What Did Your Parents Teach You About Money?
Published on - March 8th, 2010 (Modified on - March 9th, 2010) (by J.D. Roth) February was National Parent Leadership Month, which highlighted the role parents play in shaping the lives of their children. As a sort of tie-in, the most recent poll in the Get Rich Slowly sidebar asked: “Did your parents prepare you well for financial independence?”
Over 1000 GRS readers responded; the results surprised me:
- 17% of you said, “Yes, they did a great job in preparing me.”
- 17% said, “They did well — I learned the basics.”
- 18% said, “It was okay, but they missed some key areas.”
- 48% said, “What preparation for Financial Independence?”
I, too, fall in that last group, but I guess I didn’t expect it to be so large. It’s great that a third of you folks felt well-prepared to tackle your finances, but it’s incredible that half of us feel like we had little or no preparation at all.
What did your parents teach you about money?
I wanted to know a little more detail, so last week I polled my Twitter followers (both at the site’s @grsblog and my personal @jdroth account). I asked: “What did your parents teach you about money? Anything? Did it work?”
A lot of folks responded to say that their parents were poor examples:
- @MoneyMateKate wrote: My parents didn’t teach me — I taught them! I was paying my own dental bills (no insurance) from age 12 onwards with babysitting dollars.
- @RevancheGS wrote: My parents just taught me that you have to work hard to earn money, and how to write checks. I was on my own for the rest of it.
- @liberryteacher wrote: My parents never had any money, and life was hard. So they taught me by example that that was not a good way to live.
- @mike_strock wrote: My parents gave me money whenever I asked. Needless to say, that wasn’t helpful later in life. I’m learning!
- tcita wrote: My parents taught me absolutely nothing: no chores, allowance, budgeting, spending money, savings — nothing. Though I guess that taught me value of work.
- Via Facebook, Tamara wrote: What did I learn about money from my parents? “Don’t do any of things we did.”
But not all parents fail at training their children about money. Plenty of folks picked up good habits (like searching for a high interest savings account) from the Bank of Mom and Dad. Here are some of my favorite anecdotes and tips:
- Pam from The Turtle Path (a running blog) told me: In junior high, my parents gave me $400 at the beginning of the year (instead of a weekly allowance). They told me I could do whatever I wanted with it, but they weren’t giving me any more money the rest of the year, so don’t ask.
- @betsyatoreilly (who is on the PR team for my book!) wrote: My sister and I got $50/month to buy clothes, etc. I had a lockbox for cash and receipts, and a book to enter items. It worked great. I’m a great saver.
- @Elle_CM wrote: My mom (and grandma) emphasized always saving a chunk of any income you receive. We used to make Saturday deposits at the bank.
- Via Facebook, Cynthia wrote: As kids, if we were at the store and saw something we wanted, my dad would say, “Did you bring your money?” I think this is awesome! (And, in fact, I heard my friend Steve ask one of his kids this very thing last night.)
- On a related note, Courtney told me that she and her husband have an interesting approach when their kids beg for things at the store. They simply say, “It’s not in the budget.”
- @mattwakefield wrote: My dad taught me about the stock market by using a 1/100 scale model of the market (MSFT would be $.28 right now). Got hooked early!
- @OregonCPAs_PR wrote: My Dad has always been adamant about avoiding monthly payments. They seem small, but add up quickly.
- @EverydayFinance wrote: My father insisted on no credit-card debt and said, “Everything in moderation.” It worked like a charm.
- @kingkool68 wrote: My parents printed family checks for my allowance. I could write checks to my parents in first grade! They also gave me monthly statements. I love this idea!
- @studentfinances wrote: My parents taught me that hard work is required to be successful. Laziness is not an option. Time will tell if it worked…
That last comment is perceptive: “Time will tell if it worked.” Even if your parents did try to teach you about money, how can they be sure the lessons were right for you, or that they’ll stick?
Training for tomorrow
I’m curious: How did your parents prepare you for financial independence? What specific things did they do that helped you develop money skills you could use as an adult? Do you plan to do these same things with your own children?
And for those of you whose parents didn’t give you enough training: What do you wish they’d done differently? (For my own part, I wish my mother and father had included me in the household finances once I was old enough to understand. I know they struggled to make ends meet, but they never showed me exactly what the challenges were. They never showed me their income compared to their expenses. Also, I wish they’d given me a consistent allowance and required me to budget my fun with that.)
What was your story growing up? How did it affect how you handle money today?
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Like so many others who’ve become problem debtors at some point in their lives, I grew up in a household where money was ridiculously tight and it seemed like every request for money was an unreasonable imposition as my parents struggled to make ends meet.
There were five kids in my family and my parents flitted between low paid semi-professional jobs when we were growing up. This, coupled with the fact that we all had partial (almost full) scholarships to a private secondary school where peers where significantly richer led to myself and other siblings falling into the debt trap when we hit adulthood in an attempt to buy the happiness we felt we were missing.
I’ve only just cleared debts I started accruing when I was 18 or 19 (I’m 27 now) and I feel like my parents taught me nothing about financial freedom.
