Money Handling Baggage
January 16th, 2008 by Ana
Looking back, I can see why I ended up in money troubles over the years. We learn how to handle money by watching our parents…and if they don’t teach us the proper way, we go out and learn from anyone who will. I know it’s not just me. Hubby said his father never taught him how to aggressively negotiate on vehicles when he was buying the truck (yes that one we are still paying on…that last debt that he drives) so he learned auto financing from the salesman!
My parents lived at the financial edge when I was growing up, and I remember eating government cheese and bread and that awful WIC cereal. I know they declared bankruptcy sometime when I was in grade school, although both parents refuse to talk about that now. Although I learned absolutely great ways to stretch every last dollar that comes in, I also learned some very bad money handling habits.
From my parents:
- “If you can afford to finance a newer car, that means you are doing better than when you have to pay cash for a beater.”
- “If it gets too bad, you can always declare bankruptcy.”
- “If you can get a credit card, that means you are doing good.”
- “Claim zero on your W-4 so you can get a tax refund.”
- “Spend your tax refund on yourself…something nice like a vacation.”
From my first husband:
- “Get as many credit cards as possible.”
- “If we are short money, we can get it from a payday loan place.”
- “If we need more than a payday loan place will give, a parent will cosign for a signature loan.”
- “We can always get a cash advance on the CCs.”
- “Don’t put your true income on the application…always round up so we can get more.”
Hubby got from his parents:
- “Finance the truck because you can earn more in a money market…you can beat the system that way.” (Doesn’t help when you don’t have said money market account at that time…)
- “Use vehicle financing and credit cards to build your credit.”
- “Talk to your brother about money; he used to work for the credit union and knows the best ways to handle money.” (This is the brother who is now getting large student loans!)
I’m sure there were more, but those are what I have uncovered so far. My parents weren’t really major bill jugglers, at least not to the extent my ex still is. But my mom still believes that being allowed to finance a nice car is a sign of how well she is doing and that approximately $60k in her retirement (in single stocks!) at age 58 is doing good.
Hubby doesn’t know as much about his parents’ finances as I have discovered about my mom’s, but he said his mother is now worried and that surprised and shocked him. All his life he has been convinced his dad has his financial act totally together, and hearing his mom worry may have been another wake-up on that trip to Florida.
Hubby resisted listening to the Dave Ramsey message for the good part of a year, because of his previous money handling “lessons” he got from his parents. I jumped right on it after the first five minutes, because I have had my financial teeth kicked in enough to know my way just didn’t work and I wanted so badly to learn how to really WIN with money. I just didn’t know how or who to listen to…until that drive home and that fateful billboard (which doesn’t seem to be there anymore).
Since I am feeling reflective about money management, I just have to ask: What lessons about money did you learn from your parents? Were they good or bad? If they were bad…where did you go to find better ways?
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January 16th, 2008 at 11:38 am
My parents have great financial skills and are millionaires on paper (once you take into account all assets, including all financial accounts and things that could bring them leverage, such as the sale of their house… which they purchased 30 years ago, has appreciated by 300,000 dollars and which they have not owed a penny on in 20 years)
But although they have great financial skills and certainly limited their children on the amount of money they would spend on a certain item, such as mom only paying so much for a pair of shoes, after that amount, you made up the difference, they really did not “TEACH” their children the same skills that they had.
From their 3 children, the oldest child is close to 750,000 dollars in debt. He and his family live a life with a sense of entitlement to everything the Jones’ have, even if they do not have the same amount of money.
The second oldest has no job, no savings, no debt, no pot to pee in. The middle child “borrows” money from the parents all the time for things. The parents want to stop lending him money, but he has some medical issues that he always says he needs the money for, and without these issues being taken care of, the middle child has a higher potential for death. The potential for guilt of “killing” the child keeps parents “loaning” money out, and the middle child knows it. The parents know that he knows it too…. but it is there all the same.
Then there is me. I have some small savings; I do have debt. Most of my debt came from life changes in which I was unprepared. I could have asked my parents for loans to cover those expenses and paid them back with no interest. However, I shudder at the thought of asking my parents for anything. I was always the child that did well at anything she did, so whether it is self imposed expectations or real expectations, I feel that my parents expect MORE from me than my siblings. I have a deep sense of wanting them to be PROUD of me and my accomplishments. I WANT to be the child they do not have to worry about because I am the child that can and will take care of myself. This does not come just from my immediate family; it comes from my extended family as well.
I know this goes into more than specific money lessons, but these things, I feel, affect personal financial situations and attitudes.
January 16th, 2008 at 8:42 pm
Interesting question.
Growing up I felt that I was in a middle class family and remained in a middle class family when I married. Although when we got married we really were not middle class, just spending as though we were. I did not really become money savy until I stopped working to raise my children. Then all the books came out, “so you want to live on one income” and “living frugally” -not the real titles just the ideas.
I didn’t get a chance to ask my Dad about finances because he passed away when I was in high school.
I did have a bank account and he would take me to the bank to so I could deposit any checks that I had.
