This post is from our regular contributor, Erin.
I’m sure many of you have learned, one way or another, how to manage your money based on the example set by your parents. What we grow up with tends to stick with us.
My parents were a mix of good and bad when it came to money management. While they’re frugal, they were kind of forced into it, as they’ve spent most of their lives in debt.
I was able to learn a few lessons on what not to do the “easy” way (from the sidelines), and I’ve always been grateful for that. I can’t imagine what my financial situation would look like now had I not learned these difficult lessons from them early on.
I enjoy passing on the financial lessons I’ve learned from my parents just in case anyone else can benefit, so here are six of them!
Lesson #1) Ignore the Joneses
I truly wasn’t aware “keeping up with the Joneses” was really a “thing” until I was much older. My parents did.not.care at all what other people were doing with their money. Sure, sometimes the jealousy monster reared its head, but they never gave in.
My parents hardly ever bought name-brand anything, unless it was something they were going to get a lot of use out of, like a vacuum, tools, or kitchenware (they focused on quality when it mattered).
Over time, I realized the “popular kids” in school were the ones with all the fancy stuff, but I never understood why it was so important to have. I’ve never cared to follow short-lived trends just for the sake of fitting in. I’m glad my parents passed that down to me.
Not caring what other people think of you, to some extent, can save you a lot of money!
Lesson #2) Always Look for Sales
For the most part, I’ve never seen my mom buy something at full price. She always waits until something is on sale to make a purchase.
I’ve followed suit, especially when it comes to clothes. As soon as I go into a store, I head for the sale or clearance section. Admittedly, I don’t like shopping and I don’t particularly care about fashion, so it works for me. ; )
It’s not enough to just shop sales, though. The real key is knowing whether or not a sale (or price) is good. I was raised to be a savvy shopper, so I’m always aware of prices.
If you’re not, there are a few things you can do:
- Shop online beforehand and familiarize yourself with going prices for things you’re looking for.
- Look underneath the sale tag when possible. I’ve seen “new low price!” advertised when something was $.03 cheaper. Seriously.
- Use price comparison apps on your phone or on your browser.
Never shop blindly!
Lesson #3) There Are Plenty of Free Things to Enjoy
Growing up, we didn’t take a lot of family vacations. There just wasn’t room in the budget for it. My parents took me on day trips to local theme parks when I was younger, but past 13, I think we took 2 week-long vacations together.
Instead, they preferred to spend their time off in a low-key way. Sometimes they worked on the house, other times they sat around and relaxed. Most of their time was spent reading, and family trips to the library were the norm on the weekends.
I know, it doesn’t sound very exciting, but when it’s what you have, you make the best of it.
As a result, I’m perfectly fine finding free ways to entertain myself. Whether that be getting lost in a new book, learning a new skill, improving upon existing skills, taking a walk, spending time with loved ones, or watching videos, I’m content.
There’s a lot of joy to be found in life, and it doesn’t have to come with a price tag.
Lesson #4) Debt is Disastrous
This was one of the harder lessons I learned from the sidelines. Money was usually always tight. When something major went wrong with the house, there was a lot of tension and stress because my parents didn’t have enough saved up to cover a repair.
That typically led to putting it on the credit card.
I learned two things from this – an emergency fund is extremely valuable to have, and credit card debt should be avoided at all costs.
I stress about money enough as it is, I don’t need to add the stress of being in consumer debt to it. Besides, no material item seems worth it!
How did I apply this lesson? When I started working, my first goal was to save. I managed to get $3,000 in my bank account working part-time (~$8/hr) for about three years, and I held onto it rather tightly.
Within a year of graduating college, I realized I needed to get my student loan debt paid off so I could focus on other savings goals.
I’m extremely grateful I saw the side effects debt can have first-hand. My parents told me how to use credit responsibly, but seeing it had a much bigger impact.
Lesson #5) Time is More Important than Gifts
Around age 10, I realized how my parents were affording my birthday and Christmas presents. You guessed it, credit cards.
This made me feel incredibly guilty. I wanted to see my parents happy. I know they wanted to see me happy, but it tore me apart inside. They didn’t exactly enjoy their jobs, and knowing they had to work more to afford these things for me was upsetting.
Within the past few years, I’ve managed to get them to cut down on their gift-giving. When my parents moved away and visited for the holidays, I told them that was enough of a present, and thankfully they agreed!
Spending time and making memories with friends and family typically beats the heck out of anything money can buy.
Lesson #6) Don’t Ever Stop Working Hard
Even if my parents weren’t overjoyed with their careers, they weren’t slackers. I never saw them call out unless they were truly sick, and my dad regularly worked overtime (and on the side).
They set an amazing example as far as work ethic goes, and I’m grateful because it seems like an awful lot of my peers get a bad reputation for not taking work seriously enough.
Whether I was working part-time in retail, or full-time in an office, I never took advantage of my coworkers or my sick time. My bosses always appreciated the effort I put into my work, and having that discipline and drive is half of what made self-employment possible for me.
