Welcome back for Part 2 of our 2 Part series on how your Money Habits can be affected by your Upbringing. In Part 1 we talked about how the fact that your parents spoiled you rotten (or never spoiled you at all) could affect the decisions you’re making now when it comes to money and your finances. Today were going to be doing and talking about more of the same so, if you’re ready for little financial therapy, let’s get started. Enjoy.
- Mom and dad never gave you any Lessons about Money. This is probably the most common problem and usually it’s due to the simple perpetuation of your parent’s own lack of a financial education. Unfortunately, when it comes to money it’s almost as big a taboo to talk about as sex and, as far as women are concerned, being kept in the dark about household finances has been a custom for generations. This has led to generations of parents avoiding talk about money matters either out of sheer ignorance or because they prefer not to.
This leads of course to a new generation of people who aren’t educated when it comes to finances and who tend to either under save, overspend, avoid investing or avoid financial planning completely. The reason is that the new generation has no foundation of knowledge about money management and are left to basically learn on their own and learn from their mistakes.
The best way to deal with this of course is to educate yourself, something that is much easier in today’s Internet age. Hiring and working with a professional and experienced financial advisor is also a great idea and can help you either get back on your financial track or get started down the right path financially. If you can get a referral from a family member or friend to someone who is qualified and that you trust all the better. Also, if you’re keen on making sure that your kids don’t end up in the same situation, get them involved in financial decisions (when appropriate) and help to educate them while they are still young.
- Your mother and father lived “high on the hog”. Perhaps because they were deprived as kids and were compensating for that fact or maybe they just felt like they had to “keep up with the Joneses”, your parents spoiled themselves on a regular and ongoing basis.
The effect that this type of behavior can have on you as their adult child is that you live way beyond your means. Even though most people will tell you that they “would hate to turn out like their parents” the fact is that they usually do and, if you’ve grown up in a home where your folks “lived at large” it can make it particularly challenging for you, or anyone else, to adapt to a modest lifestyle.
- Your mother was completely dependent on your father. No offense to your mom (she’s probably a very sweet lady) but, if she was completely taken care of by your dad and never had to worry about money at all you yourself could be expecting the same. Subconsciously you might be thinking “why should I struggle if mom didn’t have to struggle?” This type of thinking usually results in irresponsible behavior and procrastination with money because you are assuming that someone else will (eventually) come in and “rescue” you financially.
If this is you then you definitely need to get back to reality, stop waiting to be saved and, at least as far as your finances are concerned, save yourself. Financial independence can be incredibly satisfying and also inspirational to your own children at the same time.
- Your dad and mom were divorced. Unfortunately, many families today are “broken” families and divorce issues can lead to many different types of psychologically-based financial issues. In many cases what this does is cause you to become more determined to live “happily ever after” and, while this isn’t particularly a negative thing, it can also lead to you to rush into things like getting married, buying a house and starting a family much too early.
Of course if you rush into these things you may find that you are suddenly living way beyond your means and in debt up to your eyeballs, a situation that can bring you full circle and lead you to divorce as well.
The solution is to do your very best to be financially independent whether you are married or not. Maintaining separate bank accounts for spending, investing and saving is a good idea and, while you’re at it, contributing to your own IRA or 401(k) as well.
Well, that wraps up our 2 Part financial therapy session. If you’ve seen a bit of yourself in any of our examples, and if they touched a little too close to home, we apologize but we hope that it has made a positive impact. More than likely your parents were doing the best they could and always wanted the best for you. In any case, it’s never too late to start new financial habits and not make the same mistakes with your own children. If you have any questions or would like some advice about your own personal finances, please let us know and we’ll get back to you ASAP with answers, advice and solutions.