Learning is a lifelong endeavor, and it starts as soon as we’re born. Parents set the bar for so many things — whether or not you’ll floss, send thank-you notes, admit when you’re wrong — and money management is chief among those early-life parental lessons. Much of that learning is intuitive; as anyone who’s babysat a kid for more than ten minutes knows, children are walking, talking, cookie-eating sponges. They absorb everything, and they (often unknowingly) incorporate their observations into future behavior. As I explained in my 10 Big Money Questions interview with Chelsea:
“[My parents taught me valuable financial lessons] in the day-to-day budgeting sense. My mother has an excellent nose for bargains, wastes nothing, and finds adventure in going out of her way to save. Her conservative spending refrains sunk in early: “Do we really need this, or do you already have something exactly like it?” “We can buy that at another store next week for half the price.”
My parents were relatively private about the big family finances — how much my father earned, how much we paid on our mortgage, how much high school tuition cost, after our generous scholarships had come through — and they encouraged us never to inquire about the precise sums that people outside the family paid (or were paid) because they believed it was a violation of privacy (and in many cases, they weren’t wrong!). Because discussing hard numbers was taboo, my parents’ lessons about money had to be implicit; their lessons were incredibly valuable (find ways to cultivate a sense of adventure and triumph in living frugally, so that you aren’t tempted by lifestyle inflation when times are good; carefully evaluate “small pleasures” spending, determine whether it’s really worth it, and usually elect to save up for a future pleasure, instead). I rely on these strategies every day.
I would, however, do something slightly differently from my parents. My mother used to take me and my brothers along with her for errand runs and grocery store trips. I would do the same (if ever I have children), but I would take it a step further and show my kids the receipt (and how much we saved with membership points, etc). If I’m ever in a position to praise my future kid for winning a scholarship, I plan to take one more step than my parents did with eighth-grade me: I will tell my kid how much her scholarship is worth, to cultivate a sense of concrete, financial pride in the amount she’s “knocked off” her own tuition.
I’m always interested in the lessons the other parents teach their children, and how kids find ways to further develop or adjust those lessons while passing them on to the next generation. That’s why I asked TFD-ers to write in with their own insights! Here are a collection of responses:
1. “That one is pretty easy — not buying a home. My parents bought their first home when they were 23-year-olds, I think. I’m 27, and I’m renting an apartment in the city. I have no plans of moving into a house anytime soon. I don’t have the financial resources at my disposal, but it’s also something that just doesn’t fit in with my lifestyle. I work long weeks and am constantly running around doing stuff. The idea of taking care of a house, tending to a yard, shoveling snow, keeping up with maintenance work, etc., is mind-boggling. It provides me with so much relief to know that I don’t have those responsibilities, and I can’t imagine that changing anytime soon.” –Leah
2. “I’m going to be much smarter with money and plan for retirement earlier on. My parents made some really big financial mistakes; my father had a bit of a gambling addiction that cost our family a lot of money. My parents didn’t work as a team, so it’s important to me that my partner and I are very open about money and communicate often about our goals, strategies, and milestones. Unfortunately, my parents won’t have the ability to retire anytime soon (they’re already 62), and I don’t want that kind of situation for myself. I want to push myself hard, work, and save as much as I can so I’m in a better position than they are when I’m older.” — Emily
3. “My parents have always been very, very generous with money. My dad is a retired Air Force member (22 years of service), but he continued doing other work until the age of 58. My mother went to nursing school (with the assistance of student loans) and still works as a Registered Nurse. Their combined income has steadily risen with their experience and promotions, but they often had financial issues. Instead of adding their extra income to their 401k, other savings accounts, or investing, they used the money to help raise my cousins, contribute to another family member’s down payment on a home or car, et cetera. Although I admire their generosity — and it can be twisted into a positive attribute — I have learned, from their lack of savings, that putting yourself first financially is very important when it comes to planning for retirement. Not to say that I think I shouldn’t be generous, if and when I am able, but I must prioritize the futures of myself and my family (especially if the other people asking for my money are not appreciative of the sacrifices being made on their behalf). My parents will retire comfortably, but not as comfortably as they should be able to, given how hard they’ve worked. Even if it was unintentional, my parents taught me to be selfish when it comes to money.” — Hailey
