Money Blueprints: What Our Parents Taught Us About Money
I had dinner with two friends from high school last night. We shared good wine, good food, and, especially, good conversation. Much of our discussion focused on our shared history: the things we did twenty years ago (or 25!) that now seem as if they might have been done by a stranger. (Yet those strangers were us.) We talked about how we perceived money when we were younger.
Sparky and Stew grew up down the road from each other. I didn’t meet either of them until junior high school. Stew’s family was poor. They lived in a single-wide mobile home. His father built bar stools in the garage; his mother waited tables. “I remember your dad as an entrepreneur,” Sparky said last night. “I remember him building those stools. I admired that.”
“Yeah, he was a sort of entrepreneur,” Stew said. “He tried, but he could never really make a go of it. We couldn’t survive on the money he brought in making bar stools. In fact, he financed that operation on credit cards. We lived on the tips my mom brought home from waiting tables. It seemed like she was always working to get us money. She hoarded her money. She watched it. She had to make it last.”
“Huh,” said Sparky. “I never realized that. I mean, I knew you were poor, but I always thought of your family as wealthy. You lived in a trailer house, and you didn’t have much, but when I visited your house, it was an adventure. I remember sleeping outside in the tent —”
“That’s because we didn’t have room inside,” Stew said.
“I remember sleeping outside in the tent,” said Sparky. “I remember you seemed to live in a fantasy land. It was like your dad had a dream job. You had a basketball court in the woods. And a wiffle ball stadium. Plus you and your brother always did this wild, imaginative play. It was awesome.”
“But I didn’t learn much about money from my parents,” Stew said. “I learned more from yours. I remember going over to your house and marveling that you had opened a savings account. I remember that passbook you had, and how your parents would drive you into town to make deposits. I went home and told my mom that I wanted a savings account, but it never amounted to much.”
“I still have that savings account,” said Sparky. “The same account my parents opened for me when I was a kid is my savings account today. So, yeah, I guess my dad wasn’t an entrepreneur, but he did teach me a lot about money. He did some business on the side — raising produce, growing Christmas trees — but mostly what I learned from him was how to save. And how to invest. I watched how he invested his money and let it grow. He’s played a very active role in his investments, so in a way I think of him as an entrepreneur of the stock market.”
“I wish my parents had taught me some of that,” I said. “Whenever my dad had money, which wasn’t often, he spent it on toys. He didn’t save. He didn’t invest. I can’t remember that he ever invested a dime in anything. He bought computers and airplanes and sailboats. But then when he was broke, he turned around and sold them again. We were always poor because he couldn’t save his money.”
Sparky laughed. “I remember going over to your single-wide mobile home and being scared that I was going to fall through the floor!”
We all laughed. I said, “It’s still that way, you know. The box factory’s offices are in that old trailer house, and it hasn’t improved with age. We’re just too damn cheap to replace it. Our wives hate the place, and I can’t blame them. But it costs nothing for us to keep.”
Sparky nodded. “You know,” he said, “even though you were poor, and even though I was afraid of falling through that floor, I looked around at all the gadgets you had and thought of you as rich, too. Your family had a fancy stereo system. Your dad let you drive that Datsun around when nobody else in school had a car.”
We paused to order dessert, and Sparky continued. “It’s as if although your families were poor, you created a world of wealth out of nothing. Stew had this fantasy wonderland of imagination. J.D.’s family had gadgets that I envied.”
“And I envied you,” I said. “I remember going over to your house and thinking how amazing it was to have a nice normal home on a lot of property. I wanted that. I liked having gadgets, but I would have rather not lived in the trailer house.”
Our chocolate torts came. We began to pick at them. “One thing I’m glad of,” I said, “is that my father taught me about the entrepreneurial spirit. I’m glad to have had a chance to learn from him. I used to hate working at the box factory, but now I recognize that I would not be the person I am today without that experience.”
“Yeah,” said Sparky. “We look at ourselves now and wonder how did we get here? But it’s all a result of everything that we’ve seen and done. The girls I dated in high school. The decade I took off after college to travel around the U.S. and the world. Sometimes it’s frustrating that I’m 38 and only make $30,000 a year, but I look at the experiences I’ve had, and I look at who I am today, and I know that I would not be this person without everything that had come before.“
I smiled. “I just wrote about this subject today,” I said. “I’ll post it on Sunday.”