They never taught me about credit, APRs, budgeting, saving or other rudimentary areas of personal finance because much of this was irrelevant to them as they were perpetually skint.
I’ve come to realise that while it certainly wasn’t their fault that I became a debtor, they most definitely didn’t provide me with the lifeskills to get myself out of debt. That has been a uniquely personal and painful voyage of self discovery
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My parents taught me about a frugal lifestyle. They gave me skills to live like we do today. They really didn’t teach me about money straightforward, but I picked up on their spending habits and I’m glad that I did!
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My parents taught me about a frugal lifestyle as well. While at this point in my life I feel like they went a little too far, it was still a good example to set. They also taught me that savings was good and debt, especially credit card debt, was bad. I didn’t get a credit card until I was 21, specifically because I was taught that I never needed one (they didn’t teach me about establishing credit, and why that was important). There were a lot of other things they didn’t teach me (budgeting, etc) but I picked it up on my own pretty quickly. I think most importantly, they taught me to really appreciate what I already have.
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When I was in first or second grade, my mom had a board game called “Stocks and Bonds” that we played to teach me and my siblings about investing.
Once I owned a few stocks of my own (circa 3rd or 4th grade), I remember her reading the shareholder statements and putting them in language I could understand so that I could vote my shares.
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Only child of blue-collar parents in the 50s and 60s here. Mom was a bookkeeper, dad a carpenter. I got taught basically nothing about money at all. I had a small allowance but that dried up somewhere in my teen years, I don’t remember why or when. However, I never had to hold a job until after I graduated, either. I think my parents’ thinking was that I’d get married and THAT unlucky sod would take care of the finances. I’m lucky I haven’t had a worse time financially – at least I did grow up with an unholy terror of running up a credit card. I’ll be 60 this year and I finally feel like I have my finances under control – though I know nothing about investing (and have no interest in it). I owe no one, and my house will be paid off this December. An okay place to be! :^)
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My mom was always the one who took care of the finances in the family– She taught me everything very well, from how to balance a check book to how to pick mutual funds to invest in. She has never carried any credit card debt in her life (she’s now in her mid 60s), and neither have I. She set an excellent example in frugality when money was tight, but knows how to loosen up a little when money is more abundant. I feel very lucky compared to most of my peers, who mostly seem to be totally clueless. Because of her example and the Dave Ramsey books she gave me when I got married, I am in a much better financial position than I would be otherwise.
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I think your numbers may be skewed somewhat due to the fact that so many of your readers are more financially savvy than the average person. They probably remember more of what their parents did teach them and they implemented it. Also, your readers are obviously a bit more tech savvy and able to find information via the Internet. That accounts for a lot.
Frankly, I think the last number is probably a LOT larger in reality.
I was taught zero, handed a checkbook when I went to college and given a student loan application. Mom and Dad financed most of the first year’s living expenses but come my sophomore year, I was completely on my own … and I screwed it up badly.
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@Ron
I’m not entirely sure that I agree that the relative savviness of GRS readers means that they’re utilising lessons passed on by their parents.
My ‘take’ on things is that a lot of us are savvy because we’ve made mistakes in the past and have learned from them (J.D. was a bit of a debt fiend in the olden days, too!)
Ps. I can relate to your experiences of student finance – it’s so easy to make all the wrong choices when we’re handed the (financial) world on a plate as new students. I for one didn’t think for a moment that I wouldn’t graduate and land straight in an amazing job and untold wealth
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My parents never sat me down to teach me financial skills, but I picked up a few things along the way, and some of those things were contradictory:
- Always pay with cash.
- Always buy the best you can afford
- When applicable, ask for a discount, especially if paying cash
- Live frugally day-to-day in order to be able to purchase big-ticket items
- Waste absolutely nothing
- Cook from home
- Grow your own food
- Give generously. This is where the contradiction comes in. My parents gave generously to their children as well. If we wanted anything – anything at all – they would buy it for us. You’d think that would make us spoiled; in fact, it made me really debate purchases. I saw how hard my dad worked, (so hard his knuckles would bleed), so I had serious internal debates about whether I really wanted something.
- Work hard. I learned a lot from my father (a labourer since the age of six) about working hard. But I’ve also learned that it’s necessary to indulge a little bit once in a while or you won’t gain any satisfaction in life.
- Another contradiction. I know that if I didn’t work hard, or if I got myself in a jam, my parents would bail me out. There were no financial consequences to my decision making because I grew up with their safety net. But to me, their approval meant more; money is money, if I ran out, we could find more, but if I lost their approval….. I wasn’t sure how I could ever get it back.
- Most importantly, they taught me that anything is possible. By combining all of the above daily life habits, they’ve taught me that nothing is beyond reach. If I want something, I have to work hard for it to mentally earn that item, and to physically be able to afford it.
Anyone else experience this? I grew up in an immigrant family, and while not looking to stereotype, I wonder if there’s some consistencies with other families.
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My parents were good role models in living within a budget, saving for things or events that were important, avoiding debt, etc. But they never really gave me concrete lessons, my Mom tried to talk to me about budgeting right before I left for college which, I think, was too late.
