By Alaina Trivax, WCI Columnist
We spent a lot of time with my grandparents when I was a kid. My mom, brother, and I lived a few hours away from the rest of the extended family, but we would visit at least once a month and for much of the summer each year. My brother and I had our own bedrooms at their house and spent countless hours with them. Because we stayed with them when we visited, we didn’t just see the fun, “let’s do a craft!” grandparent side of their personalities—we also got to participate in their daily lives. We’d help with chores and projects, and we’d get dragged along to meetings and appointments.
My grandparents were married for more than 60 years, and they raised six children together. They lived long, full lives. They weren’t well off, but they worked incredibly hard and managed their money well. My grandpa, or Papa as we called him, was a first-generation Italian-American, born just before the Great Depression. My grandma was about a decade younger and was one of five siblings. He was a Navy veteran, though he was fortunate never to see combat; after the war, he graduated from an engineering school and got a job with General Motors. He worked for GM for 30 years and eventually retired with a full pension. My grandma raised six children and worked retail jobs—bank teller, sales associate, etc.—as their kids got a little older.
Raising six kids on an engineer’s salary sounds tough. Somehow, they built and owned their home, several of their kids attended parochial school, and they took annual family vacations. And, impressively, they also managed to save sufficiently for their retirement.
I was lucky enough to learn a few lessons from them as I was growing up. My husband, an early-career PM&R doc, and I keep these ideas in mind as we manage our family’s finances.
Learn from Others and Each Other
My grandma, Noreen, ran a women’s investment club in the 1980s and 1990s—Women Making Money Incorporated. Club members would gather at my grandparents’ house each month to learn about making investment decisions and managing their own investment portfolios. The women pooled some of their own money to develop an investment fund for the club. They developed a strategy together, selecting individual stocks to invest with the club’s funds. No one in my family has the records from these meetings anymore, but we know that they picked a few long-term winners, including Apple. As the group built the club’s investment portfolio, the women also gained knowledge and experience that helped them better manage their own personal holdings.
My Papa served as an advisor and mentor to my grandma in managing the club. According to my aunt, my grandma would always run upstairs to “ask Louie something,” but he never came down—leading many members to wonder if there really was a Louie!
We don’t run an investment club like my grandparents, but my husband does manage a financial lecture series for his residents and I share our financial experiences here. We try to have monthly meetings to review our short-term finances and sit down twice a year for a more in-depth review of our overall portfolio. Because we each manage a different area of our financial lives (I oversee our short-term expenses and budget, while my husband oversees our long-term plan), we have to teach each other a bit during these conversations.
Talking about money can be an emotionally loaded topic to begin with—adding the concept of teaching your spouse about a specific aspect of financial management only adds to the fun. There’s a fine line to walk before it gets too tense! So, just like the members of Women Making Money Incorporated, we also rely on others to expand our knowledge–like The White Coat Investor and friends in similar financial situations.
More information here:
How Creating a Budget Helped Us Decide If We Could Afford $1,000 Plane Tickets
Dividing Responsibilities in Our Marriage to Accelerate Our Financial Independence
Know What You’ve Got
Louie kept meticulous financial records. (Meticulous records of everything, to be honest!) He kept his bank statements and investment summaries for decades and often annotated them with his questions and thoughts. He organized these documents in a filing system that enabled him to find any single record quickly. At any given moment, he knew exactly how much money he had and in what accounts it was held.
Noreen, who worked as a bank cashier for years, often helped my mom balance her checkbook. I remember my mom would bring a bag filled with check duplicates, checkbook registers, and receipts when we would visit. They’d sit at the dining room table for a few hours and balance everything. My grandma’s final word: it’s OK if it doesn’t balance out, as long as the bank’s total is higher than yours!
In my life, I’ve witnessed the transition from mailed statements to digital records. With the online records and e-statements, I’ve found it tempting to rely on the records housed on my bank and credit card websites. I certainly don’t keep individually annotated receipts for all my purchases like my Louie did. I do keep digital copies of receipts for big purchases or for those I might eventually need to submit a warranty claim on—things like appliances and electronics. I also review and categorize all of our expenses each month, applying my Grandma Noreen’s advice of allowing the bank to be right when things don’t balance out based on my records. All of the receipts from the more day-to-day Target trips, though? Straight in the trash. (Shh! Don’t tell Papa!)
