In a perfect world, your parents always paid their bills cheerfully and on time, never argued about money, and opened an IRA for you on your sixteenth birthday to teach you the wonders of compound interest.
Does that scenario resemble your childhood? Not ours, either.
We Enter Adulthood With Some Kind of “Money Baggage”
Money baggage can be thought of as an unconscious set of financial beliefs, attitudes, and behaviors that develop as a result of the way we saw money treated in our families while growing up. How heavy is your money baggage? Whether you carry a tiny attaché case of quirks or a full set of finance-phobic steamer trunks, it’s a good idea to become conscious of how your early experiences with money influence you today.
Identify Underlying Beliefs
To start, try to think of a money philosophy or saying that represents each of your parents. This could be something that you heard them repeat a lot, like “money doesn’t matter as long as you love your work” or “no one can become rich without taking advantage of others.” Chances are that even if you don’t agree with this belief, it is still a voice that pops up in your head more often than you’d like.
Connect the Emotions
Even as tiny infants, we are attuned to the emotions of our caregivers. When you were younger, what was the emotional climate around money? Was there tension or fighting when bills arrived? Was money treated with contempt, like it was something dirty? Annette Lieberman, author of The Money Mirror, recommends trying to think of your first memory of money. Your first money memory has special emotional significance. Remembering the time when you realized your best friend’s family was rich or when you were yelled at for asking how much your parents earned can bring all of those feelings right back to you.
Examine Your Role Models
You’ve heard the saying, “Do as I say, not as I do,” right? In any household, there are normal activities of money management. How did you see your parents going about these tasks? Was it something routine or was budgeting only done when money was tight? Who did which task, mom or dad? Research by the APLUS project out of the University of Arizona shows that your parents’ financial behavior is one of the biggest influences on how you will approach money as an adult. The roles and responsibilities your parents took on provided a template that you will either repeat (or reject) in your own life.
Whether you’ve got baggage or not, we’ve all got to get on the train. Don’t worry: LearnVest is here to help you get through it! Stay tuned for an upcoming article on how to jettison that spare luggage once and for all.