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Money Lessons I Did and Didn’t Learn as a Kid

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Hey there, Picky people! Today we have a fan-tasmic guest blog from my pal Dan at Pennies and Dollars.
Dan Palmer aims to take a holistic approach to personal finance by blogging about everything from the underlying ‘why’ of personal finance, the every-day nitty-gritty hacks of frugal living, and the ‘how’ of investing and growing your wealth. Find out more at penniesanddollars.com.
Today Dan is writing about a pretty cool topic: what money lessons he didn’t learn as a kid. Chime in with your own experience in the comments!
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Education starts when you’re born, and money education is no different. A lot of my perspective towards money and what I know about money I learned as a kid. Sure, I’ve refined and changed some of my perspective as I’ve moved into adulthood, yet my upbringing will always weigh in on my money attitude.

Money Has Value

Maybe you read that heading and are thinking, “No sh*t, money has value. Everybody knows money has value.” And yet if you watch how many people spend money and talk about money, it’s pretty obvious that money doesn’t have value to them.

Or at least they don’t understand money’s value. Saying things like, “it’s just $10” to justify an impulse buy they’ll really never use. Or rationalizing that saving $50 isn’t enough to make a difference, so they might as well spend it and have a good time. Too often, it seems money has no value until there’s a comma in the number.

Thanks primarily to my mom, I was taught otherwise. My mom’s family immigrated to Canada, so money was tight when she was growing up. And even though our family never wanted for anything, the frugal mentality carried forward. Phrases like ‘pennies make dollars’ or ‘good to the last penny’ were common in our house.

And it wasn’t just the things that were said either.

It was obvious that my parents were conscious of how they spent their money and watched their pennies. Impulse purchases, especially when my mom was present, shocked us as kids because they were so rare. And you could tell that even those impulse purchases were made only after careful on-the-spot deliberation. There was usually a good reason for making the purchase.




Money Doesn’t Have Unlimited Value

Of course, like anything in life, you can value money to an unhealthy extreme. And this is where my dad balanced my mom out. My dad would occasionally remind my mom that it was okay to splurge every once in a while.

Of course, money has its value, but its value is limited.

If something is worth the price to you and you can afford to pay the price, there’s nothing wrong with parting with the money. To this day, I’m cautious with the phrase ‘money is meant to be spent,’ but sometimes it needs to be said.

Of course, all your money isn’t meant to be spent now, but there’s nothing wrong with enjoying life in the present and saving for the future.

Money is Something You Earn

This is something I only partly learned as a kid. We would get an allowance each week, and my parents would always remind us that the allowance was in exchange for doing our chores. So in theory, if we didn’t do our chores, we didn’t get paid.

Yet, I’m pretty sure there was never a time we didn’t get paid. And there were definitely times we didn’t do all our chores (sometimes for good reason, sometimes not). But I suppose I never so grossly neglected them that I was ‘fired’ from my job. So I half learned this lesson.

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What I had to learn on my own is that, unlike my chores, a job isn’t just handed to you. Often you have to hustle just to get a job. It’s probably not fair to blame my chores for this, but I went through college expecting that a job would land on my lap when I graduated. Sure I sent out applications, but I didn’t network for contacts and opportunities.

I never took an internship when I was in college. I didn’t look for ways to make myself marketable. Like I say, there are many more reasons for my lack of effort in job search than just my chores as a kid. Yet, I wonder how my attitude would have been different if the onus was on me to search out money-making opportunities as a kid–either in the house or out.




Money is Something You Save

With what I’ve already said about our frugal lifestyle, you probably won’t be surprised that we were encouraged to save money. Each week when we were given our allowance, we were encouraged to save some or all of it. We’d give what we wanted to save back to my parents and they would write it down and keep track of the balance in a notebook.

Although my parents taught me the habit and the principle of saving, I could never figure out what exactly I was saving up for. There was no purpose to the savings. So by the time I got to high school, I gave up saving.

Since I didn’t see the point of saving, I spent each week’s allowance the week I got it. I suppose I still valued it, since I was still careful how I spent it. I’d make sure it lasted the entire week. But unless there was something in the near future to save up for, my allowance was gone by the weekend.