Be Thoughtful About What You Outsource
Papa had a great deal of financial expertise, but it brought him comfort and security to outsource the daily management of his portfolios to a financial advisor at his credit union. He was a nervous guy and probably would have panicked a bit in a bad market. He needed someone else to see him through the stressful times.
Shortly after I started my first teaching job, he set me up to meet with “his financial guy.” We looked over my student loan balance, discussed a payoff plan, and reviewed my retirement savings strategy. He encouraged me to prioritize my retirement savings over paying off my student loans. The timeline and numbers we discussed were very different than the plan I’m working with now, but my income and debt as an unmarried teacher were also very different than they are now.
My mom still uses that same financial advisor, and we’ve run the numbers on his fees and reviewed the growth he generates—he seems to be one of the good guys. His strategy of prioritizing retirement savings over almost everything else is one that my husband and I still follow.
Louie appreciated his financial advisor’s expertise; that was pretty much the only service he outsourced. They lived on a good-sized chunk of land, and he spent a few hours on the lawn mower once a week well into his 80s. Most home projects were of the DIY variety, with his kids bringing additional assistance and experience.
My husband and I appreciate my grandparent’s wisdom here, but we’ve gone the opposite route as far as financial management. We educated ourselves enough to oversee our finances and investment portfolio rather than outsourcing this. Having thought a lot about the value of our time and our goals for our money, though, we are willing to outsource some household tasks to save a bit of time and energy. Right now, we’re exploring the idea of having someone help with some housekeeping chores—the cleaning, laundry, and meals—so that we’re not spending our precious free time scrambling to get things done.
More information here:
What’s the Value of Our Time, Anyway?
Spend When It Counts
Lou and Noreen were undoubtedly thrifty, but still, they spent money on what mattered. They took a few trips to the tiny Italian mountain town where my Papa was from and spent money on their kids and grandchildren. These are our values as well—we want to use our money to enjoy our lives while making memories with our kids, extended family, and friends. And, like my grandparents, when we spend money, we’re willing to pay a little more for a quality experience or service.
Even my husband, who only knew my Papa for a few years as his health was failing, recalls his insistence on doing things once and doing them right. He took great pride in his work, and while he was frugal, he’d spend money if necessary. He just wanted to be sure he was spending it in a way that counted.
We recently had one of my grandfather’s old watches cleaned and restored as a holiday gift for my mom. As the family budgeter, I told my husband what we could spend. When he called me after dropping off the watch for repair, he opened with a story:
“Well, I know Papa meant a lot to you guys. He was a good dad and grandfather, and he took a lot of pride in his work and his things. He took care of his stuff. So, if we’re gonna do this, if we’re gonna get this watch repaired, I just really think we have to do it right. It’s going to cost a little more than you planned on, but I think we have to do it right to honor him, you know?”
How am I supposed to argue with that? We got the watch serviced, and it turned out beautifully. As our financial flexibility increases, we try to model some of my grandparents’ values in our spending and, ultimately, to remember that money is a tool to help us enjoy our lives.
More information here:
Financial Flexibility – Don’t Spend It All at Once
A Life Well Lived
My husband and I prioritize financial stability and joy, having a solid plan for emergencies, and then spending money on our family and making memories with our kids. We’re almost four years post-fellowship and still live in the 1,100-square-foot home we bought during my husband’s residency. We’re absolutely ready to move somewhere with more space, but we’re willing to wait on that until we can get my husband’s student loans paid off. (This is the year!)
Between my Papa scheduling us joint appointments with his financial advisor and watching my grandma diligently balance my mom’s checkbook, I learned a great deal about money management from my grandparents. These explicit and observed lessons continue to impact my approach to finances today.
What did you learn from your family members about finance? Does that knowledge impact how you live and spend today? Comment below!