What money lessons did your parents teach you?

[StitchesGr8Fan]

I've been thinking about all the things we will have to teach our child once it is here. I think one of the most important skills a child will need to learn is about managing money. I also think that is something that some parents avoid or don't know how to teach, maybe because no one ever taught them. I think it is especially important after seeing what happened when the economy crashed and so many people had too much debt and not enough savings.

Here are 2 very important lessons I my parents taught me:

1. Loans and interest. When I was around 8yo I did get a weekly allowance. I wanted something (don't remember what) that I didn't have the money for. So I asked my dad for an advance on my allowance. The advance was the equivalent of 2 months allowance. So my dad said he would give me the money, but I had to pay interest - 25%. He explained what the interest was, but I didn't really list. I was like "yay, great, interest is no big deal, I get the thing I want!" I get my thing, 2 months go by, and I'm ready to get my allowance again because I want the money to go the mall with my BFF and her mom. My dad had to remind me that because of the interest I owed, I still had to give him 2 more weeks of allowance. I went to the mall with no money and watched my friend spend her allowance she saved. Lesson learned -borrowed money isn't free. There is a cost to it - an opportunity cost and/or a financial cost.
2. Take care of what you have - When my mom saw that I was rapidly approaching that age where kids don't take care of their toys because they think mom and dad will replace it, my mom quickly nipped it in the bud. I got a new toy that all the kids wanted, and it had a few different pieces, all required to make it functional. My mom told me to take care of it, keep it all together. Less than a week later I broke a piece that made it non-functional. I got all upset and wanted a new one. My mom refused to buy my a new one and I was devastated. But I took better care of my toys and kept the pieces together. I even made my friends take care of my toys, or I wouldn't let them play with them. Lesson learned - take care of what you have because there you may not be able to get another one
3. Make sure you really want it - Another common kid one - you want something right then, and don't think about what you are willing to give up to get it, or if you will want it 2 months from now. My parents let me learn this one the hard way. I wanted some electronic when I saw it in the store, and I had the money so I bought it. My parents didn't try to stop me. That electronic quickly started gathering dust and I saw something else I wanted. But my money was gone and I refused to borrow more (see #1), so I had to do without. Lesson learned - if you think you really want something, sleep on it. If you still want it after a certain period of time then you can always go back and get it. If it is gone, it wasn't meant to be

So what did you learn about money from your parents?

 

[Chim Chiminy]

"Don't mess with the IRS"

Seriously, I learned as a young adult not to take any financial advice from my parents....ever. They didn't talk about money with us when we were kids though.

We, on the other hand, have always had financial discussions with our kids. I didn't want them growing up ignorant of finances or being scared of financial decisions.

 

[Chikabowa]

My mother sat me down at 12, when I got my first checking account, and taught me how to reconcile my statement and log all my purchases so I knew, down to the penny, exactly how much money I had.

To this day, while everything is electronic, I can still give you down to the penny balances on all out accounts.

 

[beaucoup]

Save the money up for the item you want to by. Often, by the time you save the money, you no longer really want the item, and now you have a savings account. Lesson learned: Don't impulse buy. Save money in the bank.

There were never any loans in our house from parents when growing up. No one gave us any money. We had to earn our allowance & use that.

Financial responsibility. Pay yourself first. Then your bills. And pay yourself again.

Make a yearly & monthly budget. Know what you can spend. Don't just spend. Been doing this for over 25 yrs now still.

I'm grateful for all my dad taught me about money. We do not make much compared to a lot of people, have 1 income now, and are debt & mortgage free in our 40s. We do things different than most people our age. Townhouse instead of big house. Pay credit card in full every month. Live within our means. Obviously doing something right.

Security is a good feeling in this economy.

Guessing my banking background didn't hurt either.

 

[superme80]

Don't spend what you do not have, credit cards are for making reservations only, and never cheat on your taxes. I have only been really good about the 3rd one. Doing better with the first 2 now.

 

[beaucoup]

BTW, great idea for a thread. I'm always surprised & disappointed by the lack of solid financial advice & guidance on the DIS Budget Board. I call it the Spending Board.

 

[bballmom56]

Credit cards can be a great tool. Just make sure you keep track of your balance and be able to pay it IN FULL when the bill comes.

Save, save, save.

 

[branv]

I only learned what NOT to do:

#1 Being too frugal can cost you more down the road

My dad hated spending money. But to the point he wouldn't pay to maintain things, like cars, homes, medical/dental. A car wouldn't get regular maintenance, and definitely wasn't taken in when something wasn't running right. Result: car would break down and, for example, instead of it being a small repair like fixing an oil leak, that leak turns into a huge repair like a burned up engine. Same with his house roof. Dental example: my dad would never pay for us to have regular dental exams -- brushing was good enough. When I finally got to go to the dentist at 15, I had 9 huge cavities (which, incidentally, now cost me $$$ because they are slowly having to be replaced with crowns as an adult). Just stupid economics.