Fortunately, this phase was temporary. Once I became an adult and realized that there were things such as retirement, emergencies, and new cars to save for, the savings habits that I learned as a younger kid kicked back in.

Other Things I Had to Figure Out on My Own

I’m very grateful for the money lessons my parents did teach me, but there were a few things that I had to figure out on my own. I already mentioned hustling for a job and having goals to save towards. But I also never learned anything about budgeting or growing money.




Budgeting

To this day, I don’t know if my parents had a budget. I think they were just so frugal that they just didn’t need one. So when I stepped out on my own into the big world and suddenly had responsibilities of my own, I had no concept of what a budget was. However, I think because they had taught me the value of money, I didn’t have too hard of a time figuring out how to make a budget.

When I made my first budget, I didn’t even know it was called a budget. I just knew I was going to have certain expenses, and wanted to be sure I could pay for them all, so I jotted them all down on a spreadsheet and added them up. And I’m glad I did, because I wouldn’t have been able to pay for half of it.

Over time, that evolved into regular expense tracking and budgeting. And then I stumbled upon personal finance books and blogs and realized ‘oh, that thing I’m doing is called budgeting.’

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Growing Money

I learned the concept of earning interest, but that was the extent of what my parents taught me about investing. Which I find odd, since I know they have a significant amount of money invested.

I was 19 in 2008, and the news kept talking about the stock market crash. So I did a lot of reading on how the stock market and investing worked, and I started getting the feeling that this was a great time to get into the stock market. Since I knew my parents were invested in the market themselves, I mentioned that I was thinking about investing, to which my dad replied very affirmatively, ‘you really don’t want to get involved in the stock market.’

That comment still baffles me! But it sufficiently scared me away from the stock market… for a year.

Finally a year later at 20, I just did it myself. By no means was I perfect! I tried and failed at stock picking for 2 years (since it was the great bull market of 2009-2011, I at least didn’t lose money). But getting my toes in the water was important.

If it wasn’t for my initial failures I would have never figured out an investing style that works for me. Now I almost solely park money in index funds. I don’t time my investing. I could care less what the market is doing today, next week, or next month. And I have a nice passive income stream from the dividends of my non-retirement fund.

I Learned the Important Stuff as a Kid

Although my parents didn’t teach me everything about money, they did teach me to have a healthy attitude towards money. Between the two of them, they taught me to value and save money, but not hoard money. And with a firm foundation like that, learning the rest was a lot easier. And I guess in the end, I turned out alright. I also picked up a passion to help others learn how to budget, value and grow their money.

We want to know: What did you learn about money growing up? 



36 comments on “Money Lessons I Did and Didn’t Learn as a Kid

  1. Lots of lessons learned here! For me, my parents always said “debt is a way of life.” And now I know being debt-free is completely attainable and there is no reason you have to drag debt around with you for years. Great post!

    1. Girl, mine did too! My parents always told me “you’ll never be debt-free. You’ll always have debt.” I thought of debt as something that was paid off with life insurance (silly, I know).

  2. Awesome post Dan. I’m glad you have figured things out more than you had it figured out in the past!

    When I was younger, my parents and grandparents instilled the habit of saving for the future. We never really went out to eat, we constantly were searching for deals, and didn’t spend extravagant amounts of money on vacations.

    Being a natural saver has allowed me to build some wealth at 24, but it will take consistent saving to make me very wealthy. Thanks for the post Dan.

    1. I’m pretty jealous! I was the saver in a family of spenders, but I still was taught a few backwards spendy lessons like “Debt is normal.” (facepalm)

      Keep on keepin’ on with those awesome saving goals. 🙂

  3. One thing not mentioned is also giving money to charity. My folks were church goers and we all saved part of our allowances for offering and Mom was a true volunteer. She helped those who needed help and was very active in an organization called FISH. We were strictly middle class and had very few luxuries- 6 kids, modest home, 1 bathroom, 1 phone and 1 TV-but we all went to college and 5 graduated. I was always a saver- my 2 sisters not; my brothers were more frugal and yet we all were raised in the same household and house. I really think a lot depends upon personalty.

    1. I was thinking the same thing, Nan, about ‘giving’ not being mentioned. Though I’m not really religious, giving was instilled in me and I make it a point to ‘tithe’ 10% of my income to things important to me like food banks, rail trails and the arts. Though less important than the altruistic feelings I get, the end of the year tax deduction is a nice frugal bonus.

