How Your Parents’ Financial Habits Could Be Affecting You Now

December 22, 2014

When I was younger, I always had some sense of the role that money played in the life of my family. My parents were very discerning with purchases – travel and experiences always took precedence over everyday luxuries, and my sister I knew this well enough to not ask for them. We saved so we could have the big things we wanted tomorrow – an idea that rooted itself firmly into my understanding and subsequent handling of money in the future.

But there was also the downside to this diligence. There have been times in my adult life where I’ve denied myself necessities because I operated from the fear that I sometimes sensed in the way that my parents saved. It wasn’t what they intended, it was simply a feeling that I picked up on.

We learn a variety of things from our parents, but sometimes it’s the indirect messages and lessons relayed through actions that really have an impact on how we handle things as adults. If you are struggling to understand why you handle money the way that you do – whether you label it “good” or “bad” – you might want to take a look at what silent cues you picked up along the way.

Recognizing where your money habits come from

Most of us are so entrenched in our usual way of handling money that we don’t think twice about where our habits actually came from in the first place. But digging down to the roots and gaining some understanding about our “why” can do wonders in shaping the way we handle financial tasks and issues in the future.

Think about this: when we have relationship issues, we look back to what we witnessed between our parents; when it comes to managing a household, we think back to our childhood and decide what we want to carry over and what we don’t. Most of the time we are fully aware of how our childhood shaped us – so wouldn’t it be the same with something as significant as money?

If you try to trace back to your first memories of money – physically handling it, overhearing a conversation about it, learning a lesson about it – what do those memories look like? What are the feelings associated with them?

Think about your parents’ attitude towards money. Were their conversations fear-based? Did they spend money without much thought? Or were they meticulous with their spending, passing down the importance of care in all money matters as a result?

Pinpointing the messages you received

At one point, my dad taught classes to help people get a hold of their debt by first understanding why they were in that situation in the first place. He placed a heavy emphasis on the money messages participants received while growing up and how those helped pave the way towards heavy debt accumulation or poor money choices.

While the stories varied from person to person, the messages received were universal. Do you recognize any from your own childhood?

You learned there was never enough.

If your parents continually relayed to you the idea that there was never enough to go around, you are likely fearful of money and might struggle with the belief that future planning is futile since there just won’t be enough to get you there.

This is my biggest issue – one that I struggle to silence often.

You learned that you spent what you had when you had it.

Many households are run on the idea that you spend what you have when you have it. There is very little consideration paid to the bigger picture, and all paychecks are spent before the accounts are replenished. (Perhaps this is why we are such a debt-loving culture?)

You learned that control was always out of your hands.

If your parents had an external locus of control in regards to money management, there’s a permeating belief that someone “out there” will always be in control of how much money can be made, and there is always another bill collector just waiting to pounce. In other words, there’s no use trying to get ahead because the world just won’t allow that to happen.

You learned financial conversations brought turmoil.

Money issues can wreak havoc on relationships -- thus why frequent arguments about money are said to be the top predictor of divorce. If you grew up in a household where money fights were commonplace, you are likely to associate money with upset, fear, and turmoil.

You learned avoidance was easier.

Did your parents allow bills to pile up unopened before finally breaking down and seeing what the damage was? I had a friend who saw this growing up and he adopted the habit himself as soon as he was old enough to start opening credit cards in his name.

You learned if you don’t hoard, you lose.

This seems to be the plight of many millennials (myself included) who saw their parents loose so much during the Great Recession. There is now a visible distrust with financial institutions and many young people are missing out on investment gains they are terrified to bet on.

Are you able to recognize some of the messages you received in childhood (and beyond)? How have they shaped your decision-making today?