I like the piggy banks that are divided into saving, spending, charity, etc. that are available for parents to use to help their kids understand the various roles and reasons for money.
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My parents did a good job. They were very cautious about spending money on frivolous items (my father used to negotiate the price we would pay for a week at the beach until he got it down to $100!). But they were super-generous in spending for things (like education) that were likely to provide a long-term payoff.
Their lessons didn’t take with me. I wasted lots of money until I lost a job at age 35 and learned the hard way. But once the general idea started to click me, I realized that my parents had been doing it right all along.
Rob
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My parents taught me basic rules which I try and pass along whenever I can. Living by these rules has allowed me to feel safe and secure about my finances while still having fun:
1. If you cannot buy it in cash (with the exception of a home), you cannot afford it
2. If you cannot put atleast 20% down payment on a house, you cannot afford it
3. Only buy used cars
4. Put away money each week so you can take vacations and see the world
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I don’t remember how my parents did it, but it worked, I was always very responsible and started at 12 babysitting and really making a lot of money and paying for my clothes, etc. I play quality financial consumer podcasts now when my sons are around and I know they are picking up information. I heard from an adult friend who has a lot of issues with money that her Mom told her growing up to throw your bills in the air and whichever you catch is what you pay! Wow, sure made me appreciate the parents I have! My inlaws hoarded money and now as one lies dying, the other still does not want to spend anything. I wonder what people are “saving” for at this point. Think you still get lessons even as an adult from parents.
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I don’t remember any specific lessons from my parents, but we did have savings accounts that we kept track of ourselves.
I was in college before they felt comfortable talking about their income with me (and even then, I had to guess). They didn’t want my sister and I to think that they were made of money… as we had nothing to compare their income too.
We’ve been attempting to teach some financial responsibility to our 5-year old. She has a magnetic responsibility chart, she gets 5 cents for each magnet she gets – up to 7 a day. If she gets all 7 magnets (they’re for things like clearing the table and picking up toys – to be being respectful), then she doubles her money for the day. But the catch is, we don’t remind her to check in with us to receive her magnets at the end of the each day. It’s got to be her idea. She’s reminded on occasion when we’re at a store and she wants something – but doesn’t have the money for it – then she asks us if she can start her magnets again.
In fact, she just asked us this morning… she must have a goal in mind.
Here’s hoping it works – we haven’t been the best financial role models yet, but we’re working on it.
Thanks for the great content!
Meredith @ Building Character
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I think it’s not all what our parents taught us. Plenty of parents teach their children to do what’s right, and plenty of children still get in trouble anyway.
My parents taught me to avoid debt (other than house, and maybe car–but buy used!), save money, and do it yourself if you can. What they didn’t teach us was budgeting money. We were taught to save, but we weren’t taught how to spend. While this caused my older brother–as far as I can tell–to live a frugal life and save, my younger brother–as far as I can tell–would rather spend the money now that no one is watching over him. I fall somewhere between (I spend more than I should, but I also save some).
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Several good lessons:
1. Didn’t get an allowance just cause, only if we did chores. Different chores earned different amounts. You never get something for free.
2. Opened a savings passbook account very early on and all gifts and allowance, later babysitting money and part time job earnings went into this account. Seeing the deposits and debits in the book helped me understand the basics of account balancing.
3. Saw my parents take on 2nd jobs when trying to save for extras like family vacations or Christmas gifts. The value of hard work and dedication in action.
4. Never pay for somebody to do something for you that you can do for yourself if you just put in a little effort. My father cringed at the idea of hiring people to help with house or landscaping projects unless it was really something that he couldn’t do on his own. This meant that I became very comfortable with tools at a pretty early age.
Things I wish they’d done:
1. I heard them fight about money a lot, but they never included us in the conversation to explain what the problems were. I grew up thinking that talking about money difficulties was something to be ashamed of and ignored a lot of my own problems longer than I should have.
2. I wish they’d explained the idea of compound interest so that I could understand accruing debt versus investing. And the long term implications of both.
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The Good, the Bad, and the Ugly:
The Good- My parents were always very open about talking about money, so it was never a big mystery to me. Although they were reasonably well-off (and my uncle very much so), both brother and sister worked really hard to instill in their kids a sense of working HARD for it. They also took me and my sister down to the bank to start our Junior Savers accounts when we were in Grade 2 (so age 7). They would also never countenance the idea of “Buy Now Pay Later”.
The Bad- Despite this, there was never any actual money to work with. My mum set up an extremely strict “allowance” program with an “allowance chart” where each infraction costs you 25 cents. It wasn’t terribly well tied to our ages, so by the end of the week, most of the time we only got a quarter or sometimes owed her money! [which we could never pay off] This might have worked had there been opportunities built in to earn extra money, but instead us kids just checked out of the process, and wound up asking my mum for money anyways.