My first job was after he passed away.
My mom tends not to buy much for herself therefore saving as much as she can.
Great question.
January 16th, 2008 at 10:04 pm
My parents had 5 children, I am the youngest. Dad was very conservative with money but this did not mean he made good financial decisions. They divorced when I was 17 and we lost the family home, and from then on I had to look after myself, went straight to working and bypassed college.Almost never called on them for loans of any kind & in fact gave my mother money to help pay her mortgage. The biggest driver for me was security - I wanted my own home that no one could take away from me. I also did not want to end up like either of them, so basically I decided early on to do the opposite of what they did moneywise and it’s worked. Some great financial decisions I’ve made and some not so great. But still now doing very well, married a guy that earned heaps of money but but had not alot to show for it except holidays in exotic locations - we very quickly worked thru that and now we are very focussed on building for our future. Funnily enough I am in the better financial position of all my siblings who had the benefit of college educations etc.
January 17th, 2008 at 2:27 pm
[…] poor money handling skills […]
January 18th, 2008 at 8:43 am
[…] I learned poor money handling skills from my parents […]
January 19th, 2008 at 6:41 am
My father hocked our family to the hilt, if he wanted something he charged it, he bought the best of everything. By all appearances we were rich! Yeah Right….. My mom it turns out was a secret saver, any money she could find, that my dad did not know about she would hide and save in a local bank.
When my parents divorced my mom got the house and the debt, first thing she did was sell it and then took what little equity was left and put it in savings. She maxed out her IRA until she retired. Not sure how much she has, but she retired at 58 and lives comfortable and debt free.
To my detriment I followed my fathers way until I drank the Ramsey Kool-Aid and Shaved my head in September.. I have now in about 120 days eliminated $12k of debt! I will be debt free in less than 2 years!
January 19th, 2008 at 12:50 pm
Your post made me laugh…. so like my parents in so many ways. My father always said “you can’t budget when you don’t have money. Budgeting is for the rich.” This from a man who had a motor boat, a triumph spitfire, and went golfing every day he could… courtesy of loans, credit cards, etc.
We’re 5 kids, and only 1 of us is fiscally responsible. The rest of us have been struggling with debt all our lives.
January 19th, 2008 at 7:25 pm
I am #6 of 7 kids. I learned a lot from my mother, though not from direct lessons. My mother never talked about debt or bills so I never knew if they had any debt. She never taught me to balance a budget or a checkbook.
But I learned a lot through observation. I learned how to talk to customer service and get just about anything I wanted. Want that fee waived? no prob. Want a discount at the local department store on a purchase because of a bad experience? done. I learned to be unafraid to ask for anything because the worst they could say is no. I learned also the love of yard sales. I remember when I got married, my mother got me a sewing machine and a blender for a dollar each. I loved them both( never learned to sew though). I also learned to be financially fit and independent in my own right. My Mother was a full-time nurse and could have supported us on her own no matter what happened.
What I didnt learn from her directly I still learned on my own, budgeting and checkbooks and all. But those are the things I talk about with my Little Girl. She is going to grow up knowing the dangers of debt and how to budget. I want her to know the power of having a plan and a budget so that she has the skills to keep herself away from debt.
January 19th, 2008 at 8:30 pm
My parents were really great with money. They raised five kids. They spent money on things that mattered to them–private school for some of us who benefited from it, and college for all of us, for example–but lived in a simple, disciplined way. Vacations were camping trips, and Dad would make a big bag of bologna sandwiches in the morning and a thermos of lemonade for the road. Dinners were always simple and homecooked, and with everyone sitting down together. Mom was a housewife and Dad worked at home. Later on, she worked and stashed a ton of money in her 401K. They had a comfortable retirement. I try to follow their impressive lead–they taught me a lot.
January 19th, 2008 at 9:13 pm
Wow there’s a huge variety in the comments of how people learned to handle money!
March 1st, 2008 at 3:58 pm
I have paid the price of a childhood steeped in abuse and borderline poverty. I never saw much money in our household growing up - I don’t even think there was a checking account in the early years. Whatever cash there was was kept in an envelope above the fireplace.
It’s all going to sound so “poor me” but I never got what I needed and wanted at home because there wasn’t any money. I remember the cupboards and fridge being empty 2 days before my father picked up his pittance from his job. I was always hungry.
Having said that, when I got out of there I went crazy with buying furniture, clothes and cars on loans. I have been financially irresponsible my entire life because I am constantly buying things to satisfy a black hole that is never satisfied. I am awake to my destructive urges and am working to curtail them before they ruin my family.
What did my parents teach me about money? Absolutely nothing. When I finally left to start out on my own, I had no idea how to use a checking account or check book. I never learned how to “shop around” for the best deal. I remember my father wasting what money we had on buying insurance (for what I don’t know) from the most expensive salesman in town who used to come to our house to drink and BS with my dad on one hand while picking his pockets with the other.
Also being a manic depressive hasn’t helped but I am learning to see patterns in my behavior and try to read them better.