What Did Your Parents Teach You About Money?

I guess for me, it wasn’t really my parents that taught me about money…at least not that I can remember. I know that growing up and being in the Boy Scouts that I earned a merit badge in Finance. Had to create like a 3 month budget plan, and learn about debit vs. atm vs. credit cards and such. I’ve also been pretty good with money and mathematics always (I was a mathlete in 7th grade).

However, I was always the kinda person who was good at saving and spending big. After my first year in university, I’d saved up like 1300 and I spent 900 of it on 2 weeks in Europe. I never really became interested in truly saving, having a retirement account, investing and such, until I started making real money about 3 years ago. Since then, it’s all self taught.

Disclosure: 25y Male

My parents have taught me a lot about not wasting money, spending money, and being wise about purchases. Not so much about investing and making money though.

In my family it was never polite to talk about money, and specifics such as the amount of my parents’ salaries were absolute secrets. However, they taught me both habits of frugality and ALSO that when a truly worthwhile experience came up that money should NOT be the issue. In other words, be frugal enough in daily life that you don’t need to take money into consideration when making career or other big decisions– because you should be “above” such lowly concerns!

In terms of specifics, my brother and I were given weekly allowances that were small but increased with age, and the allowance was entered into a book of graph paper; whenever we wanted to buy something, my parents would buy it but we would then deduct it from our allowance book. I remember so clearly saving up for My Little Ponies and Breyer horses! I also saw my mother’s insistence on paying off each credit card every single month; we went out to dinner once a week as a special treat, working up from Wendy’s to, eventually, Bill Knapps; and when it came to deciding on where I’d go for university, my father bargained with the colleges for my financial aid (e.g. telling one that the scholarship given by another was larger); told me how much they were giving me in scholarships, and what portion of it I’d need to take out myself in loans (I graduated with $16,000 in debt– my parents still paid most, and I’m still unclear how much it was); and yet then told me that because they thought I’d get a better experience at the more expensive school, that it’d be worth it to them to send me there. Those were my primary financial lessons from my parents!

I’ve just realised that the question was “Did your parents prepare you well for financial independence?”

In which case, I’m not at all sure. I mean, I’m 30, I’ve paid my own way since I left university at 22 (and I survived perfectly well there on my state student loan which I could pay back cash whenever I like, but the interest rate is still less than what I earn on the cash in savings). And yet, my Dad still insists on checking about every month that “you’re OK for money aren’t you?” Does that make me financially independent or not?

These are such interesting stories! I’m grateful for this blog, and for the many active commenters!

My answer to the question: Absolutely NO, my parents did not prepare me for financial independence. I had to learn on my own about savings, retirement planning, investments, compound interest; and it was an expensive education. I also had to learn on my own to talk openly about money, and to actively work to reduce some of its hidden emotional power.

My parents raised 3 kids on my dad’s small professor salary; and we had all we needed, but not all that we wanted. I learned a lot about what I DON’T want to do as my own child (now 9) grows up.

I had no clue whatsoever about the family finances. If I wanted something, my parents typically made me feel ashamed for wanting it. They would say something like “Why would you want that? Do you really think other kids will like you better if you have that?” when they would have done much better to just explain their budget limitations. They would tell me that I was no good at saving, that I was “going to nickel and dime myself to death” spending moeny on useless items. I got the feeling that I didn’t deserve anything good, and that even if I got it, I wouldn’t be able to hold on to it. MY LESSON: Be truthful about money. Be encouraging. Don’t label someone – focus on a specific behavior in a specific situation, rather than categorizing.

They were both hoarders. Mom was the coupon and rebate queen, and she would buy – literally – 10 boxes of the same kind of cereal if she had a good coupon, even if we could only ever eat 2 of them (because of the 50 other boxes of cereal she’d already bought). MY LESSON: It’s not a bargain if you’re not going to use it.

In early elementary school, I remember getting an allowance of 10 cents (!) and having to give 2 pennies to church on Sunday. Even in the 70′s 8 cents didn’t buy anything. MY LESSON: For an allowance to be a useful learning tool, it has to be big enough that the kid can buy stuff with it.