The Ugly- My parents had an incredibly nasty divorce when I was still in elementary school, and entered into a long, drawn-out custody and child-support battle that still continues 20 years later. This frequently played out at home in a cobattle for money. If we needed money for a band trip, for example, we’d ask Mum, who would say “Ask your dad, he should pay for SOMETHING!” and if we asked Dad, he’d get mad and go on about how she should be paying more since we lived with her. It was always a mess.
Interestingly, my sister and I each took very different lessons out of the Ugly. In my case, it pushed me to be fiercely financially independent, because I NEVER wanted to have to ask ANYBODY for money ever again. In my sister’s case, it made her… shall we say a tad manipulative? SHe’s taken on the attitude of “Why should I pay for anything if I can get someone else to buy it for me?”
So I would say that financial education in our house was a completely mixed bag.
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My parents tried to teach me good money habits by having me write my allowance deposits and debits in a checkbook. But I resisted – I wanted the cash now! To this day I don’t use a checkbook (but I check my online banking almost daily). Overall, they taught me to be responsible and honest, and I have applied those principles to my finances.
I did try to learn from their mistakes. They were (and still are) high earners who spent a lot and had credit card debt. Growing up I realized that I’d rather be frugal than be tied to a stressful job that pays for expensive things. Because of this I have no debt and save for future purchases and retirement.
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One item I would like to say in defense of the parents who didn’t prepare us:
There was little that parents could do to prepare their kids for the predatory credit card free-for-all that many of us experienced in college, because that was a completely new gimmick. In our parents time, even up through the 80s, it was hard to get a credit card, you had to have a good job and a bank account and be established, basically you had to earn the credit. There was no predatory credit card lending before the 1990s, so how could they have prepared us for it?
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Hi JD, my story is similar to yours. When I was a kid the topic of money was pretty much verboten so I never asked my parents about money. I didn’t receive an allowance but always had everything I needed so it just didn’t seem important enough to talk about at the time.
They did teach me the value of hard work and even at a young age I always had ways to make money for the little extra things I wanted. I’d shovel snow, mow lawns, detail car, put up hay, etc. This is something I DON’T see kids doing today, at least not in the areas where I’ve lived.
I went to college to study math and science and always thought business and finance classes were a waste of time for “serious” students. It wasn’t until I was in my late 20′s that I realized there was a huge gap in my education and went back to school part-time to study business.
I’m doing things differently with my kids. My son’s a freshman in college taking engineering classes but he knows way more about money than I did at his age. My younger kids still don’t get an allowance but we work things out on the barter system – if they want “X” they’re expected to do “Y”. So far this seems to be working, and eventually I’ll give my oldest daughter who is 11 a cash allowance and a ledger for tracking expenses.
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My sister and I got the same financial advice/models etc and we are in vastly different financial circumstances. So I think our temperments had more to do with our current situations than what our parents taught us. A lot of it is internal vs external locus of control.
Based on what I see so far, I anticipate the same thing with my own kids. I’ll give them the financial tools they need to succeed, but it’s up to them to use them.
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My parents , I’ve learned as an adult, are fantastic with their finances, living incredibly frugal lives for most of my life to send myself and my sibling to college. Unfortunately they never care(d) to share much of this wisdom with me, other than to make sure I didn’t get a job until I graduated high school – telling me that my job was to study and get good grades, they would give me the money I needed. I thus got to college without a good sense of what things cost, and hated how others had to point out how sheltered my upbringing was. So far the internet is making up for what my parents haven’t shared with me, and luckily I haven’t make too many expensive mistakes yet.
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My parents taught me very well…it just didn’t always sink in!
I think part of it was my personality (tended toward instant gratification, I suppose, since I was a child). I remember my parents telling me repeatedly to never have a car payment, for example, but I just dismissed the idea, because it seemed impossible to ever save up enough money to buy a car outright when I was earning minimum wage at my after-school job.
My mom also tried to teach me to budget, and to pay off credit cards in full each month. I’m not sure why those lessons didn’t all get through to me at the time. Fortunately, I’ve finally come around to their wisdom!
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I don’t recall my parents ever sitting me down and teaching me how to become financially independent. In fact, I can honestly say that my dad was a terrible role model in terms of his actions with and attitude towards money.
I’m lucky in that I was born frugal — I’ve always been a saver, I’ve tried to live as cheaply as I can and take care of my possessions, etc. I’m also lucky in that I’ve married a man who has spent years educating himself about money — although I’ve haven’t ever really been able to invest, he has gone to a lot of trouble to build up a great stock portfolio, retirement account, etc.
My husband and I will be having our first child in May. We’ve already been discussing how we want to teach her about money and living frugally. Here are some of our ideas:
1.) We’ll be giving Alex stock as a birthday present. As she gets older, we’re going to teach her how to research companies so she can select the stock she wants for her birthday.
2.) We’ll be putting a limit on the number of Christmas gifts she receives — my nephew got (I’m not making this up) around 100 presents this past Christmas. No kid needs that much stuff.
3.) We’ve already started a college savings account for our daughter, which we’ll probably move over to a 529 once she gets here.
4.) We’re getting rid of cable — it’s a waste of time.