In Secrets of the Millionaire Mind (my review), T. Harv Eker writes that each person possesses a “money blueprint“, an internal script for dealing with money that comprises the lessons we learned in childhood, especially from our parents. This conversation with my friends illustrates this concept. My problems with money as a young adult were a product of the blueprint I inherited from my parents. They were modeling a relationship to money — they never realized what sort of effect it would have on me and my brothers.
Yet this blog is a direct result of that modeling, too.
Become A Money Boss And Join 15,000 Others
Subscribe to the GRS Insider (FREE) and we’ll give you a copy of the Money Boss Manifesto (also FREE)
There are 17 comments to "Money Blueprints: What Our Parents Taught Us About Money".
I’m not the craziest about Suze Orman, but I have to admit, in the 9 Steps to Financial Freedom, she hits the nail on the head. Sometimes our past experiences with money shapes how we perceive money and its purpose in our lives. Losing it, saving it, buying stuff with it, etc. Parents can go a long way teaching kids about money. My folks always told me not to worry about it, but when they’re having conversations about it in a foreign language all the time, it’s obvious *they* are worrying about it. I guess that’s what made me a worrier in the end! The inadvertent reverse psychology worked since I’d rather mind my money than not.
Thanks for the post J.D. I’m so glad I’m not the only one that talks about money with friends. 🙂
I agree, mapgirl. I think that the 9 steps is probably suze’s best book. I’ve read much of the other stuff out there, but the ideas in that book are different than I had found elsewhere. And *thats* why I like her. Although I am still learning from Suze, some of it starts to ‘eat like popcorn’ at this point.
As for me, I’ve always worried about money. And I think that is mostly because I knew that my family didn’t really have enough. Sure we were never homeless or on the street; but the fact is, if there were an emergency or something, there would have been real problems. Like you say, mapgirl, its not something you can easily hide from children.
Very nice piece. As with many things, we often fool ourselves into thinking we have learned how not to behave by observing our parents and learning from their mistakes. Especially as teenagers we rebel against our parents’ approaches and promise ourselves we’ll never be like them. And yet genetics is a powerful thing. I find myself repeating many of the same financial mistakes my father made, despite my firm conviction as a kid and even as a young adult that I would never do so.
There’s truth to that money blueprint idea, but I also think there is a blueprint in general that can overcome and or affect the money blueprint. My parents never talked about money, and i got that all to familiar “you dont need to worry about it”, sure I had a ‘savings’ account when I was little, and they made me put money into it once I had a job @ 14…but they never really told me why. I was never taught how money works, just that I’ll need it. I was never taught how to grow money, just that it will get bigger by like 3 dollars a year in a savings account at the bank. I remember when my parents lost a lot of money because they had a lot of their investments (not retirement thankfully) in utilities (hurray enron and the like) (i had no idea what all this meant at the time, keep that in mind) and that i’d have to pay for my own college. However, the one thing they did instill in me is the drive to never stop learning. Learning was held at one of the highest levels in my household growing up. I’m not talking about how parents would give their kids money if they got A’s (which some friends had…I didn’t), I’m talking about learning the lesson, learning the material, and using it to grow, and never stop asking why. It is that quality that has basically driven me to learn about money and completely change my spending/investing practices…or rather, actually invest/save and not spend all my money because i can.
My parents lived by a principle that I have only begun to appreciate after I grew up, left home, and had to start making my own living. They always put the interests of their children ahead of their own. They did what was best for their kids, not what was most enjoyable for themselves.
They invested $3000 in an IBM PC XT (8086) – no hard drive and 640k of RAM – back in the 80s. A lot of money for us back then. That was followed by another XT, a 486, and a series of other computers as time went on. These were not toys, although my brother and I spent countless hours playing video games on them. They were educational tools where I quickly lost any fear of computers and explored how they worked. Dad convinced Mom to buy a set of the Encyclopedia Britannica, which cost another couple of grand. They spent countless hours and dollars on piano lessons, swimming lessons, skating lessons, and trips for math competitions and engineering competitions. Dad spent hours teaching my brother and I math from old textbooks. Mom spent hours bringing us to the symphony and to music lessons. Yes, as Dilbert, I have The Knack. I also have an appreciation for art and music. But I wouldn’t have been able to develop these assets without the constant sacrifice of my parents.
