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?