Since financial education is pretty much non existent at school, you learn your money habits from your parents. Here is my family story.
I was raised in a middle class family. My dad was the sole bread-earner for most of my childhood. My mum, a primary school teacher, stayed at home to raise me and my sister until they got divorced when I was 15 and she had to go back to teaching.
My dad, a baby-boomer, had a strong career going and was making good money. We had the perfect life, long holidays, nice clothes, private school education and an amazing apartment.
My mum was not much of a spender. She was always frugal, taking us on holidays to family and friends’ houses, trying to find the best deal when she had to spend money… She got that from my grandmother, who raised 7 children while my grandfather was in the military. They lived through WW2, had food rationed and always were very smart with money.
My father on the other hand, making a decent salary, always wanted to spend the cash he had, and never showed much interest in long term financial planning. When he was in his forties, he abandoned his career, resigned from his 9 to 5 job at a successful company, and tried to start his own business. He failed miserably.
We ended up going through our very own recession period, before the global economy collapsed, making us go through more hardship. I remember my father complaining about everything we did, from using too much toilet paper to energy use, and having to get the green light from him for every expenditure, like clothing, even though I was a fast growing teenager.
I didn’t really understand what they were going through at the time because I was still attending the fancy private school, and my peers put a lot of pressure on me. Then gradually, more dads lost their jobs and more kids found themselves in a similar situation.
Looking back, I think my dad exaggerated a bit (like with the toilet paper), he had a comfortable emergency fund from which we were digging, and we were still sitting on valuable assets like the flat.
A few years after that, he launched another business and lost more savings. Add that to a messy divorce. You get the picture.
My mum went to live on her own and on her teacher’s salary. She was still very frugal, and tutoring on the side, so her life didn’t change much. She had no help from the government as she was above the income limit to apply, that lower middle-class that never gets much help in my country, while lower classes get free education, healthcare, or help with the rent. In spite of it all, she managed to buy her own flat, travel a bit, and help my sister once in a while.
What I learned from my parents at the time was a deep sense of frugality, and the idea of saving for a rainy day. I know friends who went through similar situations and had the opposite reaction, turning into spenders, because they felt deprived. So I can’t really say that you will be like your parents, but surely you will try to either mimic or reject their attitude towards money.
I am glad I ended up in the frugal and debt-adverse side of it!
What is your financial background like?
My dad died when I was in the first grade and my mom raised me and brother by herself for about 10 years before she ended up remarrying. For obvious reasons, my mom was pretty frugal back then and I think that rubbed off on me. However, my brother is a little more materialistic. I’ve always been a saver and I always put an importance on money… maybe too much.
It wasn’t until I was in my late twenties that I understood how to achieve financial independence. Now it weighs on my mind as I aim to quit the grind in around 9 more years. My parents (mom and stepdad) are at the opposite end of the spectrum. My mom is about to turn 70 and they are still working and recently just spent ~$85k on an RV. To me that’s all the motivation I need to keep going in the direction I’m heading! 🙂
— Jim
I can see that too, I sure wouldn’t want to be working at 70.. but too often people just set off to follow the same route because that’s all they have seen all their lives.
I hope so. My dad is an accountant and my mom is a saver. I have lived by their practices in terms of finances. I think I have learned most of them. I just hope that I can be like them because doing this would help me really a lot especially when I have a family.
Looks like they’re a good example to follow!
Great reading as always, Pauline. I rarely comment on blogs but read a lot about personal finance. It’s easy to slip into thinking that these blog writers and people who seem to have it all figured out must be “different” somehow, come from particularly good families, have the “right” background and so on. It’s so refreshing to read this and realize that you are like the rest of us, crappy parents and all 🙂
One thing though: your paragraph about how low class families get all the help and none goes to middle class sounds a bit whiny. Isn’t this the very definition of being poor: being unable to provide basic life necessities for yourself? I find it quite normal that people who can manage on their own don’t get state help. I’ve lived in France and have heard this before, I know the system gets abused but frankly I did not get the impression that poor people in France were the ones who profited most from state largesse.