Like fire, money seems to be a good servant, but a poor master. My parents put their money, time, and resources in service of the education and care of their children. I believe my life was enriched for it, and (perhaps strangely) their lives are more satisfying for it. I hope that if I ever have children (and if my fiance has anything to say about it, we definitely will) I live by the same principle. I may not have the most perfect children in the world, but I’ll likely sleep better at night knowing I did everything I could to give them every advantage I could afford.
My parents never talked about money with me. I grew up thinking it would magically appear whenever I would need it. I had no concept of how money worked. It has taken me years to understand the basics of a budget and just now I am understanding the power of compound interest.
I won’t make the same mistake with my 1 year old daughter. I will teach her everything I can about the value of a dollar.
Well, I’ll suspend my disbelief, even though this post has a slight Rich Dad, Poor Dad feel.
The point is well made, one of the biggest factors in my own finances are the scripts that I grew up with. Its why I know to pay my credit card in full but am lost at sea with investments.
Here’s to overcoming our upbringings.
Excellent post.
During my kid-dom, my parents never talked about money. Never. The closest I got to a money education was watching my mom sit at the kitchen table on Saturday afternoons with mountains of bills and paperwork in front of her. Whenever I’d ask her what she was doing, the answer was always brief: “Paying bills.”
And so it was. What I learned about money from my parents was that it was something to be feared, something to keep shackled and secret and away from the light of day, because anything that’s so out of control ought to be kept under wraps.
It took me about 20 years to figure out they had it all, all wrong.
I really agree with your primary thesis – that the lessons we learn both consciously and subconsciously from our parents about money never escape us. For example, the reason I am so fascinated about keeping credit card debt free and managing my credit so that I can maintain a good credit score is entirely because of the failure of my parents to do so. On the other hand, based on their example, I am always afraid that I might have inherited their lack of self-control. I fear that I won’t be able to manage them properly, and that their fault might become my own.
This sounds like intro to a book to me….so you going to write one? I just love your blogs and think you should!
I find it interesting in my family how differently children in the same home respond later to what they’ve learned about money from their parents. I have two brothers, and we all have different approaches, though they all seem to stem from the fact that we don’t want to make similar “mistakes” that our parents did.
For instance, I’m incredibly concerned about saving and reducing/avoiding debt. My parents never saved and made several poor decisions with what they did have. Where they saw every dollar that came in as a dollar to be spent on something, I see it as an opportunity to put some of it away for later use, sometimes to the point of not allowing myself to enjoy it.
One of my brothers, on the other hand, has taken a different route. He makes a decent living, but he’s by no means a saver. Rather, he is more focused on being able to provide the “nice things” for his family, taking them on regular vacations, etc. This was something he apparently felt was lacking while growing up. On occasion, I’ve even seen him panick around Christmas time, wanting to be certain he’s getting his kids “the best”, never feeling like he’s done enough.
Then there’s my other brother who frequently states, “I hate money.” He wants little to do with any financial planning in his home, seeing it as nothing more than a source of tension. This was true in our home growing up, as our financial state was both a source of tension at times as well as a thing of mystery to us as kids. Luckily his wife has a knack for finances.
Growing up, we were given an impression that money was an enemy to be dealt with so to speak rather than a tool to be used. Though we all have our different approaches to finances, it seems to have produced a bit of the same response in us; anxiety.
[Fortunately, though, it has also resulted in a healthy concern for the future as we see our parents aging. We’re all (in different stages) taking steps to prepare for future needs.]
I think this is an important footnote on financial mental health as a child growing up: In retrospect, my parents were not financially progressive, however; they must not have argued or discussed how cash deficient we were because I never realized we were poor. Mom always found ways to provide just enough so that I could build on life experiences-soccer, music, boy scouts, whatever.
I read about a Chinese couple- Chicken Soup for the Soul, vol. #44 or something. They scraped and saved to buy a restaraunt. After that, they scraped and saved to pay for the restaraunt, living in the back, eating leftovers, sacrificing entertainment and other life enhancing activities to be only practical. They met their goal and were eventually owners of their very own restaurant. They became rich.
To me , too much was lost along the way. Like J.D. said, the experiences along the way are what define us. Some might think it’s easier said than done, and I agree. Where there is will, there will be a way.