#2 Play now, pay later

My mom was the opposite. She was the type that if you gave her money that had to last for two weeks, she'd spend it all in a glut of indulgence in three days then suffer for the rest of the time. Pay day meant fun day, not put the cash aside because bills are coming. As a result, the only time she had real control over the money was when Dad would go out of town when we were kids. He would give her a bunch of cash up front, and we'd have a ball for a few days, until it was almost all gone and she'd freak out. One of those weeks it was my birthday, and mom spent all the money before that day. So I was out of luck. Dad got a credit card for his business, and made the mistake of putting mom on the card (their first, and she's in her late 40's at this point). In a matter of weeks, she spent twice as much on junk than they made during that time period. Serious problem.

#3 Don't marry someone who is not on the same page as you about finances

See #1 and #2 above. DH and I never fight about money. Can't say the same about my parents.

 

[Acklander]

By nature, we tend to be tight with money in our family so I've never been big on buying unnecessary stuff (hate clutter) and am good about saving. I know that there were some fun things my dad wanted to do, but he would always put it off till later. When he passed on, I felt bad that he hadn't gotten to many things on his bucket list even though he had a decent amount in his savings. So, I guess the most important thing I learned was that you can't take it with you. I still don't spend much on "stuff" (still hate clutter) but I will spend money on experiences.

 

[joviroxx]

1- Always save
2- Your credit rating is vital and precious. Take care of it, respect it, treat it right Having excellent credit was drilled into us. Nothing was worth buying if we coudn't maintain good credit.
3- Learn to work within your cash flow. Budgets are important. Make one, stick to it.
4- You save more with pennies than dollars. My dad always taught me that cutting back in cents can have a bigger effect than only cutting back when its in bigger amounts. Penny saved is a penny earned?

 

[Janepod]

First, buy real estate -- location, location, location.

Second, flaunt your money like crazy. It's important to keep up with the Joneses. People must know how wealthy you are! Otherwise they will think you are stupid, you married poorly, and your husband is a failure.

I follow one rule, not the other.

 

[Pooh_Friend#1]

Save, save, SAVE. As young kids, we were required to save half of our Christmas/Birthday money and then we could do whatever we wanted with the remainder. When we got a job, same thing....put some in savings, pay off expenses, and then whatever is left can be play money. I wish my DH was taught to save. He blows it the minute he gets any cash.

 

[ilovemk76]

nothing

 

[A_Princess'_Daddy]

My parents taught me the importance of leverage. Using somebody else's money to make more money for myself is a good investment (and now I work in investment banking, so I learned that lesson well).

On a related note, they taught me that debt isn't inherently good or bad; it is what you do with debt that counts.

They taught me that it is possible to have too much money, and when that happens, it is our responsibility to share that money with the less fortunate, both through supporting philanthropic organizations and paying higher taxes.

They taught me that nobody gets to where they are by themselves and that we all owe it to the world to give back.

They taught me that education is the best investment you can make in your children because it means they will learn how to provide for themselves in life.

 

[crz4mm2]

Never use credit.



I missed the lesson...

 

[wiigirl]

Save and invest....plan for the future. Its better to be broke when you are young than when you are old.

 

[akcire]

Only borrow money to buy property, everything else gets used up before it is paid off.

Look at so and so he makes tons of money but buys everything shiny, he has no money in the bank. Don't be like so and so.

Get a job work hard, if you have to get 2. No point in sitting around, plenty of time for that when your old.

If you only need it for a short time borrow it, but return it immediately and be gracious and grateful.

Don't ever loan anyone money unless you can afford to lose it.

Quality above quantity.

Appreciate what you have.

Remember how long you had to work to earn the money to buy x. (I still do that one in my mind). Then decide if it is worth the cost.

Never pay someone to do something you can do yourself, some of the best paid jobs are unskilled but dirty. (They were referencing chimney sweep, trash man, etc, Not as applicable, but I still clean my house and, mow my lawn. However if the teenager comes by with a shovel when there is a foot of snow he is hired!). I also try to do most of my own home repair but I know my limits.

Figure out ways to make your own money. Your money is a business, be in business for yourself. If you work for someone else for wages. Once those wages are yours you decide how they are spent.

If you can only get a low paying job, try to find one with free housing.

I was raised by my grandparents who were born in the early 1900 lived through a famine in their country, the Great Depression in USA, and ultimately moved back to their country and died with moderate to substantial assets. I always follow their advice. A Mexican woman running a stall in Cozumel once called me the cheapest American she ever met. In Spanish I thanked her for the compliment. We all laughed.

 

[WhateverLolaWants]

My parents taught me how to worry about it. Which I guess is sort of good because now as an adult I use spreadsheets to track my spending and income down to the penny.

 

[The Mystery Machine]

Nothing...My parents are absoutely clueless and continue to make poor decisions. They are in their 70's and nothing had changed.

 

[ceemys]

Nothing! That is why I was in money trouble so often. I have had lessons learned the hard way and I am in a great place now. I am teaching my children what I wasn't.