12 Great Money Rules Your Parents Should’ve Taught You

A little careful planning today can significantly improve your financial outcomes tomorrow.
Updated April 9, 2024
Fact checked
young woman holding money banknotes

We receive compensation from the products and services mentioned in this story, but the opinions are the author's own. Compensation may impact where offers appear. We have not included all available products or offers. Learn more about how we make money and our editorial policies.

Parents have a lot to teach their children, from how to behave in public to how to succeed in school and beyond.

That’s why it's understandable that some may have forgotten to pass on lessons and tips for how to manage finances — especially if these parents weren’t savvy with money themselves.

But there are some rules that are essential to learn no matter what stage of life you're in. From ways to build wealth to preparing for retirement, following are some important money lessons your parents should have taught you.

If you’re over 50, take advantage of massive discounts and financial resources

Over 50? Join AARP today — because if you’re not a member you could be missing out on huge perks. When you start your membership today, you can get discounts on things like travel, meal deliveries, eyeglasses, prescriptions that aren’t covered by insurance and more.

How to become a member today:

  • Go here, select your free gift, and click “Join Today”
  • Create your account (important!) by answering a few simple questions
  • Start enjoying your discounts and perks!

Important: Start your membership by creating an account here and filling in all of the information (Do not skip this step!) Doing so will allow you to take up 25% off your AARP membership, making it just $12 per year with auto-renewal.

Become an AARP member now

Start saving for retirement

Rawpixel.com/Adobe senior couple using laptop

Arguably the most important thing you can do for the health of your financial future is to start growing your wealth and saving for retirement, regardless of where you are in life.

This is something you can ideally do over the course of your entire career, but the sooner you start, the better. You can set up a 401(k) plan with your employer or invest in a solo retirement account. You might even qualify for employer contributions.

Pay yourself first

EverGrump/Adobe young lady in home clothes making notes in notebook

Always pay yourself first. That means you should automatically earmark a part of each paycheck for savings before you spend it somewhere else. This is a surefire way to make sure that you are saving money.

Save smart

lovelyday12/Adobe business accounting saving money

In addition to retirement savings, you should have a savings account with two to three months of income in case an emergency arises. Consider investing any other savings you accrue in the stock market, which could give you a better return on your investment.

If you’re unsure of how and where to allocate your savings, work with a financial advisor to develop the best possible plan for your money.

Resolve $10,000 or more of your debt

Credit card debt is suffocating. It constantly weighs on your mind and controls every choice you make. You can end up emotionally and even physically drained from it. And even though you make regular payments, it feels like you can never make any progress because of the interest.

National Debt Relief could help you resolve your credit card debt with an affordable plan that works for you. Just tell them your situation, then find out your debt relief options.1

How to get National Debt Relief to help you resolve your debt: Sign up for a free debt assessment here. (Do not skip this step!) By signing up for a free assessment, National Debt Relief can assist you in settling your debt, but only if you schedule the assessment.

Try it

Find a way to make money while you sleep

Syda Productions/Adobe man sleeping in bed at home at night

Find ways to create passive income, which is money that comes in without you having to work hard to generate it. Investing is one popular way to make passive income, as your money does the work for you.

You also may be able to generate passive income from a rental property or collect ad revenue from content you create.

Spend less than you earn

Jacob Lund/Adobe customer paying at a cafe with credit card

This is a simple and obvious tip that your parents should have taught you: Don’t spend more than you make, make it a goal to stop living paycheck to paycheck.

If you do spend more money than you earn, you are likely getting the money from someone else, or borrowing it from a lender. Neither option is good.

Spending more than you earn likely means you are in debt, and not saving enough money — if any at all. That is not a good financial position to be in.

Be wary of loans

LIGHTFIELD STUDIOS/Adobe businessman pointing at signature place in loan agreement

Borrowing money means you’re going to have to pay it back somewhere down the road, so make a plan for getting out of debt that accounts for that. Yes, some loans may be necessary — such as student loans or a mortgage. But be very smart about how you borrow.

Many people don't consider a credit card a loan but it could be one of the most dangerous forms of borrowing if you don't use them wisely.

