How Your Upbringing Affects Your Finances

Because Mother’s Day is upon us, I thought it might be appropriate to share how my parents taught me about finance by leading through example. I came from what I always considered to be a middle class family. I recently looked up the qualifying salaries for the American socioeconomic classes to learn that my parents’ household actually falls under the category of upper-middle class; though I can promise you it is not as fancy as it sounds. We lived differently than most of my friends.

My mom and dad have always shared one car. This was embarrassing to me in my teenage years because all my friends had their own cars. And if I’m honest, it’s really because I thought it made us look poor. I had multiple close friends who drove a Lexus to school. Looking back, that is absolutely nuts to me. When it came time for me to get my license, my parents added yet another driver to the one car and we all had to coordinate who could use it when. My dad has never driven much and always took the train to work and my mom stayed at home, so it wasn’t hard for the two of them to make it work before I started driving.

One time in high school, I was out with the car and my mom called to ask me to return home so that she could take my younger sister to Baskin Robbins. I was so annoyed. They wanted me to take time out of my busy evening of sitting in the strip mall parking lot for this? In this world of two, three, four car households, it is rare to find a family of five with one car. But my parents did it and continue to do so to this day. What I didn’t realize at the time is that this was a savvy financial move that saved them thousands of dollars over the course of their adult lives. I mean, thousands and thousands. One car means cheaper insurance. One car means one oil change every 3,000 miles. One AAA account. One battery that needs replacing; one everything. Last time I checked, one was smaller than two, three, four. When the time came for my husband and I to downsize to a one car household, it wasn’t a scary decision because I had such a great example of it working in my family.

I grew up in a modest four bedroom house that my parents bought in 1988. We had tons of friends living in the new development on the hill with their four car garages and country club memberships. I remember going to a high school party once and my friend’s mom had hired a valet. But there was no threat to “keep up with the Joneses” in my parents’ lives. They bought what they could afford at the time, in a neighborhood on the verge of booming and stayed put. When the 90’s came, the market went up and the house eventually became worth triple the purchase price. After refinancing and making double payments on the principal, they were free of a mortgage a decade early. This taught me that when I eventually own a home, I don’t have to be a slave to a mortgage either.

As I’ve mentioned previously, my parents paid for my college education. This didn’t happen by accident–they planned. They were also able to cover any emergency situation, live a comfortable life and travel a lot. I had been to Europe seven times before I even left for college. Can you imagine what that cost for a family of five? This inspired me to have similar goals of a comfortable cushion in case of crisis. It also taught me that relieving your children of student loans is the best graduation gift you can give them. My husband and I both hope to make travel a priority the way our families were able to for us.

My parents have never carried any debt. My mom used to cut out articles of credit card horror stories from the newspaper and leave them on my bed. It was effective and I managed to get through all of college without signing up for some cold hard plastic. But we all know how that story ends. I opened one after college, everything went downhill and here I am blogging about finance several years later.

They weren’t showy with the money they had, but rather lived like people who didn’t have much. They would sometimes reveal that they earned more than Mr. Blank’s family, but you would never know it by the lengths they went to keep up appearances. My mom would say that when someone drives a nice car, it usually means they carry debt in order to pay it off. Conversely, my parents buy their cars with cash and keep them for twelve years at a time. In the financial blogosphere, this is known as “running your car into the ground”.

My mom and dad are extreme examples of the “if it ain’t broke, don’t fix it” way of thinking. They feel no burden for the latest gadget. They hadn’t bought a new TV in almost twenty years until last December and even that took heavy suggesting on the part of me and my husband. We never had a microwave until I turned eighteen, and even then it was passed off to us, not a purchase. My dad does not have a cell phone. My mom has re-upholstered the same couch and chairs multiple times rather than buying new ones. While I haven’t inherited this particular quality, it has shown me the value of a dollar and consequently made me good at selling old things to buy new ones.

My parents’ wealth is a direct result of their refusal to succumb to economic peer pressure. Far too often, society thinks the opposite is true–that the appearance of wealth is wealth itself; when in reality, you are making yourself poor. It’s an unhealthy mindset that I have submitted to many times over and will likely be a lifelong temptation. I didn’t see the value of the way my mom and dad did things until fairly recently. As an adolescent, I found it socially isolating, as a twenty-something, I didn’t give it thought beyond how it could benefit me. Now that I am thirty, I KNOW EVERYTHING. What I’ve learned in retrospect is that they were incredibly wise in their frugality and it has changed the way I think about my future. In what ways have your parents influenced your view of money in adulthood? Happy Mother’s Day!





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