When my mother went back to work when I was in high school, and there was more disposable income, she liked to buy nice dresses and shoes for me to wear to church. I liked that a lot, but I hated the way she would tell everyone, loudly, that she spoiled me. I paid my way through 2 graduate degrees. My mother sent me $50-100 a month for incidentals. It was very kind of her, truly, but again I hated the way she brag about it. When I was home visiting, she would tell her friends, her pastor, the grocery store clerk, everybody, that she and my father were “spoiling” their daughter and “putting me through law school.” MY LESSON: If you give a gift, just give it. Don’t force people to pay you back with coerced gratitude, or embarrass them with public teasing.

Wow! I do not even relate to others. My beginning years were very, very comfortable, my father provided the best. We had a maid, my mother had mother’s little helpers and partied dailey along with the other neighborhood wives. This was in the early 60′s. I had the best – then da! da! Da! mom stepped out and a big nasty DIVORCE occurred ( I was nine) and poverty. My mom got the big house and 90.00 a month for 3 kids. Anyway, dad held up his end of the bargin. He has good fiscally, alas mom went down the tubes with her drunk, mean husband who had no fiscal responsibility! work when one must but save??huh?? so anyway, I learned from my father. One time I asked for help, and he said No. I made it , have done well, Now later in life my father & I are close, I save and budget. Dad is a blessing, my mom lost her center.

My parents were excellent role models and teachers about handling money well. Neither had a whole lot of money growing up (and both had big families), but we were very financially comfortable during my childhood.

Dad put $1000 in an investment for each of us when we were born (mine was in Fidelity Magellan back during its heyday). We helped buy our own (very used) cars as teenagers (they paid half and we paid half that we saved from after-school jobs), and Mom and Dad made us pay $50/month toward car insurance. I found out later that they were putting that money into our investments for us, but it was a great start for us on paying for things regularly and knowing the true cost of things. (We bought our own gas for the cars, and when we eventually got cell phones, we had to pay Mom and Dad for those, too, about $20/month.)

Dad also started a Roth IRA for me when I got my first job at 15. We bought stocks together when I was a teenager – $25 worth of various organizations. I got to choose the stocks (I picked Wendys, Aflac, and Emerson Electric) and then he’d show me the statements whenever they came and explain what they meant. I also can’t count the number of times that he showed me compound interest charts – showing me that if I invested x amount starting at age 20, I’d have this much more than if I started at age 25, or 30, or 35… I grew up very much aware of the advantages of compound interest over time and didn’t realize that other people’s parents weren’t also pounding this into their heads.

Mom and Dad didn’t really share their daily money decisions with us, but we were definitely aware that they were money-conscious. We had an older house that wasn’t wired for cable, for example, and no matter how cool it would have been to have cable, they told us how much it would cost (both in up front wiring costs and in monthly charges) and that it wasn’t worth the money. We also knew that it was okay to spend $20 on a pair of jeans but $100 was out of the question. We may not have been involved in the specific decisions, and I never knew how much they made while I was growing up, but I definitely picked up on their splurge-only-on-things-that-really-matter attitudes. These splurges tended to be vacations or trips to see family (which were scattered all over the country) and never really specific things – except maybe for a special birthday present.

When I graduated college (which they paid for, although I had several scholarships along the way), my parents turned control of the stocks, investment fund (which was no longer in Fidelity Magellan but in other mutual funds), and Roth IRA over to me. Now I’m 26 and married, and my husband and I consider ourselves pretty savvy financially. Whenever I have any questions, though, I still call my Dad and ask for his opinion. Maybe it’s still the “Daddy’s girl” in me, but I do feel a bit like he can answer all of my financial questions and is happy to do so. Dad’s also helped me with advice on how to negotiate better pay at work and how to present myself well at interviews/conferences/etc. I just hope that I can start my own kids off on such strong financial footing.

@83: My finances are now much better, but I learned the hard way, by trial and error, accumulating a lot of credit card debt along the way. Basically, I am self taught about money. During my student years I had little money, but resisted careful budgeting, so I was always overdrawn. After I came to the US I started reading books and magazines about money and learned a lot-so for example I have always had retirement accounts, and achieved various goals-buying a car, a house etc. My main problem has been that I did not budget carefully (just approximately) until ~ 6 years ago, and credit card debt. I now know that careful budgeting allows me to achieve my goals in a more organized way. I have a line item budget and enjoy living within it. I also aggressively go after larger salaries, which is also important. Finally, I have paid off all my credit card debt and my only debt is my mortgage. However, if I had been taught better I might have got to this point much earlier. My parents were very careful with money but as a girl I was not only told not to bother with it, but also criticized by my father as “bad with money” -it took me a great many years to put this family story to rest and it affected my confidence really badly-I just gave up trying. In reality, I am quite good with money. I now spend a lot of time thinking about ways to provide my 17 year old niece with the tools/info she needs to manage money in the future-both her parents are completely incompetent in this area.