I don’t really wish my parents had done anything differently as far as my financial education goes — seeing (and sometimes experiencing) the consequences of their bad financial decisions actually probably helped me more than it hurt.
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I don’t think my parents ever explicitly “taught” me about day to day money management. They did once give me a somewhat abortive lecture on investing and the benefits of index funds when I turned 18 and was entitled to a small amount of money from a grandparent.
However, in thinking about it, the way my parents lived has had a pretty deep impression on me. My parents were always close-mouthed about their income, I know it had to have been upper middle class level, but still don’t know what it was. However, they way they lived was that the only acceptable debt was a mortgage. They used credit cards, but they were to be paid off every month. Every car we owned was (1) used, (2) paid in full on purchase and (3) used until it became uneconomic to keep running. (One such car was a volvo purchased when my mother was pregnant with me, which they let me use starting with my 16th birthday, and I drove until my Senior Year of College)
I’ve never thought much about their influence, but it’s pretty obvious in retrospect. I’m still young, in my late 20′s, I don’t have an enormous amount of savings just yet, but I own my older (used) truck outright, and my only debt is student loan debt from law school and a mortgage.
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My parents didn’t teach me anything about financial responsibility. They never talked once about money to me, nor gave me money for allowance or anything. I did intensive work around the house throughout all my life (cutting the grass at 5, re-shingling the shed roof at 10, laying a brick foundation for the house addition at 12, etc.) I was told that my work earned my shelter, food, and clothes.
I never asked for money and was rarely allowed out to movies or stores, so I guess if there is anything my parents did teach me, it was how not to spend money. They are really bad with money, and once becoming an adult, I saw myself following the same path. I decided that an aggressive action was necessary and I would do whatever it takes to make sure my future children have a better life than I did.
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My father once told me that true success is measured when you make more each year in investments than you do in salary. He has not read YMOYL, but he basically imparted the cornerstone of financial independence with that. Reading The Millionaire Next Door I was instantly reminded of my father– an immigrant with a business who is generous but very frugal (whose children were encouraged to get high earning professional degrees).
He started me tracking Exxon stock weekly at age 9, and I learned about stock splits etc. Because he was depression baby, we grew up never ever wasting food (things that rarely went bad were composted) and I know a ton of cheap recipes (and understand the mark-up on sodas at restaurants) and how to cook. He taught to look at the price per unit at the grocery store, and to buy quality where it matters. I also had an allowance– I mostly spent it on candy, but sometimes saved up for larger purchases like a sticker set.
We never had the newest stuff because our college accounts were fully funded (my American mom’s concession to ultra-frugality). Being able to go to any college I wanted without debt when so many of my friends didn’t get to go to their dream school even when they got in, really did make it seem all worthwhile. Especially since so many of my friends had been denied nothing growing up and were completely shocked that they’d have to go to whatever state school had offered them the most money. I had four wonderful years at the happiest college on earth and total freedom to do what I wanted on graduation, even if I didn’t have a shiny new SUV and hadn’t had a ton of Disney World vacations growing up.
My sister is also doing great– 4 years for an engineering degree at a top private school, no debt, high paying job that she loves. She’s living an amazing life but also has fully funded retirement accounts and then some, and just bought a house (20% down, home buyers credit, reasonable price, amazing interest rate, exactly the neighborhood she wants to live in, she’s keeping her housemate and renting the other room to visiting nurses). She’s frugal but she travels and goes out and enjoys experiences. She can do what she wants because our parents made good choices and she continues to make good choices.
In contrast, my husband says he only learned not to spend more than you have, which is a good lesson a lot of people didn’t get, but he didn’t know about saving or comparison shopping. He’d spend all his money– if he had anything leftover before his next paycheck he’d buy random junk. His parents also made him work a minimum wage fast food job in high school so that he would be sure to go to college and take it seriously. I suspect he would have done so anyway.
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I wonder how these numbers compare with a similarly sensitive area of life for which parents should prepare their children: sex. It is kind of curious that sex and money are two topics that we treat with such caution when both are a very important and integral part of life in our society.
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I wish my parents had been more open about how they spent money. As a teenager my parents would hand my sister and I their credit card to fill the car up with gas. I had a job in high school. I don’t remember what I spent that money on but I know it wasn’t on gas for the car. I remember my parents complaining that we drove too much and gas costs money and blah, blah, blah… When I went off to college they gave me a credit card to spend ONLY on school supplies. I also had a cash allowance for groceries and when I ran out of money I was out until the end of the month. Because I had no sense of how to grocery shop sensibly I would go through my allowance living large the first 3 weeks of the month and live on ramen noodles for the last week. (I still can’t eat another bowl of ramen to this day.) When I felt starved for food I would go to the art supply store and buy art supplies. This somehow fed my hunger. Now I realize I was acting out because I felt deprived. It’s embarrassing to admit. I knew at the time I was lucky to have the opportunities I had but I still couldn’t help but feel like something was missing so I bought stuff and my parents footed the bill. I finally got it when my Mom sat me down and explained how my over spending on this credit card was becoming a hardship for them. We both learned a lesson from this. My parents learned to not give me a credit card that they were paying for and I learned to stay away from credit cards.
