The Importance of Leaving a Financial Legacy

By Jana

I’m Jana and I blog at Daily Money Shot, where I ramble about money at the intersection of life, pop culture and everything in between. And I’m thrilled and honored to be posting today at Careful Cents.

On Mother’s Day, Carrie wrote a wonderful tribute to her mother and honored her by talking about the different financial lessons she passed on. That post got me thinking about the kind of financial legacy I’m leaving my daughter.

I don’t come from a line of financially savvy women. My mother and grandmothers basically relied (or rely) on their husbands to do the brunt of the financial grunt work (paying the bills, managing insurance, monitoring investments, etc) and the attitude that was passed down to me was that a man will take care of it for you.

My mother and grandmother shop for sport (seriously, if shopping were in the Olympics, they’d medal. Every. Single. Time).

My mother has no idea how to balance a checkbook and her idea of scaling back is Dunkin Donuts coffee once a day and manicures twice a month. It’s kind of depressing, really.

Since I’m in the habit of breaking bad familial cycles, this is one I’m definitely taking on. I don’t want to be responsible for a 4th generation of women who haven’t taken charge of their own finances. So I did what I needed to do. I educated myself. I read blogs and books.

I took over our family’s finances and I’m now the primary financial manager. And it is my job to impart that knowledge onto my daughter. But if I had to pick 3 things I hope she learns, here they are:

  1. Be an active participant in your household’s finances. Sitting back and letting someone else control your entire financial future (and present) is not a wise choice.  She needs to know that if her money is contributing to the household, then she has a right—no, an obligation to understand how and where that money is being spent. She needs to know that she has just as much of a voice in deciding how to spend their money as he does. And she needs to use that voice to share her opinions and thoughts, particularly on major decisions like buying a house or a car. If there’s no husband, there’s no reason she can’t take charge of these decisions for herself.
  2. Understand your money and where it’s going. She needs to understand just how important it is to know what her money is being used for. This goes hand in hand with taking an active role in her finances. I want her to have a budget and know how to develop one. Know how to pay bills. Learn when those bills are due. Know what accounts have been opened and how to access them.  Discuss long term investments with your husband. Understand the different types of investments. And if there’s no husband, again, that’s okay. She can do this all on her own.
  3. Have a backup plan. Things, and life, happen. Husbands cheat, leave or die. Jobs disappear. People get sick. And while it’s not fun to dwell on events like these, it’s impractical not to. Speaking from firsthand experience, having a backup plan is essential to manage these types of situations. I want her to know that, while it’s perfectly acceptable to focus on Plan A, there needs to be a Plan B waiting in the wings. Just in case. I don’t want her left in a lurch because she failed to plan accordingly. Although I hope she never needs to use her Plan B, it needs to be there.

I’m sure there’s a lot more I want my daughter to learn from me. Like, don’t spend more than you earn. Or always have an emergency fund. Or don’t make big, impulsive, long-term purchases. Or that having debt will hold you back from your dreams.

It’s a pretty extensive list, now that I look at it. But I need for her to know these things. I need to break the cycle of female financial ignorance that’s been coursing through my family. That needs to be my legacy.

What financial legacy are you leaving for your children? 

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