5. “My parents were really smart with their money to begin with, and they taught us the importance of money management. However, in my own family life, I plan to reduce “lifestyle” costs as much as possible, everywhere I can. In my opinion, there’s no need for all the domestic bells and whistles that society tries to cram down our throats by telling us that material possessions will make us feel more fulfilled: I’m talking about the house with a white picket fence, two car garage, backyard pool…that kind of “suburban glamor” mentality. F**k that! I don’t think those values and possessions (which my parents aspired to, saved for, and attained) are realistic for my generation. I have to do things differently than my parents, because of huge amounts of student load debt (and the reduced earning power that comes with it). My main goal is to pay those loan demons off as fast as I can, so I can make good on the bet I made against myself by investing in a great college education…and eventually earn more money.” — Will
6. “Actually, I’m mostly inspired by the way my parents managed money: they taught me to spend less than I earn, to always save a little for investments in a house or a car someday, not to be stingy when it comes to health and security, and to enjoy nice experiences (but be realistic and don’t spend excessively if you can’t afford it). What I do differently from my parents, in terms of managing my finances, is mainly based on technology. I remember seeing my father doing his “accounting” every Sunday (on the phone and in a notebook), and it was very important not to bother him while he was doing it. Now, I just check my bank account from the bank app on my cell phone and I immediately know if I’m OK or not for the rest of the month. Moreover, the bank automatically classifies my spendings by category, so I know at a glance which items I should be spending less on.” — Delphine
7. “My parents are both self-employed. Even though I am super proud of both the businesses they’ve built and the careers they’ve made for themselves, I sometimes think that I would never want to follow the same career path. Although they both make pretty good money, I see the financial stress that being a small business-owner puts on them, and I wonder if all their sweat, blood, and tears are worth the salaries they make. (My parents also had to spend big chunks of their income on company expenses that kept the businesses running.) Because they don’t have the employer-sponsored benefits that corporate workers enjoy, that means that my parents have always paid top-dollar for insurance and health expenses. For these reasons, my parents didn’t really start saving for retirement until very recently. Their entrepreneurial spirit is admirable, and I’d love to do something similar, but (having seen what goes on behind-the-scenes) I often feel like a more traditional career path (in which I work for someone else, not myself) will offer more financial advantages for my future. That being said, I really admire the way they’ve managed their money throughout their careers. If I decide to do something similar, I’ll have an excellent example to follow.” — Mary
8. “I would save for the future. My parents lived in the moment, and they managed their finances moment-to-moment, too. When I was growing up, they always found a way to provide me and my siblings the things that we needed (clothes, food, school supplies, etc). My mother was stay-at-home mom, so we were living off my dad’s income alone; it left us with very little to stow away for the future. As it is now, my mom has very little, if anything, left for retirement. It’s is going to be a big problem in my parents’ (not-so-distant) future.” — Andrew
9. “My parents made me have a job (during the school year and during the summer) since I was old enough to have a paper route. Their requirement definitely taught me to save a lot of money (and ˜know the value of a dollar˜ bust my butt for a dollar), but it also meant that, from middle school onwards, I couldn’t do anything besides work and school. When I raise my own kids, I definitely want them to have jobs and save as much money as possible — I was able to save almost $30,000 by the time I went to college, and it all went towards my degree — but I want to encourage my future kids to strike a work-life balance that allows them to enjoy life a little bit more.” — Julia
10. “My mother was a shopaholic, and she refused to admit it. She was obsessed with brand names, labels — she always had to be on-trend and have the new this or that. Pretty much every shopping trip with my mother began with ‘Oh, I just need to get one thing’ and ended up with four figures on the credit card that we needed to hide from my dad. To this day — even though she nearly lost us the family house, and my dad threatened to leave if she didn’t see a therapist — she won’t admit she has a problem. She simply says she ‘loves shopping’ and doesn’t see it as the addiction that it is. When I’m a mother, I will always know the difference between occasional indulgences and compulsive splurging; I will be super careful to stay on the right side of ‘shopping for necessity’ vs ‘shopping to fill a void.’ At this point in my life, I avoid shopping at all costs, and I never buy anything unless it’s on sale.” — Cady
11. “I didn’t have an allowance growing up, and I think that set me back in terms of being able to manage my own finances. When I have children, I’m going to give them an allowance. Each week, when I give them their $5, we’re going to sit down and discuss how to save 50% of their allowance for future purchases. I’ll brainstorm with them about how to find other paying jobs (paper routes, etc.) to grow their ‘income,’ and I’ll reward them for using the strategies I teach them with ‘bonuses.'” — Sylvia
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