MIDYEAR REVIEW OF INVESTMENTS AND PERSONAL FINANCE : Personal Best

We publish advice and insights from all sorts of investment and personal finance experts--much of it contradictory. So to find out what works in real life, we went to the source, asking our readers to recount their all-time best financial decisions. From hundreds of letters, faxes and e-mailings, we’ve selected a few of the most interesting to publish or excerpt. Thanks to everyone who contributed.

An Early Lesson in Living on a Budget

As it turns out, my best financial decision actually had nothing to do with my own initiative.

Before starting college in September, 1969, my parents decided that I should take an active role in my own financial planning. We sat down and itemized every expense I would have that first quarter. Since I was going to live in the dorm, my expenses included tuition and books, a cafeteria meal ticket, clothing and spending money. After deciding on an appropriate figure, my parents wrote me a check, and it was deposited into the checking account I had been maintaining for several months.

The understanding we had was that I would not receive any more funds that quarter. Period. If I ran out of money, I would have to spend my savings. If I budgeted correctly, I could keep whatever remained.

Our agreement continued each year thereafter. Adjustments were made accordingly. For instance, when I moved out of the dorm my sophomore year, my quarterly budget included tuition and books, rent, utilities, food, clothing and spending money.

Fortunately, my parents had the foresight and financial ability to provide me with such an outstanding lesson on fiscal-monetary responsibility. Although I do not recall ever dipping into my savings, I know I came close a couple of times. To this day, I have never bounced a check, nor have I been overdrawn. This early lesson has held me in good stead for my entire adult life. Of course, it wasn’t until much later that I realized how truly lucky I was.

Tina Lewis Talbott

San Diego