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.
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.
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.’
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?