      1. I’ll try to touch on more giving-related topics! Truthfully I don’t give as much as I should, so I’m a little embarrassed about that. My plan is to give very actively during FIRE so we can stop being consumers and be producers.

    2. I agree; I think it comes down to who you are as a person. Your environment has a lot to do with it, but some people are naturally more thrifty. And your family is very impressive! I think giving to charity is especially important once you achieve FIRE in particular. It warms my heart to see people giving who are average joes. 🙂

  4. Unfortunately my parents did not teach me the value of money or investing, I had to learn it on my own. They weren’t necessarily big spenders, but that’s only because they didn’t make much. They grew up overseas in an environment where money needed to be spent immediately since you never knew what tomorrow might bring. Even after we moved to the states, their mindset didn’t change. Great outline on the importance of early money education!

    1. Ooooh, that’s a good point. Your culture and circumstances can change the way you think about money, too. As a kid we were pretty damn poor–my dad was in the Army and my mom stayed at home. Once my parents got careers in IT and accounting, they inflated their lifestyle instead of living at their previous level. I think that’s where a lot of their troubles came from and their “debt is normal” mindset.

  5. I still remember the first time I got to understand interest. My granddad had gifted my brother and I a chunk of money (don’t touch it till you’re 18 kind of thing) and I remember reading the bank statement when it came in.

    January had about $5 interest, February had around $4.80, and March had another $5.

    I remember being outraged! Why did they pay me less in February, how dare they! My brother and I took our bank statements to Dad and asked what went wrong, and who we talk to about our missing money. That’s when I learnt what interest was, how it worked, and that it was calculated daily, not monthly 🙂

    Although fun fact, apparently banks used to calculate it monthly based on however much was in your account on the last day of the month. Which lead to people having accounts in a few different banks and shuffling it back and forward to the ones with the best rates at the time! Sneaky sneaky

    1. Agh, damn sneaky banks. But that is so wonderful that your granddad gifted that to you kiddos! The best way to learn about money is to get your hands dirty. 🙂

  6. It was very clear now that I think about that my father knew a lot about money when I was a child, but he never instilled those money values onto me which makes him a not-so-great father. : / Long story beyond that there. My mother doesn’t think frugally, so that is no-go there as well and I was never taught money lessons from her as a child. When I got a big chunk o’ change when my birthday and Christmas came around, I liked hand-held video game systems, so I always spent all of my money on those and then, poof! It was all gone, haha. 🙂 I don’t think it was wasted money because it was a wonderful part of my childhood, but maybe I could have done something else with it? I will never know unless I go back in time.

    But I learned in my 20’s about frugality and saving money because I found that I never liked having a low amount of money in my bank account. So I discovered frugality, personal finance blogs, etc. and that’s how it all started. 🙂 I’m so thankful that I did or I would still be struggling with my money to this day. It has been a major blessing in my life. <3

    1. All riiiight! Way to go! Your environment/upbringing can still be overcome by your desire to learn and save. I really do think it depends on your personality.

  7. I was like you when I first started in the real world and needed to track my money. I didn’t think of it as creating a budget, but I had to do something to ensure I would be able to pay all my expenses each month while putting away money into savings. That has evolved into a pseudo budget today.

    My parents taught me that earning money takes hard work, and you need to save early and often. Two of the most valuable lessons that I took to heart when first starting out.

    1. I heard those lessons but I nonchalantly flicked them away and bought new shoes lol. Sometimes I suppose you just have you learn the hard way, huh?

  8. My parents were good with money, but my real lessons that have stayed with me came from my grandparents. They were frugal, generous people who saved and invested wisely for the long haul. They paid for their modest (1k square feet for four people) house in cash in the 1960’s, lived off one income (my grandfathers), and enjoyed the simpler things. My grandmother loved to spend time with friends, volunteer, go to church, and garden. My grandfather loved hunting, fishing, and road trips. They were both born in the 1930’s, and growing up in the shadow of the Great Depression and WW2 gave them a perspective that those of us who became adults during the Great Recession can appreciate.

    1. That is so neat! I love hearing about grandparents’ money lessons–life was so different in those days. In many ways it was simpler and easier not to spend money. I love getting back to basics and saving money with the simple things.

