By Abby Wolfe

One night a few years ago, as two friends and I were deciding what to do, I found myself shooting down pretty much every suggestion. Going to the movies was too expensive, and no—I did not want a $14 glass of wine at that fancy new bar.

Overhearing our conversation, my mom chimed in: “Abby, don’t be so cheap all the time!” she said. (And here I was thinking she’d be proud of me for not wanting to throw away my money.) It’s really okay to have a little fun sometimes, she explained—a little wiggle room is actually a crucial part of a sustainable budget.

The exchange underscored how, even as an adult, my mom has a lot of financial wisdom left to pass on—something she’s been doing since I was a kid. Here are some of the most impactful lessons that have shaped the way I manage money today.

1. Spend less than you earn.

In high school, my brother and I got a $60 monthly allowance—which came with a few strings attached: We had to save $20 for the future and donate another $20 to church or a charity, like Make-a-Wish Foundation. My parents wanted us to get in the habit of saving and giving back, so that by the time we were managing our own money, it’d be second nature.

Fast-forward 10 years or so, and while I’m not following this split to a tee, the lesson did stick. I automatically earmark at least $100 from every paycheck for savings (and plan to increase that rate as I earn more) and donate to a few charitable causes.

2. Track everything you spend.

I always watched my mom balance her checkbook as a kid. And before I left for college, she taught me to balance my own.

Thanks to mobile banking, my checkbook and I don’t spend much time together anymore. But I’ve never stopped tracking my spending, which is the underlying lesson here. A few times each week, I check my bank balances and scan my purchases. This helps me recognize and nip overspending, and catch and fix errors quickly, like when a restaurant doubled the tip I wrote down.

3. Align your spending and values.

My mom once told me, “If you really want something, you won’t mind spending money on it.” At the time, I rolled my eyes because I was asking her to buy me something. But now, I really appreciate this advice, as it’s made me mindful about only purchasing what’s most important to me.

These days, before I buy, I ask myself, “Do you really want or need this? Really, really?” If I’m unsure, I don’t buy it. But if I’m still pining after it after leaving the store, I’ll allow myself to go back and get it.

4. Make your money work for you.

My mom always tells me not to keep all my money in my checking or savings accounts. Why? Because it’s not doing much for me there. In fact, as inflation rises, my money actually loses value in a bank account. (The rate of inflation, or how much prices are going up, is about 2 percent as of March 2018, while even high-yield savings accounts are only paying around 1.5 percent in interest annually.) That’s why I invest in dividend-paying stocks. In November, I got $139 from two companies simply as a “thank you” of sorts. It’s not a fortune, but it’s much more than my money would’ve earned in savings. And just last month, I invested $5,000 in stock funds through a Roth IRA. After seeing my employer-sponsored retirement account increase dramatically last year, I’m excited to see how this $5,000 can grow.

Originally published at