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

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 opened a savings account for me at a very young age. I was given an allowance and saved a portion of it. My mom would take me down to the bank. I would complete the deposit slip, take it to the teller window, and get my deposit receipt. It was also a social event since it was a small town bank and the teller turnover was virtually zero.

When I got old enough to start earning money from cutting lawns, etc., I would ride my bike to the bank and make the deposits. I am 51-years old and had forgotten that until recently. I will have to remember to thank my parents the next time that I see them.

Despite asking on several occasions, my parents refused to talk money with me. They even tried to rush me through the FAFSA process so I wouldn’t see how much money they made. (It was more than enough. But it would have been an excellent occasion for an honest talk about DEBT.)

My parents waffled between being too frugal and being ultra-consumers. They “couldn’t afford” clothes for me, and I shopped at thrift stores for myself, but Dad was always splurging on big ticket items (he still upgrades his Mac and iPhone every year, even though he doesn’t know how to text). In a way, I should be thankful for the lesson in frugality.

As for credit cards, investments, budgeting, and savings, my husband and I learned those the hard way and continue learning (which is why I love your blog, JD!). Dave Ramsey was the first one to make sense of it for me, and that was 4 years ago when we were $20,000 in debt and barely making it through paychecks. Now we’re debt-free and have savings and retirement accounts (at age 30). We are determined to be extremely transparent with our kids (6 & 4) about money, and have already told them all about how much we make, where it goes and how much things cost. The 6-yr old is working odd jobs around the house to save for a crayon maker.

I would love to see more information about how to teach children more about financial responsibility, from preschool on up. Thanks!

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.

We didn’t grow up in the US so we didn’t have any exposure to IRAs and 401k plans. The only stock my dad owned was his own company’s. My parents were incredibly frugal and we were by no means spoiled. It did at first lead to some crazy spending when we did start to earn our own money but that phase passed without too much debt, at least in my case.

I learned it’s okay to help people avoid the consequences of their behavior by rescuing them over and over again. My dad, who made a good salary working for an international company, has been supporting his siblings for the last 40 years. His siblings see my mom and his kids as inconveniences to their access to his money.

The boundary issues with money extend to the kids too. Our parents paid for our college tuitions and now they are struggling (having been led by God to give most of their savings away), it’s hard to define what our responsibility to them is.

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.

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?

I later started investing the spare money to increase the return, but without those two rules I wouldn’t have made it.

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!

My mom, on the other hand, comes from an extremely wealthy family, knows nothing about investing, and is horrible with money management. But she’s really frugal, to the point of being cheap. She’ll negotiate with sellers, use coupons, etc. Yet she’ll easily blow hundreds in a month on nonessential items.

So here are some takeaway lessons I’ve learned from each parent.
Dad:
-the stock market is always the best investment when you’re young
-stop wanting so much stuff
-but if you’re going to buy something nice, make sure it’s NICE and will hold its value
-YOU have to take control of your money. don’t trust anyone else!
-never go into debt. never ever ever. pay in cash for everything, including your car
-unless you’re buying a house. a mortgage is okay.
-if life throws you lemons, turn them into watermelons. be resourceful (my dad lost his contract engineering job during the dot com bust, and spent the next year thoroughly enjoying going back to school to get certified to teach math and science to K-12 grades. Even now, he prefers to spend his days substitute teaching and then playing tennis or fishing with his buddies. He only looks for a contract engineering job when he wants to buy stuff.)

Mom:
-generic is as good as brand name
-negotiate! almost nothing is set in stone
-the only thing you should NOT compromise on is health insurance. Always choose PPO, not HMO.
-coupons are your friend

And they did a really bad job of backing that advice up with actions. They spoiled me as a kid and bought me pretty much everything I ever wanted. They could afford it, and I was an only child, so I guess they figured they wanted me to be happy.

So I entered my adult years with a serious instant gratification problem that I quickly started feeding with credit cards and other high-interest debt. And a nice little inferiority complex about it because in my head I “knew” I shouldn’t be doing what I was doing.

