How your Upbringing Affects your Money Habits – Part 1

Something that most people don’t realize is that how they were raised as children can actually have a big impact on how they make decisions as adults, especially with money. Sometimes the decisions, due to the way mom and dad taught us, are excellent and, sometimes, they are not. That’s not to say that a person can just blame their parents for their problems and their mismanagement of money but, at the root of most adult financial problems, are the lessons that they learned as children from their mother and father.

With that in mind we put together a list of relatively common parenting behaviors that, in most cases, can have a negative influence and how a person handles money and their finances as adults. We guarantee that it will cost you a heck of a lot less than therapy, so enjoy.

  • Your mom and dad were extremely Frugal. It might’ve been that they were keeping a tight budget, or that they were trying to teach you a lesson. It might also been that they decided to put themselves first financially or just didn’t have a whole lot of extra money. Whatever the reason, your mom and dad seemed to completely deny you of all the things you wanted when you are a child.

If this was your situation as a child, as an adult you will tend to overspend in order to compensate. Indeed, many children that feel they were deprived when they were younger will binge spend to make up for. Just as we’ve heard about the kid who rebelled against their strict parents and went crazy in college, acting out with your money because of your parent’s frugal ways is not uncommon. Your best bet in this case is to not let the cycle continue with your kids and make sure that, when making money decisions that affect them, you let them in on the reasoning so that they can better understand and not feel resentful when they become adults.

  • Mom and dad Spoiled you rotten. Possibly because they were deprived when they were children, your parents overspent like crazy on you and you grew up not wanting for anything whatsoever.

The influence that this has on your life now is that you may feel entitled to a luxurious lifestyle. Many children who are spoiled grow up to expect that they will, and should, get whatever they want. The problem of course is that they might not have the income to support the lavish lifestyle that their parents afforded them and, in order to make up for it, put themselves into deep debt.

The solution in this case is to realize that having a lot of “stuff” is no substitute for financial freedom and, if you want to avoid going into debt over your head, do your best to live modestly and put your money towards more important goals like retirement savings, purchasing a home or even starting a business.

  • Your folks were very Charitable. If your parents grew up extremely poor or witnessed some kind of trauma as children, it’s possible that as adults they chose to invest their money in causes and organizations that they felt a great affinity for.

While this might not sound “negative” the fact is that even though their hearts were in the right place (and yours might be also) giving away too much of your money due to guilt or obligation can also have a detrimental effect on your finances. Fact is, if you feel obligated to match your parents generosity and can’t say “no” when charitable causes, calling, it could lead to saying “yes” much too often and donating much more money than you can afford to pay.

The solution in this case is to step back, take a look at the charitable causes that you are contributing to and decide which of them really is worth your charitable donations and which is not. Remember that it is not your duty or your responsibility to take care of everyone and, indeed, your real responsibility is to make sure you take care of yourself and your family. When you have a little extra money, then you can take care of others.

Hopefully these first 3 parenting behaviors didn’t blow your mind too much or setback your therapy by too many years. In all seriousness however they are very important to know, especially if you are having financial problems as an adult, and hopefully have given you some insight into what’s causing your erratic financial behavior. If you have questions about personal finances of any kind, please let us know and we’ll get back to you ASAP. Make sure to come back and join us very soon for Part 2. See you then.

One Response to “How your Upbringing Affects your Money Habits – Part 1”

  1. canadianbudgetbinder November 17, 2013 at 5:47 pm #

    I agree that the way a child was brought up and taught about money is potentially the way they will manage money OR they will do the total opposite. I am frugal like my parents are although I tend to save cash to pay for big purchases. I have a friend whose parents had no money at all and worked like crazy in school to get a good education and job so he didn’t have live pay to pay like his parents. Our experiences in life guide us and depending on our motivation and drive it will lead us down the path that makes us the happiest and if it doesn’t that means we need to try harder.