“As young children, we tend to internalize everything our parents tell us as the truth, including what they say about money.”

Whether or not we are aware of it, the decisions we make as adults are greatly influenced by how we were reared. So if you have heard unpleasant things about money from your parents, like “money is the root of all evil” or “money doesn’t grow on trees,” you may not have a positive outlook on money. 

This would lead to always staying in a financial slump and not working hard enough to build wealth or grow rich. 

According to the 2017 Parents, Kids & Money Survey by T. Rowe Price in the US, it was indicated that children of financially distressed parents inherited troublesome money habits. 

This is the reason you as a parent or an individual need to sit and reevaluate your money spending patterns and reflect on how, and if, they stem from a childhood that witnessed unhealthy money habits. 

List Of Parental Behaviors Influencing Your Present Day Money Habits

I have listed down 4 common childhood financial experiences that could be affecting your pockets today:

Not Enough Conversations Regarding Money

Our household conversations regarding money tend to build our perspectives. Consider the tone of the financial discussions that took place in your home. Did they come from a place of hope or fear? Did they involve discussions on how to improve one’s financial outlook?

This is a fairly prevalent issue frequently brought on by subconsciously perpetuating their own parent’s lack of financial literacy. Such households perpetrate the notion that talking about money is impolite and should be forbidden. Additionally, women have historically been kept in the shadows about home money. Due to ignorance or personal inclination, parents have avoided talking to their kids about money for decades.

A lack of open conversations could potentially lead to a lack of financial knowledge. You might end up being financially irresponsible in several ways, including overspending, undersaving, avoiding investing, and/or failing to organize your finances in general.

Children of such parents grow up to become adults that need to unlearn a lot of things in order to do well in life financially, simply because they lack a solid foundation in financial literacy. But it’s never too late to learn. Get educated, get involved in financial matters and if you are a parent, make it a priority to talk to your children about money. 

Financial Status Of Your Parents

Your approach to money is also greatly influenced by the financial status of your household while growing up. How your parents, guardians, and those in your immediate environment handled their money tends to impact your money-managing habits. 

If you were raised in a family where money was scarce, you might have developed the mindset that you won’t ever make more than a particular amount and be afraid to spend a lot of money, even if you can. 

It is also possible that your parents were poor but still decided to spend excessively on you. You had a comfortable upbringing, never lacking anything, but you didn’t know how they made ends meet. As a result, you grew up believing that you deserved to live a luxurious lifestyle. You developed an excessive spending habit and a “living in the moment” mindset, even when you didn’t have enough. Not having enough money to support your lavish life might result in you knee-deep in unnecessary debts.

Your circumstances could be different, but if you weren’t taught the right ways of spending, investing, and saving, the consequence would always be poor money habits.

Your Parents Bad Mouthed Investments 

How your parents view investment as a money-growing strategy shape your opinions regarding investing. 

Whether they lived through the Great Depression, took a big hit during the Great Recession, or made bad stock-picking decisions in the past, it may be possible that at the end, they chose to put their money in the safest place possible-under the bed. 

Consequently, you stay away from investments altogether. This can seem like a secure option, but to have a shot at a decent retirement, you need to increase your cash flow as much as you can now; with the most reliable and advised way to build money being investments. However, due to the conservative opinions of your parents regarding investments, it does not seem the best option for you. 

Unlearning and educating yourself here is the key. When making investment selections, exercise caution and thought. This entails conducting adequate research and aligning your investment with your goals and stamina for risk tolerance. To avoid taking on unnecessary risk, you should also ensure that your whole investment portfolio is well-diversified.

Pro tip: Learn from those who are where you aspire to be. Don’t be afraid of seeking mentorship and financial guidance. 

Not Being Given Free-Will Over The Use Of Pocket Money

Laying down basic rules for your child regarding the best use of his/her pocket money is OK, but after that, make sure you give them the discretion to decide what to buy. If you consistently correct or overrule the child’s choices, you will undermine his confidence and self-worth, which might manifest as financial paralysis.

Parents don’t explore many investment options for their children’s pocket money and kids spend their money on toys and candy. Children don’t know anything about investing; they rely only on their parents to teach them the best use of their money. Since parents are not always up-to-date with current options, they might not believe that their children need to learn the basics now. 

Parents should contact financial advisers to learn about current investing possibilities if they lack the necessary understanding. A child is more likely to seek assistance and information as an adult if he sees his parents doing so.

Final Thoughts

What you believe about money is how you end up attracting it. 

It is undeniable that our upbringing has a significant impact on our actions, but we must also recognize that we have a choice as adults if the choices made for us as kids were not particularly healthy. The first step to attaining your financial goals is conducting your own research and seeking help to grow your wealth.