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Dollars & Sense: Taking Mom’s Financial Advice

By Roberta L Nestor

Mother’s always know best, but yet we still question some of the advice given to us by our mom’s – especially when it comes to finances and when that advice sounds crazy and old-fashioned.  Here are some interesting topics involving mom’s financial advice.

My mother always said, “Pay yourself first”.  What does this mean?  As soon as you get your paycheck, first put aside money in your savings account and do this before you even begin to pay for groceries or paying bills.  If you start thinking of personal savings as the first bill that you have to pay each month, it could help you build tremendous wealth over time.

“I am 30 and soon to be married.  My mother insists that I get a pre-nuptial agreement and I think she’s crazy!”  Pre-nuptial agreements are often viewed in a very negative light, especially when it is for a young couple celebrating their first marriage.  As the Millennial generation is set to inherit more assets than any other generation, many baby boomer parents are concerned about protecting an inheritance for their own children.  A pre-nuptial agreement can offer that protection.

“My mother told me I should be contributing to my retirement plan at work.  I just got my first job after college and she insists I contribute to the company’s 401k plan.  I have college loans to pay off and can’t afford to save anything right now!”  Mom is right on this one, especially if your employer matches your 401k contribution.  For example, if you contribute 3% of your pay, they will contribute 3% as well.  That is free money for your future!  If you are single, and not a home-owner and perhaps living at home – now is the time to save!

“My mother told me I need to buy more life insurance.  My husband and I are both 32 and just bought our dream home.  My mom keeps bugging me about it.  She knows we both have life insurance at work, but she says it’s not enough.”  The life insurance coverage you have at work is generally based on 1 or 2 times your salary, and only valid if you continue to stay with your current employer.  If you lose or change jobs, your new employer may not even offer life insurance options.  Also consider the amount of insurance, would 2 times a spouse’s salary pay off the mortgage?  Even if it did, what about income replacement?  Being young and in good health is another reason.  Insurability is a key factor these days and underwriting with life insurance companies is more stringent than ever.  One’s health can change quickly and if providing a home, having children and ultimately putting them through college is in the picture, additional life insurance can’t hurt.

My mother always said there are 2 types of money, smart money and stupid money.”  Start with separating all big purchases into two categories – smart money and stupid money.  Smart money is saving for things in your future, like retirement, vacations and home renovations.  Stupid money is paying to get your car back when you parked illegally and it got towed.  We all make mistakes with our money.  The smart thing to do is to move on and learn from them.

Happy Mother’s Day to all of our financial savvy Moms!

Roberta L. Nestor is a financial advisor practicing at 491 New Haven Avenue in Milford, CT offering retirement, long term care, investment and tax planning services.  She also offers securities and advisory services as an Investment Adviser Representative of Commonwealth Financial Network – a member FINRA/SIPC and a Registered Investment Adviser.  Fixed insurance products offered through Nestor Financial Network are separate and unrelated to Commonwealth.  Commonwealth Financial Network or Nestor Financial Network does not provide legal or tax advice.  You should consult a legal or tax professional regarding your individual situation.  Roberta can be reached at Nestor Financial Network, 203-876-8066 or

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