Parents have a greater influence on children as compared to anyone else. Children pick up verbal
and non-verbal cues between parents. You know the phrase ‘monkey see, monkey do’? that’s how
it works with children. They learn more from what their parents are doing than from what
their parents tell them to do. This is the case with the financial situation of their household.
Unfortunately, there is a lot of financial illiteracy amongst the population.
When children see how bad their parents are with money,
they assume this is the way money works in the real world.
As an adult, you may feel like many of your parents’ bad financial decisions
have rubbed off on you. If this is the case,
it is not too late to learn from their mistakes and grow your own bank account.
In today’s video, I’ll be discussing some common parenting behaviours
that could have possibly negatively influenced your money habits.
6 Your parents spoiled you as a kid
Every parent wants to spoil their child if they have the opportunity.
A lot of the time, this is the case because the parents themselves didn’t have much growing up
and wish their child the best lifestyle. The issue with this is some parents go overboard
and this results in children having an entitled mind-set.
Spoiled children become excessively needy and have a strong dependency on others.
On top of this, they don’t understand the value of money. They want the best of everything even
if they don’t have the finances for it and this results in them making horrible financial
decisions that could lead to bankruptcy. In other words, parents who spoil their children
to this point, paralyse their children; they do more harm than good in this sort of parenting.
If you feel as though this was your upbringing, fear not. The first step to changing your
mentality is self-awareness. You also need to let go of the sense of entitlement. Try and challenge
yourself and see what it’s like to have a modest lifestyle. Save up your money for important goals
such as buying a house, your children’s education, and of course a comfortable retired life.
When you’re earning money and spending it wisely, you understand its value.
5 You were never taught about money
Many households don’t openly talk about money. It’s a taboo.
Schools don’t teach financial literacy even though it’s a very important life skill.
When you have no background knowledge on finances,
it becomes very difficult to manage it. You don’t know anything other than earn and spend.
You may hear the word ‘invest’ thrown around but you don’t actually know what to do about it.
The solution to this is financial education. With so much freely available content online, you can
take time to learn everything you need from A-Z about finances. You can also get in touch with a
professional, like a financial advisor, who could look at your finances and guide you through it.
If you are blessed with children make sure you talk to them about saving and investing
and even involve them in your financial planning activities. Parents and carers have the most
important influence on how children deal with money in adult life. Teaching children about
money helps them manage their own finances as they get older. This equips them with the
knowledge and skills they need to manage their own money effectively now and in the future.
Encourage them and talk to them about the importance of investing and the negative
effects of living beyond their means. It’s crucial to pass this information to your kids
and make sure you help them understand the need of being careful with money
so they can learn the benefits of saving and not feel resentful.
Generational wealth is built through knowledge. If you have children, ensure they learn about
finances too. Give them money from an early age, make them earn money through chores,
and then see how they handle it. Don’t let your children live in ignorance of finances.
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Now let’s continue.
4 You had extremely charitable parents
Charity begins at home. In this context, literary. If you’ve grown up seeing your parents give all
their money to those in needs, you might have learnt to do the same. Don’t get me wrong,
this is a very noble thing. The problem rises, however, when you keep giving without paying
yourself first. If you give to charity because you feel obligated to do so, you might as well
keep that money in your pocket. Research suggests that giving because you feel like you have to,
makes you less compassionate and more disappointed over the years.
Giving your money should feel natural; give to charity because you want to.
When money comes into your bank account, ensure you pay yourself first. Put the money in your
savings account, set aside the money as per your monthly budget, then think about charity. Look at
charities you truly align with and give them the money out of the goodness of your heart.
3 You had very frugal parents
Your parents may have denied you the things you wanted as a child. This could have been
because of a tight budget, or because they were inconsiderate and put themselves first.
Either way, this could have rubbed off on you making you frugal as well.
On top of this, you may be filled with thoughts of unworthiness.
Frugal parents come from all sorts of backgrounds. Some were raised in typical families with
traditional buying and spending habits and came to embrace frugality much later in life.
Others were raised by parents or grandparents who made simplicity part of everyday life.
Such an upbringing often leads to the children overspending as a way to compensate for what they
didn’t have. This is something that usually comes about as a result of feeling deprived as a kid.
It’s similar to a household where the parents were super strict and therefore kids end up rebelling.
You might want to find out the reasons behind your parents frugality.
Maybe once you know what went on you can get a better understanding.
Either way, the best come back to such a childhood wouldn’t be compensation but rather financial
prosperity. Try as much as you can to save more and if it’s a bit difficult try setting up an
automatic account. You don’t have to overspend to make up for what you didn’t get growing up.
2 Your parents relied on others financially
If you saw your parents turning to others for money, you may have this mindset inculcated
into you. This could be because they didn’t have much nor the financial literacy and so,
had to ask others for loans. You do not need to follow their steps in this matter.
Research shows that financial dependency is associated with lower income,
and lower levels of education. Individuals with financial dependence are also significantly more
likely to have other disordered behaviours such as compulsive shopping and hoarding.
Learn financial literacy and also wake up to the reality that depending on others
financially is detrimental. You will never have your own money to do away
with – loaning money from others will always have strings attached.
1 Your parents split up
Living in a household where your parents divorced is an unfortunate reality
that so many people go through. This usually leads to a number of psychological issues in children
including those that lead to poor financial habits.
As you go out into the world you tell yourself you don’t want to end up like your folks
and so you begin your journey of looking for your happily ever after.
This isn’t necessarily a bad thing but it can lead to rushing into settling down,
buying a house and starting a family when you’re not entirely ready or for all the wrong reasons.
You can easily end up living beyond what you can afford. Incurring debt, being financially
stressed and maybe even divorce. The one thing you were trying to avoid happens to you.
Financial stress is one of the leading causes of divorce.
Financial problems and stress can impact your marriage in many different ways.
Somehow when you mix marriage and finance it’s a recipe for stress. And research
shows that couples who are in low-income situations are more likely to be affected.
Even with the best budgeting, financial problems still arise. Talk openly,
prioritise your spending, set goals and accept help. This will help your
marriage and finances in a way that pushes away the thoughts of divorce.
In a nutshell. Financial stress is one of the leading causes of divorce. If the main
breadwinner of the family was bad with money, you may have witnessed a lot of arguments between your
parents. This is an experience you can learn from. Once again, the answer is financial literacy.
Regardless of who is the breadwinner of your family, having financial literacy benefits your
immensely. You can guide your partner through the finances if they are uneducated on this matter.
Even with the best budgeting, financial problems will arise.
Ensuring you have financial literacy will help you steer through the tough times.
Kids learn more through what they see than what you tell them. Experiences teach you and your
children. You should make sure you have a good leg to stand on when it comes to financial literacy.
Openly talk to your partner and your children about money.
This ranges from your salary to what stocks you’ve invested in.
Open conversations about money is a sure-fired way to grow your generational wealth.
If your children know from day one how money works,
they will walk into the world confidently and self-assured.
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Until next time, take care!