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…
Entitlement is a very difficult hill to get over. I feel a good bit of it myself…mine mainly stems from expecting a well paying job with a college degree. I have realized now that this is certainly NOT a reasonable expectation and I am working on my feelings of entitlement. It’s tough going, but worth the effort.
I always love getting perspectives from people who were born in other countries. It’s amazing how different they can be from what someone raised in the USA considers normal. We all have so much to learn from each other!
Great Post, thanks for sharing.
I wrote a post the other day on my blog on “Should parents should teach their children about Money”.
My parents didn’t have a big bank account nor did they teach me about investments, real estate,retirement or what happens when you don’t have enough money.
My parents paid cash for everything when we shopped besides the obvious big purchases. I remember cheques and a lady at the bank drive-thru window as there were no debit cards.
Growing up in the 70′s and 80′s my parents taught me that I should save for what I wanted so I got a paper route. Probably one of the best moves I made as a child.
Times have changed and I believe we as adults have a broader knowledge than our parents generation about finance. Education on this topic should start at home and guide children the best we can.
I believe it’s imperative to learn at an early age about money. Those sacrifice stories our parents shared can potentially be avoided if we share the wealth of knowledge with today’s generation.
What I did learn from parents was how things were done in the ‘old days’, pay cash for what you need and to love your family and friends.
I definitely learned a lot about finance from my father, and I’m glad he did this or I would most likely be clueless.
Great post, Suba!
It’s wonderful to have parents that are willing to teach their children about priorities and helping them understand the reality that they cannot have everything they WANT.
So much of what we learn isn’t by what people/our parents say, but it is more about what we witness them doing.
Personally, I wasn’t taught anything regarding finances as a kid. All spending my mom ever did was on a credit card and she ended up filing for bankruptcy when I reached high school. Little did I know that her spending habits would eventually lead to many of the mistakes that I made with finances.
Not that I blame my mom/parents for not teaching me how to handle finances (or blame them for my early financial struggles), but it is just another case study that clearly shows that parents who mishandle finances and manage money poorly will have children that do the same thing.
I am a hodge-podge of my parents teachings. I know I was spoiled as a child (that was my mom). The only thing I ever really wanted and asked for over and over again that I didn’t get was a cat. I like being spoiled (and I am the first to admit I am spoiled). So in life I have made sure to get a good education and a good job so I can spoil myself. I do not expect to be spoiled by others. But I am not a stupid person—I have taken 5 semesters of math (3 calc, diff equ, and stats). I know that you can’t spend more than you make and that you have to save up for what you want (that is from my dad).
I have no idea how I will raise future kids…but I am guessing I will spoil them. That is why I am thankful I married a guy who was not spoiled and always worked hard for what he got. He is the level head to my emotions.
I learned what NOT to do from my parents, living way above their modest means and suffering great financial pains later in life. It’s the biggest reason why I live way below my means and carry no debt except for a mortgage.
i received an allowance as a kid for doing absolutely nothing..
my parents never said a word to me about budgeting or anything else..
as such, i was always pretty terrible with money..
i have had to train myself and live and learn the hard way..
most folks i have met from other countries seem to be much more conservative with their spending and their financial decisions.. we could learn a lot from them.
Woo hoo, Suba!!! Love it! I’m thrilled to know these two queens of personal finance!
I deserve the things that I work toward. Well said.
My parents made me save half of my babysitting money and things like that, but I actually think the best lesson I learned from them I learned from hindsight- that being on a tight grocery budget doesn’t mean you can’t have wonderful meals. When I think back on some of my favorite foods as a kid- creamed/chipped beef/SOS over toast, cube steak, teriyaki chicken (ie skin on, bone in chicken thighs marinated in teriyaki sauce), and homemade pizza – I can realize that we ate these meals because we couldn’t afford “better”. But I didn’t know it at the time. Before my parents divorced, I can’t remember ever having a store bought frozen pizza. If we had pizza at home, it was homemade on a cookie sheet with shredded cheddar cheese and hamburger. I loved every bite of it.