I think the three things I learned about money from my family growing up were “there’s never enough of it”, “debt is bad” and “avoid asking for money or things that cost money, because it just makes people feel bad”. Saving was definitely seen as good, but also as neigh well impossible.
But my Mom also put a high priority on what was best for my sister and I when we were growing up. She couldn’t begin to afford all the advantages @squished18’s parents were fortunate and generous enough to bestow, but she made sure we lived somewhere with a good school district, even though that made things much harder on her than they had to be, and put our future ahead of short term desires in other ways.
So the lessons were a mixed bag. Learning to abhor debt was definitely useful. The scarcity mentality less so– my sister and I once had an interesting discussion about how our history made it so difficult to negotiate salary or ask for a raise. (after all, asking for more than is offered is unreasonable, demonstrates that you don’t grasp the situation, and makes you look bad while making the “askee” feel bad. Not real good baggage to bring to a negotiation. Also, it’s hard to really believe that you should be paid more for the work that you do when you’re in your 20’s (as we were at the time) and earning more than the person who raised you, regardless of what other people who do the same work make).
Learning about investing and making money definitely had to come from other sources than home. But we both went to good public jr high and highschools, and good colleges, thus opening the opportunities of a good education. So my Mom did a good job. She couldn’t teach us what she didn’t know herself, but she gave us everything she could. Thanks, Mom =^)
This is such a sweet post. I think most people feel that “grass if only greener” sentiment when talking about how parents shaped their money values. I know I certainly do.
I’d love to hear from someone who thinks their parents taught them exactly what they needed to know about finances, and as a result, they have no debt, a retirement account, an emergency fund, and they’re spending less than they earn.
I loved both my parents dearly, but I am TOTALLY a product of both their ways of handling money – and working. My father worked like a dog, sometimes 48 hours straight, but he also had no sense of money – he worked for it, and if it was something he wanted, he got it. This is true, but when you have five kids in private school, that doesn’t blend well. He was first in line with new technology – was interested in it, wasn’t afraid of it, and used it in his business, which was highly competitive. He also put a lot of money into hobbies which, frankly, he almost never had time to pursue. And I married a man who treated money virtually the same way – he didn’t EARN it, but he spent the money I earned on any toys he happened to want at the time, and once he had them, he wanted something else. I patterned my behaviour on my Mom’s – I watched her wear the same old coat and same old clothes year after year, trying to balance the spending my Dad was doing and the things the kids needed by doing without, herself. So from an early age, I didn’t ask for things I wanted, because I worried about money. Of course, the other kids, who DID ask for what they want, got what they wanted. I carried that behaviour into my marriage, too. My Dad was always behind in his bills, money was always a silent, never-discussed worry. I wish they HAD taught us about money. I’m struggling to learn now what I should have learned decades ago.
I think my parents did a good job. My dad used to complain about stuff that was too expensive, or about how there wasn’t money for this or that, but there was always enough for our needs plus some extra for soccer or piano lessons, computers and encyclopedias and college. When I noticed things my friends had, my mother explained to me why: one friend lived in a beautiful house and had all the latest toys, but her parents were deep in debt with no savings; another friend went to Florida every year but had to work three jobs in college. I’m not perfect, but I learned the value of saving and avoiding debt and I do pretty well thanks to my parents. I also have no worries about needing to care for them down the line, as they have prepared themselves very well. My next goal is to take care of that for myself, as I will have no children to fall back on should I fail to prepare. 😉
My parents didn’t discuss money either. They worked and spent. When I turned 17, my parents told me I was responsible for everything (car insurance, gas, clothing, doctor bills,college, etc.) that I needed/wanted. So I worked and went to school. I never had a credit card. Or any debt. I cashed in my bonds to pay for college. If I needed money for a doctor and didn’t have it, I asked my sister for it and paid her back. Alot of times, I didn’t think it was normal or right to treat a kid like that but it was not surprising to me. Heck, they even asked me for rent to the tune of $300/mth! I refused since I couldn’t afford anymore bills! They were not poor by any means. I think they really just didn’t know how to manage money and once I got a job, they expected me to cover things that they didn’t want to pay for anymore. I do pay my bills on time and don’t buy anything that isn’t practical/sensible. But I think that was a lesson I learned on my own, not necessarily something that my parents taught me…