expense must be spared for comfortable and sturdy footwear. Cut corners with the wardrobe if need be. It is perfectly fine to wear old clothes or hand-me-downs, but the expenditure should not come at the cost of food or footwear.

My mother’s advice was threefold:

  • Never waste money impressing others. No one deserves that much attention;
  • Strive to be financially independent, irrespective of your marital status. You never know what life throws at you;
  • Save as much as possible when you can, because there may be periods when you cannot afford to save anything.

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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About Author

Larissa Fernand  is Senior Editor of Morningstar India