_________________
I’ve learned so much about finances from my parents, and I try to return the favor by being a good example for them. They’re not perfect (nor am I!), but I’ve been able to help them budget and get on track to pay their debt off. Considering how much they’ve helped me, it’s the least I can do!
What financial lessons have you learned from your parents? Did you follow in their footsteps, or learn what NOT to do from them? Have you taught them any lessons?
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My parents were an interesting mix as well. My dad was definitely the money tracker, and my mom was the spender. Not that he didn’t, I never saw him telling her to hold back at all. Luckily we were okay!
Man, I wish I’d learned these lessons from my parents!! Hopefully, I’ll be the source of the lessons for my kids one day (especially the debt part)!
I learned many of the same things from my parents, and I try to emulate their financial savvy as an adult. They have always had their priorities in line and spent their money in pursuit of those priorities, which is something I really admire.
It sounds like your parents taught you some really important stuff, Erin. Those are things a lot of people don’t learn until they’re much older! One of the most important things my Dad taught me about money is don’t take it for granted. It won’t be around when you need it if you do, and money (no matter how small) can be reinvested for bigger gains.
People think I’m frugal…but my parents put me to shame. I’ve learned my frugal habits from them, as well as their wok ethic. Another important lesson from my dad was to invest my money which he introduced me to at a young age.
My parents were an interesting mix as well, though they both tended towards the debt side – which was likely the biggest lesson I learned from them. I unfortunately repeated that mistake but have thankfully been able to use the lessons I learned to help them and other family members.
My parents were very opposed to debt. I won’t say they did everything right, who does? But by never really going into debt other than for a mortgage and so my Dad could start a business, they never bought things they couldn’t pay for, including cars. What debt they did have was paid off years ago and now they are set up nicely for retirement. It’s nice to know that they don’t have to worry about money as they get older.
On the other side, my in-laws are a hot mess and we’ve already had to help them out a few times. It’s easy to say you’ll cut them off, but doing it is another story. The stress of how much worse it might be later down the road is painful. I guess we’ve learned lots from both sides in very different ways!
Don’t ever stop working hard is something that my parents really engrained in me too. When they first got married, my Mom had just finished up school and my Dad was still finishing undergrad. They were young, in love, and broke! :) My Mom paid for my Dad’s undergrad and graduate school, and they found inexpensive ways to have fun during those first few tough financial years of marriage. Now I would consider them very successful, they have always worked hard to make their goals happen!!
Mark@BareBudgetGuy Sometimes the saver/spender dynamic helps balance things out a bit!
Financegirl I’m sure you will be – if anything, your blog is full of great lessons for them to learn from. ;)
Ali_AnythingYouWant It’s great you had such good role models growing up!
sunburntsaver That’s a valuable lesson as well. I kind of learned that through money being tight. I like the last point, though – so many people hold back from investing because they don’t think they have enough!
Andrew LivingRichCheaply That’s awesome! I really wish I had learned some investing lessons from my parents, but unfortunately, that wasn’t one of their priorities. I guess I’ve realized the importance of saving for retirement early on from that as well.
FrugalRules That’s great! I always enjoy helping family and friends if they have any questions or concerns, too. There’s no reason not to pass the lessons we’ve learned onto others.
Eyesonthedollar That is quite the mix! It’s interesting to see the differences from family to family. My mom has two sisters and their money management techniques are fairly different, even though I know my grandma and grandpa were both pretty darn responsible with their finances.
Christina@EmbracingSimple That’s great! I imagine you learned a lot from them and I’m sure many millennials can relate to being in that situation. A lot of my friends are there! It always helps to work as a team and be on the same page.
Strongly agree with #4. Debt is disastrous on so many levels. Whether it’s the monthly payments, the interest expense, the impact on your savings, etc. I try to avoid debt at all costs. For the past 5 years, my wife and I have been able to limit ourselves to mortgage debt only.
Financial Tour Guide Yep, all those are good reasons to avoid consumer debt. Great job at staying debt free for the past five years outside of your mortgage!
To be honest my parents split up when I was 10. My mother worked her tail off to make sure my siblings and I were taken care of. She also set up accounts for us at the Credit Union when we were kids as well. My dad has times where he worked and didn’t work. Once he got a job it was very low paying. I’m the opposite of him. I’m working and doing side hustles. When I decide to have children I don’t want them to have to go through what I went to.
Jason @ The Butler Journal I find that to be a really powerful motivator, too. We can definitely learn what path we DON’T want to take from what we experienced in childhood. That’s why I have such an adversity to consumer debt. I don’t plan on having kids, but if I did, I certainly wouldn’t want them to experience the stress from lack of money that I did.
Everything I’ve learned from my parents about money, unfortunately, has fallen on the “what not to do” side of things. My experiences were very similar and my mother incurred a lot of debt as a single mom to lavish me with a bunch of things I really didn’t need.
lifeandabudget Ack. My mom just asked me what I wanted for the holidays, and I had to firmly tell her not to buy me anything. Old habits die hard. I appreciate everything my parents have done for me, but I hate that they felt the need to ‘spoil’ me growing up.