Invest in yourself

Prostock-studio/Adobe young woman with headset studying online

Going to a four-year college and getting a bachelor’s degree — or completing a course of study at trade school — is usually worth it.

Higher education means you increase your earning potential when you enter the job market, so invest in yourself now for benefits that come later.

Pay off credit cards every month

volff/Adobe credit cards

Some parents will tell you to avoid credit cards altogether, but there’s a better option: Get a card or two and make sure to pay them off every month. This will help you to both stay out of debt and build your credit score, which is the backbone of your financial health.

Pro tip: Up the ante by using rewards credit cards, which can give you everything from cash back to travel discounts and discounted gas.

Diversify your revenue stream

Viktoriia/Adobe woman influencer in hat and glasses sitting on carpet recording a vlog

As cliche as it may sound, don’t put all of your eggs in one basket. Yes, you want a full-time job with benefits, PTO, and a shiny 401(k). But a side hustle is also a good idea. That way, if you lose your job for any reason, you have something to fall back on.

You can diversify your revenue stream by driving for a rideshare app, doing some contract writing on weekends, or flipping a house, to name a few options.

Earn cash back on everyday purchases with this rare account

Want to earn cash back on your everyday purchases without using a credit card? With the Discover®️ Cashback Debit Checking account (member FDIC), you can earn 1% cash back on up to $3,000 in debit card purchases each month!2

With no credit check to apply and no monthly fees to worry about, you can earn nearly passive income on purchases you’re making anyway — up to an extra $360 a year!

This rare checking account has other great perks too, like access to your paycheck up to 2 days early with Early Pay, no minimum deposit or monthly balance requirements, over 60K fee-free ATMs, and the ability to add cash to your account at Walmart stores nationwide.

Don’t leave money on the table — it only takes minutes to apply and it won’t impact your credit score.

Apply for a Discover Cashback Checking account today

Never buy a brand-new car

littlewolf1989/Adobe car dealership showroom interior with brand new vehicles for sale

Unless you’re very wealthy, it’s wise to avoid ever buying a brand-new car. Automobiles depreciate very quickly and steeply, meaning they’re not a good investment. If you try to sell the vehicle a few years later, you’re going to get much less than you paid.

Instead, purchase cars that have been leased for the first two to three years of their life. You can then reap the benefits of a car knowing the previous owner took the depreciation hit.

Never lend money to friends

Drobot Dean/Adobe happy cheerful young loving couples friends

It may sound like a tough stand, but there are several reasons you shouldn’t lend money to friends. For starters, that’s money you could have working for you in investments.

There is also a good chance your friend will never pay you back in full. So, you may wind up with a ruined friendship, or at least know that you have enabled someone with bad financial habits.

Live by a budget

Kittiphan/Adobe Stressed young woman checking bills

Everybody needs a budget. It helps you keep financial goals in full focus and prevents you from spending more than you have.

It also allows you to zero in on poor money habits and break them. Budgeting can help you prioritize saving money, which is vital to your financial health.

Bottom line

shurkin_son/Adobe Woman working out budget

Parents have a lot on their plates, which is why they might not have taught you the best lessons about how to plan your financial future, or why you may not have passed on these words of wisdom to your own children.

Fortunately, it’s never too late to start saving money and building wealth, which can greatly improve your future prospects.

Once you master your finances, perhaps you can even teach your kids the tips that they never learned. And wouldn’t that be a win-win situation for everyone involved?

Choice Home Warranty Benefits

  • First month free
  • Protection for unexpected expense
  • 24/7 claims hotline
  • Network of over 15,000 technicians

Author Details

Cat Lafuente Cat Lafuente is a Florida-based writer and editor with extensive experience in digital and print content spaces. Her own personal finance journey — particularly consolidating debt and paying it off, in turn boosting her credit score and becoming a homeowner — inspired her to join the FinanceBuzz team; she hopes she can help others do the same.

Want to learn how to make an extra $200?

Get proven ways to earn extra cash from your phone, computer, & more with Extra.

You will receive emails from FinanceBuzz.com. Unsubscribe at any time. Privacy Policy

  • Vetted side hustles
  • Exclusive offers to save money daily
  • Expert tips to help manage and escape debt