Ironically, my parents have been following me on this new path of how I am spending money. I’m learning in the past I was not open with them how I spend money as an adult. It’s bringing more depth into my relationship with them.
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I wish my parents had made our household financial situation more transparent because they would often claim, “We can’t afford that.” As a kid, I didn’t understand why that statement seemed so resolute, as if we couldn’t just ‘afford’ it at that time, but we’d NEVER be able to afford it. That attitude imparted a very limited financial view to us kids with the result that all of us have struggled with debt and money mismanagement. We had this “We can’t afford it” mentality ingrained into us and so we squandered our incomes to subconsciously achieve that exact end.
My parents were very poor with zero savings and no emergency fund – they were always scrambling to pay for one emergency (car repairs in particular) or another, or just to pay the bills. Our pantry was often empty towards the end of the week. My paternal grandparents were always bailing my father out with new cars right up until the time I left home and beyond because we would drive ours (which were on their last leg to begin with) into the ground.
When I left home, I was absolutely helpless in all areas of household management. I had no idea how to write a check, how to manage a budget, how to save, how to grocery shop, how to cook, or how to delay gratification until I actually had the cash to pay for something. As a result, I went into heavy debt for years because I just couldn’t equate having money with having security. We all seemed to have so little security as kids and I guess buying ‘stuff’ filled up the void.
I discuss personal finance with my kids daily. This may be overkill but I just don’t want them to leave the house being unable to cook for themselves, or not knowing how to grocery shop or not having at least a working knowledge of the basics in managing their money.
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Honestly, I wasn’t entirely prepared by my parents. The most I recall was learning to roll pennies up for the bank! As for real sit-down learning sessions – not really. Out of college I came armed with the ability to figure out 15% tip for the waiter. Pretty much. Now, its a different story all together though.
~ James
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My parents taught me alot about money, mainly becuase I was willing to absorb whatever they wanted to teach me. My younger sister is a different story.
I have had a bank account since I was a child. Dad taught me about compound interest (both good and bad), debt, saving for a rainy day, and later in my childhood he taught me about the stock market.
My Dad’s main goal was to pay off his house by 50, and he frequently told me how close he was getting in his late 40s. He has since been re-married, and has a homeloan, but that will be gone in a few years. I have learned much more since those days, but I have to thank my Dad for forming the foundation.
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My mom always says, “We were poor but you never knew it!” I think what she meant was that she and my dad sacrificed so that my brother and I could have what we needed/wanted. They gave us allowance for doing chores, but I don’t remember much beyond that. When I got older, I lived beyond my means, but kept my credit card debt around $1,000. Nothing too crazy. I ended up having to teach myself about saving when the bad economy really started affecting my husband and I. I scoured the internet and got us completely out of non-mortgage debt (about $7K) and started a savings account with what I had learned. That’s how I found “Get Rich Slowly!”
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I learned almost nothing about financial independence from my parents.
My parents were very private w/their lives, so much so that it sometimes felt that I was not worthy of the truth. I had no idea what amount of money my parents made and if I asked I was, of course, dismissed immediately. Political parties were taboo as well. It was only when I was much older (think Gore/Bush 2000) that I found out their respective party affiliations (to my dismay, opposite of mine).
They separated when I was about 11 y.o. and lived this way for at least a year before they explained to me that they were having marital problems!
So, my mom was a spender (mainly on herself, fur coats, new clothes, jewelry) and when I was a kid she would always say, “Gee, I really wish I could afford to buy you all of the things you want.” Trouble was that I really didn’t want anything. I just wanted love and attention (which was hard to get from a mother who worked night shifts).
My father was (is) a saver. But when it was time for college, he decided to tell me upon graduation that I had to pay back all of the student loans! Now he has made sure to let sis and me know to not expect an inheritance; he is remarried and travels.
My parents lived their own lives…and I am living mine with plenty of past financial (and other) regrets. It would have been nice to have even just a handful of guidance along the way, but my husband, kids, and I are working toward a close-knit, supportive family bond.
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My parents never had much money but they were very careful about spending. Their honeymoon was their last vacation. They saved everything for my education. If i got “lazy” at paying bills they would bail me out. Because I lived at home until my low thirties, I had a good job and finally, with some money, would be a very extravagant consumer. Running up credit followed by paying it off and then repeat again. All in all I’m still learning the personal finance ropes but I never had a clue about money until my uncle educated me about investing. I spent like crazy over the yeas but thankfully at least I dedicated 20% of my salary to my 401K which built up a nice sum.
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My parents’ idea of teaching me about money was to give me spending money in high school and a credit card when I started college.
I don’t fault them for not caring. They just didn’t know any better.
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The best lesson was a savings intervention. My dad sat me and my brother down (when we were about 16-17) with our latest bank account statements. We both had jobs since we were ~14, and he made us divide the amount in our accounts by 36 (or however many months we should have been saving) to find our monthly saving average. Mine was about $0.05, and my brother’s was -$2.5. Pretty good wake up call, I think!
