Both of my parents grew up in poverty, never went to college (my dad didn’t even graduate from high school), and neither received any guidance from their alcoholic/abusive parents. But through the grace of God, my dad became the captain of a 747 jet for a major cargo airliner, traveled the world (multiple times), paid cash for all of his houses and cars, and left a hefty trust fund for his children and grandchildren.
Talk about a rags to riches story!
He was always wise with his money – with saving, investing, and giving. Boy, was he a giver!
But when I moved away from home at 17 from a small town in Arizona to the bright lights of Los Angeles, I had no idea how much I didn’t know about managing money. Because, unfortunately, my parents didn’t teach me.
I think as we get older we learn to extend more grace to our parents. We grow up, have kids of our own, and see for ourselves just how tough it is raising little people. You just do what you know how to do, and you do it the best you can.
So I don’t blame my parents for not teaching me about how to handle money. They did what they knew how to do. If they knew better, they would have done better. But parenting is a juggling act, and nobody ever keeps all the balls in the air.
Now that I’m a grownup, I sometimes do reflect on the missed lessons of my childhood. What would have happened if they had talked openly about the sanctity of sex? How would my life be different if they had taught me the dangers of drugs? How would I be different if they had told me I had God-given gifts to fulfill a God-given purpose and the choices I made throughout my life would either get me closer or farther away from it?
It’s really hard to say. I was a pretty stubborn kid and I may not have listened. But I do believe that those deposits would have somehow made the rough paths shorter, and it wouldn’t have taken as long as learning them on my own.
I’ve made some pretty bad mistakes in my life, and I’m still suffering some of the consequences. Because my parents didn’t teach me about money management, I’ve had to learn some lessons the hard way. But now I know what to pass on to my kids.
Here are five lessons I wish my parents had taught me about money.
Start Saving Early
When you’re young, it’s tough to imagine being old.
I remember thinking how *ancient* 50 years old seemed!
Time moves slower in the early years, so you believe you have all the time in the world. But before you know it, you’re neck deep in a mortgage and car payments, with a spouse and 3 kids.
I wish my parents had told me about the importance of starting to save early in life. That as you get older it gets harder, so build the habit when you’re young.
Having the discipline of saving money helps to keep you motivated with your financial goals and reach them quicker. When you have savings in the bank, you’re not worried about how to pay your bills or what will happen if you lose your job. You’re focused on continually building your savings so you can reach your goals faster!
But probably the most important aspect of starting to save early is the concept of compound interest. The more time you let your money hang out with compound interest, the faster you’ll reach financial freedom.
So start saving as early as you can!
Pay Yourself First
This is the mindset behind saving – believing that your retirement account and emergency fund are the most important places to put your money every month.
In all fairness, this is the one piece of financial advice I do remember my parents saying. Like, maybe … twice?
Yeah, it wasn’t something that was emphasized. So, of course, I didn’t pay that much attention.
I do wish they had *explained* why this habit is so important. But there are a few things I’ve figured out about the importance of paying yourself first.
Putting money away shouldn’t be a) an option, b) an afterthought or c) left to circumstances.
First, don’t give yourself a choice. Paying yourself should be your first priority.
Second, don’t make it an afterthought. Paying yourself should be intentional and part of your money plan.
Third, don’t leave it to chance. Don’t wait until the end of the month to see what’s left over.
This is difficult for some people because they believe saving money isn’t a necessity – like paying rent and eating food are.
This is where the mindset needs to shift. If you have difficulty taking your savings off the top, think of it as paying a bill – your retirement bill. It’s not an option and it’s not unnecessary. It’s the most important bill you need to pay, so pay it first! (*Tip: If you automate your savings, you’ll never miss it!)
You may think you barely have enough to pay your other bills now, so how are you going to add another to it?
But just like paying your rent and your utilities, you find a way to live off what’s left. When you make paying yourself your first priority, you will do what you need to do to make it work.
Have A Budget
Okay, so this one took me a really long time to learn. Like, 50 years long.
I don’t remember ever hearing my parents talk about money together. There were no budget meetings at the kitchen table or discussions about how they would pay for a new car. The money was always there and everything just ran like a well-oiled machine.