  9. There’s so much I wish I’d learned as a kid, like how interest works and that debt doesn’t have to be a way of life. I wish I’d chosen a state school to save money and started saving/investing immediately once earning money. But I’m thankful to have grown up fairly frugally, where my family didn’t splurge on a lot of things people think are necessary these days. I definitely hope to teach my kids how much better off they’ll be if they start investing at age 18 rather than, say, age 30! The difference between those numbers is insane!

    1. Oh gosh, I feel ya on choosing a more affordable college. I went to private school and regret the bill they sent us. Bravo for teaching your kids about money! I definitely want to be hands-on with our future kiddos so they understand money before they become adults.

  10. Well, I’m an old lady (60!) now, and my parents had me late in life, so they were old enough to remember the stock market crash when it happened. They were nine and eleven years old in 1929. The lesson they taught their kids? “The stock market is for fools.” And the other one, “Banks can fail.” So you can imagine the lessons I (didn’t) learn about investing. The depression taught them to live cheaply, at least.
    I grew up in a home where money was extremely tight, and so saving was not something that happened — it took all they made to cover expenses. We never got an allowance because they had no spare money to give us. The lessons I learned were pay your bills, always, and on time, and work out the rest of what you need with whatever you have left. It wasn’t the best money education, and I floundered as an adult, trying to figure out how to manage money.
    My husband and I are still recovering from our bad money habits, because my husband is just like me — a late-in-life child, born to parents who were fifteen and seventeen when the market crashed, and who also refused to invest ever after or truly trust banks. He was taught zero money management skills, not even “pay your bills first.” And, I blame ourselves for not taking time to study up on money management as adults, although, when we were starting out life together (during the recession with double-digit inflation, whee) there wasn’t a lot of information out there, like there is today. So I read all I can now and keep learning — and saving!

    1. I can definitely see how the Depression turned people away from banks. For decades my family REFUSED to use a bank and hid their cash in the rafters of their houses. It only took one house fire to convince them to go back to the bank. :/ That’s so hard because there are so many great Depression-era tips for saving money. But income-building strategies like investing probably seemed like horrendous ideas because of the risk. Good on you for educating yourself and finding a strategy that works for you. 🙂

  11. I find it so interesting that Mrs. Picky Pincher and several other people learned that “Debt is normal”. I certainly do not remember ever being taught that life lesson. Which is a good thing! However, I also was not ever directly taught very many lessons about money at all. I knew we had to be careful with it, and had to save it ( I grew up with a single mom who was a teacher–I believe that her only debt was a mortgage), but that was about it. Also that managing it was something that experts did and that was a little bit scary.

    With my own kids, I try to demystify money and teach them about budgeting and the fabulous benefits of starting to save and invest early. I’ve given the older one, now a sophomore in college, several books about personal finance for 20-somethings…I’m not sure that he’s read them though!

    1. Well it sounds like you got a pretty darn good head start, so I’m a little jealous! Ironically my mom was an accountant and I still had a backwards understanding of money. Oy. That’s fantastic! Just give your kiddos the tools to succeed and you’ll be surprised how far they can go. 🙂 It does suck that your parents were overly-cautious with money, but I suppose that’s better than a “spend ALL the monies!” type of approach.

  12. Great pieces of advice here! I think that the part about not knowing what you were saving for resonates the most with me. I know people who still think that saving means accumulating enough cash to buy their next car. I wonder how much better off the next generation would be if we instilled a habit of saving for early retirement from the very start.

    1. Ahhh, that would be the dream, eh? We plan to raise our kiddos to set them up for early retirement success. I hope that eventually this idea will catch on a lot more when people realize they don’t have to sit in a cubicle for 40 years if they don’t want to. 🙂

  13. I was lucky to grow up in a very financially-organized family.
    I still remember my parents organizing their income in envelopes (this was many moons ago!). Each envelope had something written on it: household expenses, bills, vacation and so on. It was simple, but effective! In a way, I also learned how to budget, without really knowing what budgeting even means 🙂

    1. I had to do the envelope system, too! When I was fresh out of college I had zero self-control and I blew all my money each month. I set up the envelope system and it helped me learn the difference between wants and needs. It’s awesome. 🙂

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