What a great post. There are so many things we learn from our parents, but it might take a few years to figure out just what they were! My parents were both children of the Great Depression. They valued EVERYTHING. My dad was always “cheap”, but I realize now that if I know how to make do with things that are store brand and not name brand, it is because of what I learned from him. They are both gone now, and I miss them. But I think their influence is in me every day.
Thanks for hosting me for the day and for your kind words Crystal. I really appreciate it.
Thanks everyone. I think we learn a LOT from our parents whether we like it or not. And that includes the mistakes too. In my case, they were open about their mistakes so I was cautious about those. I am sure I will make many mistakes on my own. I just hope I will be as good of an example to my kids as my parents were to me.
I think there’s a strong correlation with parent and child financial behaviors. Mine were pretty frugal and I’m not that hardcore, but I’ve never had any high interest debt and always spent less than I made, even in college. Meantime, many friends I know that aren’t so good with money had parents, that in hindsight, weren’t so good with money either (kids don’t pick up on this stuff, but as a young adult it became evident).
I enjoyed reading this post, Suba, but then again I do like reading you. Apart from that, you did bring memories back. My parents didn’t teach me much about the technicalities of money but when I was off to university my mum said: ‘Learn to control money otherwise it will control you.’ Good advice! Problem is that I forgot about it for a long time; when I remembered I started learning because for me knowledge and informed action constitute control.
Sounds like your parents actually taught you a great deal about finances. Nice perspective on how this all came about. Thank you.
Great post Suba. I’ve followed Crystal’s advice and signed up to follow you via email.
My parents taught me to live within my means, but not to go cheap on things that matter. They encouraged giving to charity and thinking of others
This is a great post. In my upbringing, I would gladly give up my family’s hard earned millions for parents that loved and respected each other, as well as emotionally supported their children. Financial support is all well and good, but money can never take the place of real love and support.
Sounds like your parents were great at teaching you about finances through their parenting. I love that.
My dad always told me to never ever ever carry a balance on my credit card, and I was afraid of what would happen if I did, so I never did it. That’s fantastic that your mom taught you so much subconsciously.
Awesome post. Great topic as well. I posted about some similar on my blog titled 10 Personal Finance Lessons I Learned from My Dad. I lost my dad when I was a teenager, but thankfully I had already learned major personal finance lessons from him. He lived a life of smart personal finance and although it didn’t immediately effect me, once I grew up I used those lessons to get myself out of my debt mess and spending problems. I’m so lucky to have had him to look up to when I was young. Thanks for the reminder and for your story.
I enjoy your discussion of entitlement. Growing up my parents stressed working hard to achieve personal and later financial goals. Nothing is giving to you and it’s up to you to make the best of your situation. Encouraging your children’s work ethic from an early age is definitely something parent’s should implement. Advocating conscious budgeting and the value of the dollar are also great tools.
This is one of the greatest blog posts I’ve read. I love that you see education about living a good life and being a good person as an aid to making smart financial decisions-because it’s true. The #1 thing to remember in order to be successful in life is certainly not to expect anything to be handed to you. Happiness and success doesn’t just fall in one’s lap, its necessary to set goals and work toward them for you to achieve the things you wish for in your own life. It sounds like your parents are very smart and loving people, which surely translated into you being the same way. Being confident in the decisions you make is part of the battle as well. Thanks for the post!
Like a fish in a poisoned pond… wow oh wow, that is good. Great post, and really interesting how our attitudes about money are formed.
My parents lead by example. In the 60′s, your parents didn’t really talk to you about money or anything else. In turn, we never really talked to our son about money until he started driving. Since he is an only child and only grandchild on both sides, he’s pretty spoiled, but not rotten. He never got everything he wanted, but he also didn’t really do without. We gave him one or our credit cards when he started driving and told him he had to pay it off when the bill came in. So I guess without really trying, we taught him a little about money. Then he married Crystal and she has taught him the rest! Suba, thanks for making our Crystal at home in your home!
I agree with the fist point about debt. Is something that here in the US people go in to like is nothing. Is often to late when they realize that the debt is to big and they will loose it all
Sounds like you were taught some very valuable lessons growing up about life and money. Teaching kids not to have the entitlement mentality extends beyond their relationship with money. Your parents made sure you grew up a well rounded and level headed individual and they trusted you can handle the rest. We are parenting along the same lines.
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