Tuesday, April 1, 2008

Money lessons from my parents

My parents never sat down and talked to me about money. But that doesn’t mean they didn’t teach me anything. They certainly did, but not with direct instruction. The vast majority of what I learned about money from my parents came from their actions

One memory I have is of my mom standing in the kitchen saying “you mean, take it out of savings?” in a tone that said “you’re an idiot”. I have no idea what they were talking about but it still conveyed quite a bit of information. First of all I learned that people have savings accounts. That saving your money was a normal and expected thing to do. Secondly, I learned that you don’t go dipping into savings for every little thing. I could see that the savings account was sacred.

Another lesson they taught me through their actions was to live within your means. To start with, my mom drove the wheels off every car she ever owned. We never went out to eat and we never went on vacation. And during the recession in the early 90’s they barely even spent money on groceries. I remember my mom’s student loan company calling every single day looking for a payment during that time. (Maybe fielding calls from creditors every day at age 13 is what gave me my fear of debt.) But no credit card company ever called. I’ve never seen my mom use a credit card.

But they didn’t teach me everything. There are several things I wish I known when I went out on my own.

I wish they had taught me how to balance a checkbook. I figured it out on my own and have only bounced a few checks in my life, but I could have been more prepared. I also wish they had taught me how to make a budget. Again, I figured it out, but it would have been nice to be taught. But mostly, I wish they had taught me about investing. Investing for retirement especially. I think they reason they never brought it up is because they themselves were not saving for retirement. In reality, I was the one telling my mom the importance of an IRA. She does have one now, but I had one first.

If you enjoyed this post you may also enjoy: Memories

Picture by digitalsextant


JB said...

Right... my parents were the same way. I don't ever remember sitting down with my parents and them giving me any lectures on money - but somehow through their actions I realized how handle money properly.

My dad did teach me how to balance a checkbook...

I think my dad is really smart with money, although I don't know of his exact finances right now... but I've been trying to ask for help and guidance with buying a house lately and he doesn't seem to want to give me any input. I'm not sure why.

Lynn said...

My mom showed me how to balance a check book, financed my first car, showed me how to make a budget and helped me start a savings account. But she and my dad never really told me HOW important it was to have money saved. So now I am married with 2 kids, and no savings *sigh*. Try as hard as I can, I can't seem to put money away and leave it there. Something always comes up....and that money is the first to go. We are not poor, we are not rich....but we live from pay check to pay check and I wish we had a back up just.in.case.

Seb said...

Great story. My parent's frugality definitely wore of on me. Even though my wife and I can afford a more lavish lifestyle, I keep holding myself back because I never know what financial troubles might be around the corner.

"Future Millionaire" said...

I don't know many parents who sit down and teach there children about finances. Althought in the case of my mom, I don't know if I'd want her to have sat down and taught me how to balence a check book - it probably would have gone something like, when when you bounce this check just don't return their call for 4 days and then you should be able to get an advance on your credit card so you can call them back and pay it.

If/when I have child I plan to sit down and teach them all about finances. I also plan to start them off on the right foot by starting a 529 and as soon as they get a job helping them to contribute to a Roth IRA.

Mom @ Wide Open Wallet said...

Future Millionaire: I plan to open an IRA for my kids too when they get their first jobs. Hopefully I'm in a place where I can contribute to it for them to get them off on a good start.