Poor people don’t profit from the state. There is just a certain income threshold where if you are slightly above, you miss out on free university tuition (about €2,000), scholarship (around €4,000), and free healthcare. My mom was just above and it was like because she was making €1,000 too much, my sister was missing on €5,000 for college. They tried to make it more gradual but there is always an income bracket that is not ideal between low and average income. That’s what I meant, not that poor people abuse the system.
Considering the world of work is completely different from the way it was back in the baby boomer era, I sincerely doubt that I’ll end up like my parents. That being said, my mother’s frugal spending habits have rubbed off on me pretty well, which has equipped me to deal with the challenging economic times better than most people that I know.
That is a great gift your mother gave you, it makes such a big difference between two people who earn the same, if one goes into debt and the other manages to live well.
I learned a lot of what NOT to do from my parents. They made a decent living, but loved to spend. This got them into a lot of trouble. I don’t want to repeat the mistakes they did, so I make sure not to follow in their footsteps.
Good think you’re learning from their mistakes!
My parents are good examples to my financial needs. I am just lucky because they teach me financial strategies from simple to a more complex one. Though they’re not investors, I think it’s somewhat a good background for me to embark in investing.
Seems great they encourage you to save and invest
I won’t be as bad off as my parents, but I will not retire wealthy. This will not happen to my kids. Because unlike my parents who taught me nothing about money, I’ve been educating my children since they were old enough to understand. I’ve also kick started their retirement by helping them fund ROTH IRAs. If my kids take my advice they will retire with more than enough money.
Good job! That’s the best thing you can do for your kids
Very interesting story. I’ve been thinking a lot lately about how my parents raised me to deal with finances, and I have to say, I’m not sure they did the best job of that. On the other hand, I was a very willful and independent child, and I didn’t get along well with my father, who managed all the money in our household, so part of it is indeed my fault.
I often think I would have been better off if I had a better relationship with him and wasn’t so resistant about him teaching me (which generally involved long lectures where he talked down to me as if I was an infant – so you can understand why, as a teenager, I was a bit resistant). As an adult myself now, I can say that if I were in his shoes and my child wouldn’t listen to me lecture them, I’d need to find some other way to teach them because I am responsible for doing this. It’s interesting to thing about now.
ha, tough job that of a parent. You can’t be too strict yet you have to enforce good sense into your kid… that can’t be easy.
School taught me nothing about money and neither did my parents. My mom always saved saved saved…I somehow picked that up from her. Other than that, no financial education at all.
It turned out alright because I actually spent a lot of time learning it on my own. I was able to create my own unbiased education free from “conventional wisdom.” Instead of working a regular job for a regular check, I have the mindset to make my own wealth and be free and independent. At 30 I achieved that goal and life is great!
I’m probably the 1 in a million that is better off NOT having been taught anything. It’s probably best to learn about money habits at a very young age because most people won’t learn how to save or invest without it being taught.
Good job Eric! I imagine you would have wandered off the beaten path even if you had been given some financial education. I was told to get a job and a career and bla bla and still didn’t follow the advice!
I learned a great deal about frugality through my mom and have incorporated that money lesson throughout college (and now starting work soon!). I am glad to hear that your mother was very frugal and passed on that lesson to you. A dollar saved is more than a dollar earned because of that compound interest!
My parents are great people and hard workers, but they always like to live well. I think they were always more concerned about enjoying today instead of worrying about tomorrow. That’s not to say they aren’t responsible. They pay their bills on time and all of that.
What they didn’t do was save for the future. I know that I picked up my money habits from them. For sometime I lived just like they did. I’ve had to retrain myself to save and think about tomorrow. It is a hard learned lesson sometimes, but it is an important one.
This is a good post you bring up. I hope my daughter does not end up being like me financially. I hope by the time she becomes independent I can help her avoid much of the debt I had to incur over time. Luckily I have a lot of information I can teach her from my experience with student debt mostly. If she needs to take after me in some way, I hope it is the frugal aspect that I try to maintain now.
Thanks, great post. I find your opinion quite interesting, but the other day I stumbled upon a completely different advice from another blogger, I need to think that one through, thanks for posting.