The following is a guest post from a true friend, Suba at Wealth Informatics.  She is such an awesome blogger and a sincerely sweet person.  Please check out her site for yourself – believe me, you will want to sign up for her RSS feed if nothing else.  Her posts are so informative.  I have been begging her to write for me regularly for more than a year now, lol.  If you don’t know her in some way, I would highly suggest trying.  I am a better person for knowing her.

February is National Parent Leadership Month, which highlights the role parents play in shaping the lives of their children. I personally feel that parents have the power and the responsibility to teach their kids to be good financial citizens.

What did my parents directly teach me about finance? Nothing.

Umm… What?

First, a bit of a background about me. I came to the US less than 10 years ago. I grew up in India, in a middle class family (read monthly income : 200 USD). My parents, my grandparents, my sister, and I shared a one bedroom home. Both of us got an excellent education, new clothes when necessary, encouragement to pursue whatever hobby that interested us (as long as it didn’t affect our education), and the freedom to ask questions.

So even though my parents didn’t sit and talk money with us and teach us how to handle money, I learned a lot from them without even realizing it.

Debt

Even when I lived paycheck to paycheck for a couple of years after I started earning, I never got into debt. Now after getting a good handle on my finances, I realize why.

Growing up, my mother used to tell me a lot of stories. In one of the stories, she described a scene when the villain knew that he is going to lose very colorfully.  Roughly translated it went something like – “Like a fish in a poisoned pond, like the wax near a hot flame; like a toad caught between the venomous jaws of a snake; the villain panicked and was as scared as a person in debt”.

By association, debt thus became this horrible, horrible situation in my mind. The image stuck with me; I never want to be a toad that is caught in between the jaws of a snake. I never want to be in debt.

I can still hear my mother’s voice in my head when I am tempted to buy something that I didn’t budget for. She would have repeated this line many, many times over the course of the 21 years I lived at home. She inadvertently made sure her daughter had a deep fear of debt.

Choices

My parents never said “no” when it came to education or learning a new skill. If I wanted to learn music, they made room for it in the budget. If I wanted frivolous toys on the other hand, I had to justify it. If I wanted to buy a new dress, I had to explain what was wrong with the ones I had. They made decisions constantly based on priorities. Their priorities and my priorities might not have matched , but I learned to value conscious decisions rather than just going with frugal decisions.

Charity

My parents never budgeted for charitable giving. But when my close friend couldn’t afford to pay for her education, my parents offered to pay for her books, exam fees and even her first semester of college. So even though I was not told to give to charity, I know first hand what impact that small help had on my friend. My friend, because of her education, is now much better off than she was growing up. I am proud to say that my parents had a part in that.

Budgeting

My mother handled most of our finances. We didn’t have credit cards or even debit cards, everything was cash. She used to collect every single receipt and enter it in a diary. When I was 18, I started getting a modest allowance. She asked me to record my spending, which of course as a “I know better than you” teenager, I never did. With 20-20 hindsight though, this is one skill I wish I learned from her. I didn’t have many expenses at the time and because I was living with my parents, I never experienced emotional spending. After being on my own for the first time, I succumbed to it. But after I saw the err in my ways, thanks to my mother, I had the foundation to bounce back pretty quickly.

Ask Questions

I know a lot of parents get tired of kids asking questions. My father is a scientist. He was disappointed if we accepted anything without asking questions. I saw him work relentlessly day and night when he couldn’t find answer to a question. For him, self satisfaction is the death of science. Fortunately, that stuck with me and I expanded it beyond science. I know the day I stop asking questions, I will stop growing as a person. I sincerely hope I will be able to encourage this with my own children.

Entitlement

I am really, really thankful to my parents and my best friend for teaching me not to expect anything. My parents were poor growing up, they worked hard for every single penny. They never once expected to be given anything, and in turn, made us justify our wants. We didn’t have a cushy life, in fact, there were many times when life dealt them lemons. Never once did I see them sit and complain that it was unfair. I don’t have the mental strength of my parents, I have the victim mentality, but thinking about them and what they would do in my situation is my pick-me-up.

Appreciation

This goes hand in hand with entitlement. My parents were always grateful for what they had and they made sure to tell us the sacrifices their parents made to bring them to where they are.

A Very Solid Foundation

More than anything, they provided a solid education, support, and a moral foundation that helped me realize that hard work and smart decisions will take you where you want to go.

They didn’t teach me about money. I never learnt anything about investing or real estate. We never had a lot of money to talk about expensive buying decisions. But they showed me by example, that if I wanted something, I have to work for it.

Whatever I am today is because of them. As an adult I feel that the choices I make today are based on the principles and values I gained as a child and young adult. Me and my sister were given the ability to make our own decisions, good or bad, and learn from them. But we could make our decisions with confidence only because they gave us a good foundation on which we can build our lives. I understand I am very fortunate and I am forever grateful for that.

What was your story growing up? How did it affect how you handle money today? Do our parents’ money decisions define us?

Crystal’s Comments:  This explains why I am so much more spoiled than Suba.  I do have an inherent sense of entitlement that I have been trying to suppress since no one is entitled to anything.  Unless the term “I deserve” is followed by “whatever I work for”, then I cringe.  I have caught myself “deserving” many things in my life and popped myself on the back of the head for it.  I deserve nothing other than what I earn through my actions and my work eithic.  I will just keep repeating that to myself over and over again…