I’m doing my best to show my kids how to handle their money through my actions, not just by paying lip-service to good advice.

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

Careful there.. you’re getting awfully close to Four Yorkshiremen territory: “You were lucky. We lived for three months in a paper bag in a septic tank. We used to have to get up at six in the morning, clean the paper bag, eat a crust of stale bread, go to work down t’ mill, fourteen hours a day, week-in week-out, for sixpence a week, and when we got home our Dad would thrash us to sleep wi’ his belt.”

I am the oldest child and I certainly had more financial training than my 2 younger sisters who, in their 40′s, are still partially supported by my parents. My father is incredibly generous with his (admittedly high) income. Along with being financially responsible, he taught me to be generous. He once pointed out to me, as we passed our local United Way donation thermometer, that he had personally contributed 1% of the total.

Interesting thing is that my sister is a lot like my mother but we grew up pretty much the same way, which is why I think my spending and saving habits are not as much the result of lessons from our parents as it is the result of my personality. And to be honest, I think I needed to feel the pain of debt to being able to enjoy the pleasure of being debt-free.

After all I’m happy to have learned the lesson while studying. Though it feels like a large sum compared to my present income it is not that bad compared to the starting wages after graduation. Being in debt probably were a more valuable lesson than anything I learned during 5 years at the university.

I never thought our childhood was that restrictive. The stuff we couldn’t afford was simply not that important to me. The brother immediately after me, on the other hand, seems to feel like we had a horribly deprived childhood. I am not sure why. Same parents, same childhood rules and whatnot. Two totally different personalities. I went the “save every penny you can because tomorrow may bring something unexpected” route and he went the “*my* children will not have to suffer the same lack of material goods that I did” route.

What could my parents have done a better job of teaching us? How to deal with money when you actually have some. Investing for retirement or long term goals. Stuff like that I have had to teach myself. (No problem, they also gave me a love of reading and good math skills.) But if they did anything less than optimal, it was spending money almost as soon as it was earned (but not *before* it was earned). Probably because they always had a list of stuff that was being put off until they had the money. Car repairs, house repairs, stuff like that. Nothing frivolous. But it gave me the desire to always, always have a hefty emergency fund. (2 years living expenses isn’t excessive, is it?)

1. Money is the root of all evil.

2. It’s pious to be poor.

3. Rich people don’t go to heaven.

4. Money doesn’t grow on trees.

5. All debt is bad. Pay off your home and cars as soon as possible.

Lessons Learned
While my parents had very good intentions, I’ve learned that these outdated ideas actually repel financial abundance. For example, if I were to believe that money is the root of all evil…why would I want to be rich? I don’t want to be bad or be perceived as evil.

I’ve learned that our thoughts lead to belief systems that lead to actions that lead to results. If the root cause of our results consists of money being bad, we won’t notice the abundant opportunities that surround us to achieve financial freedom.

My only problem is I don’t make enough income to even live on my own, but what I do make, I manage well, and I’m debt-free.

She started Roth IRAs for both of us when we turned 18 and funded them monthly for the first year, a habit I’m SO grateful to have started early. She also got our credit started early by opening credit cards in our names on her account when we were 16. We had to save every receipt in a little envelope system she rigged up, and there was hell to pay if something wasn’t accounted for. She also sat down with my brother and I on separate occasions before we left home and went through her monthly budget and how she schedules and pays bills. She also created a folder for both my brother and I with all of her life insurance details and legal documents and the appropriate contact information for when the time comes.

She tried to teach us about checking account basics–balancing checkbooks, etc–but I didn’t really “get” it until I started working at a bank at age 18 and learned allllll about the dangers of overdraft fees.

Not all of her wise lessons stuck: I did find myself with about 8k in credit card debt after I graduated from college, which I paid off in about 18 months with some help from her (rather than give gifts, she would write a check directly to the credit card company, reminding me how much freedom I would have once I didn’t have to pour every extra dollar into the bank’s pocket).