I got a kck out of the pposter whose mom said “We were poor but you never knew”. In my house growing up – “We were rich, but I never knew”. My parents were really poor when I was little – mom quit work to be a SAHM for 6yrs, sacrifices that they chose. But when she went back to work and they both switched to much more lucrative careers, they still acted as though we were ‘just getting by’ it wasn’t till I started appying for college (and found out I was ineligible for ANY sort of financial aid), that mom and dad had LOTS of money. They taught me that there is no shame to living beneath your means (only buy because you need/actually want something not to impress anyone), that being really poor sucks – so make sure you’re career plan offers a good enough income. Unfortunatly – my Dad is cheap! He always buys the cheapest thing, in an effort to get out from under his – what’s the cheapest option that will do? attitude I overspent when I graduated college and got in a bit of debt. But since I had a great paying career – I was able to dig myself out without too much hassle. My husband and I now live considerably beneath our means. We take cheap vacations like our parents did – camping here we come. Only buy new clothes when the old ones don’t fit or are worn out. Only pay for labor on things that you cannot properly do yourself. But we spend on things that really make us happy, for him – that’s restoring antique cars, for me it’s my arts. And of course – give generously of your time and money to charities you believe in. Literaly, my parents almost make a sport of finding new cool charities to support every year.

I don’t have children yet, but I will most definitely do what my parents did and hopefully improve it.

My parents were AMAZING – transparent, open to answering questions and explaining anything and everything, and constantly admitting their mistakes. Growing up with their open and honest approach taught me that finance can be complicated, interesting, and fun. They taught me that one can never know everything and it’s always important to keep learning which is probably why I’m such a dedicated GRS reader.

All that said, I think the icing on the cake for their approach was teaching me that they were capable of big mistakes and were people too. I was never afraid to talk it through with them when I made mistakes (financial or otherwise) and that is a parent/child relationship piece so many struggle to master.

I’ve never been more proud of them than the day I called home from college and my father joyously declared my family debt free.

My parents kept it simple: Mom handled the money. Dad got cash from her when he needed money to spend (e.g. for gas, food). He would hand her the shop receipt/bill. She would write it down in her little book as an expense and refund him the exact amount, down to the penny. Commercial bills are paid immediately (because a lot of companies offer a 3% discount if paid within 5 days after receipt – see the very small print on the reverse of the invoice).
They never had a credit card and they never ever will. If one doesn’t have the money, they need to save more for having it a little later.
They have debit cards but since they tend to forget the PIN, they hardly use it (debit cards in my country are insured against loss unlike in the US).
They live frugally, use their garden. Back when I was a child, pretty much every food except meat and milk came from the garden. (That’s why bananas are my favourite food – kids want the exotic things.) We kids wore hand me down clothing from neighbours and family. New underwear was typically a Christmas gift.
I had an allowance/current account at the local credit union since age 12 and savings accounts at three local banks from age 1. I learned how to transfer money for bill paying before turning 18 (cheques are not common in my country). School was my job, I was supposed to work hardest in that area and I did. The grandparents paid incentives for good grades. Better grades meant more money, just like in the grown up world.
They did not teach me specifically about investing because they don’t believe in stocks, funds or the like.
They taught me that debt for consumer spending is evil.
On the other hand, they borrowed to buy a house together with the grandparents. In my country, less than 40% of people own a home. They paid it off way ahead of schedule. They repeated that a couple of times more (on average a house was paid off in 5 years) and are now landlords to more than a dozen renters. Since my mother was and is a SAHM the majority of the rental income was kept in her name. In the last years she “earned” more than my Dad working outside the house. That’s a good insurance against divorce, too (41 years of marriage).

Being a good example is the best a parent can do.

I never financed anything at the bank/shop/car dealership besides my home. I bought it at age 29 and my down payment was >20%. My emergency fund is 5 times my monthly net income. My other savings and investments can be liquified within a weeks time and equal my annual net income. I pay the mortgage aggressively: In the last 3.5 years I paid off what the bank expected for 7.5 years.

I do own credit cards but I use them in a different way than the Americans do. I put savings money on it and lend it to the credit card company (ccc), since currently the ccc is paying me 4 times the interest than a savings account would be paying