I’m not sure I even knew how to make a budget until I was in my 30s. I tried, off and on, to get my husband on board with it. But his lack of interest and involvement made it difficult for me to turn it into a habit. After all, who really wants to restrict their spending anyway?? Sooooo much easier to ignore the problem and just use a credit card!!
Of course, taking the easy route will often get you into trouble. And we’ve had our share of financial troubles, all brought on by our own ignorance.
Since we’ve been on a budget, we have controlled our spending a lot better, been more aware of where our money is going, and learned to live off just our income instead of dipping into our savings.
If you don’t have a budget, don’t wait another day! Put a spending plan on paper so you can get better control over your finances. It’s one of the best things you can do to get closer to financial freedom.
Live Below Your Means
Oh boy, this one’s been a toughie for me.
I grew up living in big homes, driving around in new cars, eating out at nice restaurants, and vacationing in foreign countries.
My dad wasn’t filthy rich, but our means were more than most. So, living below them was still above what many of our family and friends could afford. (In other words, it wasn’t difficult!)
This created a level of expectation that my husband and I have never truly been able to meet. But that didn’t keep me from trying.
I’ve struggled with wanting to give my kids the same experiences that my parents gave me. And because it took me several years to accept that I couldn’t (at least, not yet!), I often added to our debt with expenses we had no business paying for.
Living off 100% (or more) of your income is basically living paycheck to paycheck. And once you start down that road, it’s hard to change direction.
I wish I had learned the value and wisdom of creating financial boundaries when I was younger. Not just for the purpose of not overspending, but also being content with less than we could afford.
Honestly, I still struggle with this. I hate not being able to take my kids on awesome vacations or pay for extra lessons and coaching. I feel like a disappointment when I hear about the experiences their friends are having. And I have tremendous guilt over taking so long to learn from my mistakes.
But all any of us can do is start from where we are. We can’t go back and fix the past, and we can’t skip ahead to a better future.
So each day I try to make better decisions, and sometimes that involves a little sacrifice.
The good news is when I live on less today, that leaves more for tomorrow.
Doesn’t this piece of advice apply to almost every roadblock you come up against?
I want to make more money! Be patient.
I want to find the love of my life! Be patient.
I want this new dress / car / TV / cell phone / etc. NOW! I hear you. But be patient.
We live in an instant gratification culture, and the habit of delayed gratification has been buried underneath instant messaging, overnight shipping, and immediate access to information.
I didn’t grow up with text messaging and Google, so I did have to wait for someone to call me back on the house phone, or go to the library to do research for a term paper. But this was just the way of life, and there weren’t any other choices.
So when the internet came into being and technology exploded, the space between stimulus and response became smaller – leaving very little room to think about consequences. Especially for those who never learned to control their impulses in the first place.
It never took much to talk my dad into spending money – especially if it meant making someone happy! I don’t think he ever saw the point in putting off a little indulgence.
It made life fun at the time, but I didn’t realize how much it would influence me in adulthood. Not controlling my impulses has been a huge reason we’re still in debt.
If I could pick the most important money lesson I wish my parents had taught me, it would be delaying gratification. Learning to be patient in times of great temptation. Having the self-control to wait until I saved up the money. Being smart about financial decisions instead of emotional.
I’ve definitely gotten better with waiting, but it’s a process. The more you flex your “patient” muscle, the stronger it gets.
In A Nutshell
My mom and dad were great parents, and they raised me and my brothers the best they knew how with the knowledge they had.
It’s easy to spot the missing pieces as you get older and realize how childhood experiences still influence your decisions as an adult. But at some point, we all need to take responsibility for our own life lessons.
My parents weren’t perfect and had their own degree of dysfunction. And I’m sure I’m contributing to issues my kids will struggle with in the future. But I know that my responsibility isn’t to keep them from making mistakes when they’re adults.
My responsibility is learning from my mistakes in the past, and passing on that wisdom to them.
So if I can teach my kids to start saving early, pay yourself first, have a budget, live below your means, and be patient, they will have a much better head start on wise money management than I did.