This was followed by some examples of how much money we would have if we had saved a little each month, which was especially salivating because we both had large purchases in our minds. My dad probably thought this lesson was lost, because we didn’t change immediately. Eventually though, we found the way.
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The lessons I learned from my parents can be summed up with “don’t do that.” For instance, when I went to buy a new car, I asked my mom how much I should put as a down payment. Her answer? “Oh, we used the z-plan as our down payment.” Z-plan is the employee family discount for buying a Ford. They essentially bought it at full price!
Though I will say they instilled in me a good work ethic.
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I pretty much learned almost nothing about finances from my parents. My dad thought it was best to “shield” us from what was going on behind the curtain.
I did learn a little about some frugal choices of living. He almost always tried to fix the cars by himself or with one of my uncles for support. He also was the one who cooked for everyone in the family.
I think if I would of had a little more education in finances from my parents I would be in a lot better position now, but “C’est la vie”.
I AM lucky to find a wife who can show some sense into me about finances (in addition to me reading blogs like this of course) on top of what I learned in the past 20 years so things are much better.
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My parents did not teach us well about money at all. I have no memory of their budget and my father was very secretive about how much he made. We certainly learned the value of working hard though, and did pay for our own car and repairs and clothing from about junior high on.
They told us they’d pay for undergraduate and then if we wanted to go to graduate school we were on our own. But when it was actually time to go to college, only my oldest sister got her 4 years at a private university fully financed.
I was less decisive about my path (though I did well in school), and by the time I was positive about the degree I wanted I had dealt with enough stress around my father paying the bill on time and fighting about courses that I did it myself. He’d also paid up till then by selling company stock and the company stocked crashed, and then he took early retirement. No way was I doing student loans with him.
When my parents divorced they had tons of debt that my mother tried earnestly to pay off with the sale of their house. My father seems to have basically wasted all his retirement money and lives on social security. My mother works hard and is hoping she can still retire soon (she turns 65 this month) but has very little social security because she worked part-time in lower paying jobs to care for her children.
My husband and I have spent the last year trying to make sure we don’t follow the paths of either of our parents. We have a serious payoff plan and I’m confident we’ll succeed.
Our children are just 6 and 4, and they each get allowance. They get 25 cents a week for every year old they are, and my oldest certainly understands how to save. I love this plan, as when we’re shopping I both tell them that things aren’t in the budget (true) and ask if they brought their money. This stops a LOT of arguments and cuts out on unplanned spending.
I can see using the $400/year when they’re older, or giving them a lockbox and $50 a month and a ledger, both of those seem helpful to me. As they grow older I hope we work out more ways to include them in our finances. And I sincerely hope that we can raise them to handle money far better than their parents or grandparents.
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My parents taught me a TON to help me value savings and a frugal lifestyle. They grew up in WWII Germany, so they understood the importance of not being wasteful and getting the most out what you had. My dad taught me all of the key tenets of personal finance – compound interest, true assets (things that gain value), delayed gratification, pay yourself first, etc; I funded my first IRA with money from my first job at 16 and never looked back.
One other key lesson was to buy value – I can still remember shopping for a basketball hoop with my dad; when he realized the fiberglass one, which was almost twice as much as the wooden one, would last much longer, he didn’t hesitate to buy it.
They gave us an allowance and left buying decisions (and their consequences) up to us, which resulted in some valuable lessons. They also gave us access to tons of great books like Millionaire Next Door and my dad’s financial newsletters.
Great lessons, and I’m extremely thankful to them for it. I’m now passing the same values on to my kids.
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Honestly, these numbers don’t surprise me in the least. You have to think about the audience that you’re polling – they’re your readers, which means that they have an interest in personal finance, but it’s also a strong possibility (given the subject matter and nature of your posts) that they are interested in personal finance because they have struggled along the way. People who have struggled are more likely to have gotten incomplete, inaccurate or absolutely no advice from their parents on managing their finances – it’s what may have led to their struggles to begin with.
On the other hand, people who have not struggled with their finances – whether because of their personal nature or because of a good education on personal finance – are less likely to seek out a website that will teach them the basics.
So the numbers reflect your audience only, not the broader community, and therefore don’t surprise me at all.
For what it’s worth (since I rarely come to your website, I read the daily email feeds), my parents taught me the basics of finance, and while I haven’t always been perfect (and still am not), I’ve never had any major problems with debt or saving.
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You can always learn things from your parents. If they are good with their finances, they can prepare you for the future. If they are horrible with their finances, you can learn from them by avoiding their mistakes.
I was lucky in that I had parents that were relatively smart with their finances. I am now in a position to give my parents some financial help myself.
With my help they are now earning more with a cash back rewards card, 2% high yield savings account, using e-file to pay taxes, and using bill pay for paying bills.
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I learned a lot in a variety of ways.
Whenever I went shopping with my mum, she would explain to me how and why she was comparing the unit prices of items, always looking at the “reduced for quick sale” items etc, including what the pros and cons might be (e.g. don’t buy something just because it’s reduced, but do consider changing your meal plan to include a reduced item).
