We learn a lot of our personal finance skills from our parents. From our first few dollars of allowance to the budget we’re given for prom; from the quarter the tooth-fairy gives us (I hear it’s a five-spot nowadays) to the birthday money that arrives in the mail - which often passes our hands only briefly on the way to our baby saving account - our foundation of money-management skills is laid early on.
There are lessons we learn directly – like while shopping sales at the big department stores as a child, my mom would sometimes agree to buy me something only if I could correctly calculate the sales price at 20% off. She often turned down my requests for the “latest and greatest” trendy item, and pushed me to choose a career that would set me up for stable income. When I asked my parents why we didn’t live in the slightly nicer neighborhood adjacent to ours, my parents responded, simply: “we could have!" And when I had my first job and began stock-piling new CD’s and American Eagle bags in my room, justifying the purchases by assuring her “it was only $20,” Mom would gently remind me: “$20 five times is a hundred.”
The bigger lessons, though, were the ones that went unsaid. There were the nights, once a month, when my parents would sit down at the kitchen table together, after dinner, and go over their bills, delegating responsibility like Fantasy football picks. My parents rarely bought themselves new clothing, but remodeled the kitchen at least three times in the last twenty years. I watched as my mom stressed over several lay-offs and career changes and I watched as my dad quietly brought home the bacon and dutifully allocated it to the home and the family, rather than buying himself one of the 1960’s muscle cars he yearns to own.
From them, I learned to choose a career wisely and work hard. I learned to make sacrifices to meet my goals. I learned that, if you avoid impulse purchases, chances are you will forget all about it in a week. I learned that I want financial stability – and the ability to pay my monthly bills with ease – more than I want a car or a pair of Jimmy Choos or a ping pong table.
What did your parents teach you?