The Bad Money Lessons My Parents Taught Me

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The Bad Money Lessons My Parents Taught MeToday, one writer shares the bad money lessons she learned from her parents, from not stressing the need to get credit cards paid off, to bad spending habits–and how she’ll teach her daughter differently.

I punched in my pin number and pressed “account balance.” In the seconds it took for the machine to spit out the receipt, my stomach churned with anxiety.

I was a junior in college, presenting a paper at a conference in Utah. A huge accomplishment, but I wasn’t proud. I was 1,000 miles from home, and I had only $10 in my checking account.

How was I supposed to eat?

Moments before I found the ATM, I had called my parents for money, something I rarely did. My dad had just lost his job. My sister had called me the week before to tell me that the RV my parents loved had been repossessed, and creditors were calling. Still, they sent the money.

My parents taught me many good lessons–the value of education, the love of books and the trick to folding sheets with fitted corners. But when it came to money, my parents’ lessons were lacking, and I’m still trying to unlearn bad habits that have led to over-spending and under-budgeting.

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And now, it’s not just about me. I have a young daughter, and I want her to grow up with power over her finances, and not the other way around. As my husband and I begin to plan her financial education, we are focusing on four key areas that are my greatest financial weaknesses.

I hope that they will be her strengths.

Bad Habit #1: Using Your Money While You Have It

Both my parents grew up with a poverty mentality that perpetuated a feast-or-famine attitude toward spending. When your paycheck comes, you spend. When the end of the month comes, you starve. When I married and saw my husband set aside money every month for things like furniture, appliances, auto repairs and even smaller things like haircuts, I was floored. Now, I try to live from the axiom that money stays around as long as you save it.

How we teach it: To teach my daughter to be wise with her finances, we’ve started a savings account for her, and as she grows we’ll give her a specific amount that she’ll be allowed to spend each month within it. We’ve set aside a section of our budget called “Ellis” (our daughter’s name) and as soon as she starts asking for clothes and candy, we will give her a checking account and help her learn to use it. By the time she’s nine, we plan to put her in charge of her own budget. If I buy her shoes or clothes, she’ll have to pay me back.

RELATED: Getting Credit Cards Paid Off – Everything You Need to Know

Bad Habit #2: Believing That No Credit Is Good Credit

My parents have had problems with credit cards, and raised us to believe that all debt was bad. Consequently, when I went to rent an apartment after college, my name couldn’t be on the lease because I had no credit history. Debt is bad when you let it accumulate, but using a credit card and paying off the balance every month is a smart way to built good credit, so when it comes time to rent or own, you won’t be at the mercy of your roommates.

How we teach it: My husband’s parents helped him sign up for a credit card at a young age, which he used to purchase things he needed and paid off every month. We plan to sit down with our daughter each month and show her what purchases we’ve made on our cards, and how we pay them off every month. Our goal is to help her learn how to wisely handle credit, so she won’t misuse it later in life.

Bad Habit #3: Hiding Your Flaws

In college, I lived in a perpetual state of uncertainty. Because my parents’ finances were insecure, I never knew if the money would be there to pay for the next semester. I worked hard to bridge the financial gaps, taking a second job when I could. Finally, my junior year, I walked into the financial aid office and asked for help. The counselors were kind and non-judgmental. I’d been warned by my parents not to discuss finances with the school (or anyone), but talking about it was the best thing I could have done. I learned about additional loans I could take out, and was recommended for a summer job on campus, which helped me take charge of my school payments.

How we teach it: I now love hearing how people save money, as well as their investment strategies and tips and tricks for saving. Talking about money doesn’t have to be shameful. In fact, it’s often very helpful. Hiding your problems doesn’t make them go away. I never want my daughter to think she has to hide her flaws, whether a bad credit score or something else. Honesty is best taught through example: I plan on discussing money openly with our daughter, and including her in our budget decisions.

RELATED: Top Mistakes When Getting Credit Cards Paid Off

Bad Habit #4: Buying Now, Paying Later

Right after I graduated college, I wanted to buy a car. My husband (then my fiancé) told me to wait. “Don’t go into debt for a depreciating asset,” he said. “We can make this work.” And we did. We were a one-car family for two years as we saved for a car. To this day, when it comes to furniture and appliances and vacations, we set aside a little every month, so that when it comes time for a big purchase, we’re prepared.

How we teach it: My husband learned this lesson as a child: “If you don’t have money, you don’t get it.” Meaning, you don’t buy that thing you really want just because you want it. By putting our daughter in charge of her finances early on, we hope to instill this virtue in her by letting her see firsthand the true value of money. Outside of gifts, necessities and the occasional treat (we’re suckers), if our daughter doesn’t have the money to buy something she wants, then she simply won’t be able to get it.

Unlearning the bad money lessons my parents taught me hasn’t been easy—I have to constantly rethink purchases and financial decisions, but the good news is, watching my husband, seeing us budget and hearing our plan for their granddaughter has inspired my parents to start saving more and spending less, too.

Lyz Lenz, featured above with her daughter Ellis, is a writer and blogger. She lives in Iowa with her frugal husband who likes to wash and reuse tinfoil. She lives online at LyzLenz.com.

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  • JRink

    What an awesome article. I loved the practical approach to the subject. Thanks, Lyz!

    • lyzl

      It has been a big problem in my adult life and I’m so lucky that I have a husband who’s money smart for three! Thanks for your comment!

  • http://www.makingsenseofcents.com/ Michelle

    I learned a lot from the good money habits from my dad and the bad habits of my mom. Lots to learn!

    • lyzl

      That’s awesome. I know my husband did too. I think all parents do the best they can. I know I’ll probably teach my daughter some regrettable habits…like oversharing :)

  • http://www.topazhorizon.com Topaz Horizon

    I think we may be sisters because that’s exactly how my parents treated money, too! It took a long time to unlearn the bad money habits. And I credit my husband for that! He was raised by a bank CEO dad and a very frugal mom so he knew a lot about having money but saving and investing instead of spending it all. I’ve been married now for 5 years and I’m happy to report that I have good money habits now. Not great (I still don’t know how to invest and I like a shopping spree now and then) but not bad at all. I’m debt-free! And that’s a good sign of healthy money management, right?