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10 Things Your Parents Didn’t Teach You About Money

This article was written by in Best Of, Personal Finance. 19 comments.


When you were growing up, you probably became accustomed to hearing some typical thoughts about money from your parents. These parents are the ones who told you that money doesn’t grow on trees. If it weren’t for your parents, you wouldn’t know that children are starving in Africa and therefore you should eat your entire dinner. When you didn’t complete your chores, you didn’t earn your allowance. Sometimes.

If your childhood was like many people’s, your parents had good intentions. Even while they may have offered some suggestions for handling money as you grew into a young adult, you learned more from their behavior than from their words. And even though you promise to learn from your parents’ mistakes, chances are you will end up, once you have children of your own, being more like your parents than you would like to admit.

Here are ten quick lessons our parents should have given us.

1. You can’t always get what you want, but if you try some times, you’ll get what you need. Who knew that The Rolling Stones would have important life lessons to impart to the public. It’s poignant for a rock and roll song, and a good place to start. With a generation of parents who have been financially successful or have had easy access to credit, have wanted to provide the opportunities for their children than their own could not have afforded for them, and have been encouraged to do whatever it takes to ensure their children rise to the top, some children have grown up with very high expectations for themselves and a feeling of entitlement.

2. Avoid debt but understand its role. Credit cards are everywhere. Young children quickly recognize that by handing a cashier a plastic card, you can walk away with whatever you want. But even teens do not understand what it means to use a credit card and the dangers that can arise from its use. Debt can be expensive if it is not handled properly and should only be used in certain circumstances.

3. Spend less than you earn. It’s simple mathematics, but parents should help their children realize what can happen when someone consistently spends more than they earn. These consequences are often hidden, so shine the light on unsurmountable debt.

4. Consider a practical career. Did you hear, “Do what you love and the money will follow,” when you were growing up? That may be true in some circumstances, but it simply is not always the case. If your passion is bicycle racing, and you wish to do this competitively, you better make sure there is nothing else you could possibly do with your life that will make you happy. It will be very difficult to make a living bicycle racing unless you make your way to the very top. And bicycle racing is only an example.

5. Money doesn’t buy happiness, but it opens opportunities. Studies show that there is only a shaky correlation between net worth and happiness. But maybe happiness is the wrong thing to measure. Having money left over at the end of the day — more income than you have expenses — provides you with opportunities to have satisfying experiences, and with more net income, you can have more and a higher level of variety of these experiences.

6. Give to the world and the world will give back to you. It is naive to believe that for every dollar you provide to a charity or every hour you spend as a volunteer will come back to you in the same form it left. But every human being has a responsibility to try to improve this world in whatever way he or she sees fit. Not only that, but charitable work makes you feel good about yourself, and since there is no such thing as altruism, all motivation comes back to feeling good.

7. You can make the financial industry work for you. Everyone wants your money, whether they are retail stores, banks, credit card companies, your landlord, the electric company, your college, or your local coffee shop. You must give part of your money to some of these beggars, but while you do, make your money work for you. Earn interest in a high-yield savings account. Don’t stand for any financial accounts where you are required to pay a fee.

8. Don’t go into business with your friends. Once you lend money to or start a business with your your friend, your relationship is changed forever. It is likely your friend will not behave as you hope, and the result can be disappointment or outrage. Good friends can be hard to find, so don’t ruin a relationship with money or business.

9. Save first, then spend. This needs to be an explicit discussion. Children see their parents buy whatever the need whenever they want, but the background story is often hidden. They don’t know that the parents have been saving for a year in order to afford the family vacation. To a child’s point of view, Christmas presents magically appear. While you may not want to spoil the idea of Santa Claus — who must be fabulously wealthy — at a certain age, children must learn Where Presents Come From and How Many Months We Saved to Afford Them.

10. You may have to take care of us some day. Here is one reason to ensure you have money to spare as you get older: your parents are getting older first. Lifespans are generally increasing, but quality of life may not be. You may find yourself dealing with your parents’ health issues, like Alzheimer’s, Parkinson’s, ALS, or any number of medical conditions that will make it difficult for them to live without assistance. Not everyone has long term care insurance, and even if they did, there is a good chance it won’t cover all the care that is needed.