My parents did try to give me a weekly allowance in return for doing work around the house, but as I had nothing to spend it on (living >3miles from the nearest shop of any kind) I had no real incentive. I think I had already become a lifelong saver!
As a teenager, I was given 50GBP a month for clothes. It was made quite clear that this covered all clothes except mandatory school uniform, and that if I ran out of socks and money halfway through the month, tough. I usually managed to save some of that too, and certainly never ran short. What was very instructive was seeing how friends who theoretically were given the same allowance coped. Many of them would blow the whole month’s allowance (or more) on a single item in the first week, and then borrow from their parents against the next month’s. Except that then they would “need” that money, so it would be borrowed from the following month, and so on. I wonder what they would say they “learned” from their parents now?
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It was a mixed bag. Growing up we received our allowance as entries in a checkbook that we had to maintain (though cash from babysitting would stay as cash). When we bought something, my parents would pay for it at the store but before we got to take the item we’d have to deduct the amount from our allowance checkbook.
On the other hand, I took dance lessons for many years and towards the end I heard my parents argue about how to pay for them however they did not ask me directly about it. I decided to take action and quit so they could save money.
Despite the lack of discussion, I just naturally tended to be a saver. When I was young I confused my parents because I would ask to get smaller bills from my babysitting cash so that I could divide it into peanut butter jars. These jars were my funds to save up for different purchases. I now know this is the “envelope system” but it just seemed to make sense at the time.
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My parents really didn’t teach me a lot. And a lot of what I know I learned from not doing what they do (They always bought new cars and I didn’t understand that). But when I got my first part-time job at 16 my Mom told me I should put half of each paycheck in savings. I just went along figuring that was the norm and as a result I good chunk of money saved up when I went to college (also saved a lot by going to a junior college for two years) and I never had to take out any student loans. I found out years later that most of my friends didn’t do a whole lot of saving and had to take on a lot of debt.
I’m not a perfect example of being smart with money but I’d like to think I’m decent and that one tip from my mom helped a ton. It’s not like she even drove home the point – I think she just mentioned it once in conversation and for whatever reason it stuck.
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My family was always just above the poverty line. While I can’t remember a time I didn’t know how to balance a checkbook (my mother has a slight case of numerical dislexia and needed help with the reconciliation), the only other money tips I learned where how to recognize which bills can be paid late and how to borrow money.
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My mother was always very good and responsible with money. The problem was, she never taught me anything about it. Nothing about saving, paying bills, maintaining good credit, etc. I had to learn the hard way as a young adult. I remember asking her one time how much a particular bill was, and the answer was “none of your business”. So that was the very last time I asked her about money.
I never received allowance because she as not “paying me to do what I was supposed to do anyway”. Getting my first job at the age of 14 was the best thing for me at the time, but I never learned to manage my money, even back then.
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I was lucky, I didn’t learn anything about money from my parents, but my grandparents from my mom’s side of the family had a few businesses.
I got to see them working on their taxes and sometimes working on their books for their business.
While I didn’t learn anything about stocks or bonds, it was fascinating watching work on building their business.
So, yeah, I mostly taught myself, but I learned that finance isn’t a dark magic of any sort…
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The biggest message I got from my parents growing up was that “Lifes a bitch and Mr. Murphy is her boyfriend”. My folks didnt tell me much about money other than to work hard and dont spend any that you dont have to. #9 dotty above sounds very familier to my upbringing. I was thankfully instilled with a work ethic at a early age and growing up I didnt want to be some spoiled brat that was given everything by thier parrents. Dad helped me buy my first car and I apreciated it. Parrents divorced in 84 and I saw how it affected them both financaly. Learned most of what I know by observation and listening to the wisdom of elders growing up. Grandparents/Greatest Generation were a HUGE influence on me. My philosophy on money was molded by those that saw the 1920′s to the present day. My money philosophy is basicly this. 1. Work hard 2. Save something every paycheck. Dont care if its .10 cents or ten grand put SOMETHING in savings account every payday. 3. Goes with #2. Have “F#@% YOU!” money put aside for whatever comes along. 4. Take advantage of IRA,401k etc. Compounding of interest and investing for retirement. I probably wont be living on a beach in the Carribian when I retire but I want my bases covered so I dont have to work 50 hrs. a week when Im 70. 5. Have money available so if a good buy comes along you can take advantage of it. This is one that I use a lot. Worked for a man that bought lots of cars,trucks,equipment in the 80′s when the farm crises was at its worst. Bought stuff dirt cheap beacause he was at the right place at the right time with CASH in his pocket. Have done this myself with cars, motorcycles, tools etc. Best thing is that not only have I gotten use out of them, but if i need to be liquid on them I can sell them and get my money or make money on them 6. live frugaly. Dont fall into lifestyle inflation and spending money foolishly. We all know what Im talking about. 7. ENJOY LIFE! Keep yourself healthy and cherrish your family and friends! This is probably the greatest thing I have been taught. Your health and happyness is the most important thing. This is the reason to live frugaly/monitarily smart. If you dont have the ability to enjoy the blessing of life on earth than all the labors we do are in vain.
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