What lessons about money did your parents teach you? Are there any lessons you’ve learned since your childhood that you wish your parents had taught?

Updated April 26, 2010 and originally published July 20, 2009. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.

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About the author

Luke Landes, also known as Flexo, is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about him and follow Luke Landes on Twitter. View all articles by .

{ 19 comments… read them below or add one }

avatar The Weakonomist

The biggest garbage in the world of career advice is to do what you love and the money will follow. What a crock, and people still say it. Instead, find something you enjoy that pays good money.

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avatar jason

Exactly. I have been telling people that forever and people always say “do what you love and the money will follow.” I just cant wait to prove them wrong.

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avatar Rob Bennett

I think that the goal should be to integrate your work desires with your money desires. “Do what you love” is an extreme statement. But so is “there’s nothing wrong with working for an employer.” I have known people whose dreams were crushed because they recklessly did what they loved. And I have known people whose dreams were crushed because they counted on employers to be help them realize their potential.

We need to stand on our own and we are strongest when doing what we love. But we also need to live in communities and that means tailoring our desires enough so that people are willing to pay us for what we do. You cannot realistically expect to be able to get away with doing ONLY what you love. But if you compromise too much, you will eventually lose the fire that brings great success and great wealth.

Rob

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avatar Matt SF

Agreed! Do what you love and go broke still applies to 99.9% of the world.

The phrase starving artist was invented for a reason.

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avatar Wojciech Kulicki

@Flexo @The_Weakonomist – The best career advice in regards to “doing what you love” was from a college career counselor.

He made me realize that people have occupations (what we do to make a living) and avocations (things we love to do).

For those lucky enough, our avocations ARE our occupations, but more often than not – we USE our occupations to pay the bills, and “fund” our avocations.

That meeting opened my eyes and literaly transformed how I saw the world of work. Suddenly, I didn’t have to be frustrated about my primary job not always being my passion. I could do what I had to in order to pay the bills, and do what I loved to feed the soul.

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avatar clare

I was lucky (although I didn’t appreciate it at a time) to have an accountant for a father, who had grown up in a developing country and had spent a childhood with 8 siblings and little to no money.

As such the value of money was instilled in us from a young age. I will long remember my fathers mantras: ‘if you you don’t need it, you don’t want it, if you can’t afford it, you don’t want it” ‘why give money to the bank?” (talking about interest on credit cards), “Those blighters will rob you” (American banks) and “‘what do poor people do?” (when as an adolescent I would want designer clothes)

Although I used to be upset that we only had 1 TV and that it was purchased in the seventies (it finally died 3 years ago and has since been replaced- with a free one my dad managed to get from a friend), that my parents still had all the furniture they bought when they were married, and that we never had the ‘cool clothes” or ‘cool toys” I was blown away when I reached college age and my dad dropped $300,000 on my education (from BA -PhD) so I wouldn’t have any student loans (see comment above about giving money to the bank). He also paid for my wedding last year, and has money put aside for a down payment for when I want to buy a house. As I watch my peers and husband struggle with student loans, I now appreciate why I didn’t have an easy bake oven, and squirrel away my money so that one day I can do the same thing for my kids.

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avatar Craig

Growing up my parents did teach me a few of these tips. Wish they would have taught me more about basic personal finances such as with credit cards and retirement. Savings and being frugal were good tips, but more long term strategy and the importance would have been very helpful.

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avatar Matt Jabs

One thing both us and our parents were completely unaware of…

International banking interests using debt to manipulate our government and gain control over our money supply —> Federal Reserve.

What if our world were no longer run by governments… but by international banks? Sound ridiculous? Sound like a conspiracy theory? I challenge you to study it out…

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avatar Gordon

@ Matt Jabs
You are 100% brother!

Support Ron Paul’s “Audit the Fed” bills!!

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avatar gordon

Watch “The Obama Deception” on youtube.

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avatar mike

Read the article The Return of America’s Anathema, by Jerry Salcido, at campaignforliberty (dot) com

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avatar Chelsea

I have spent my 20s trying to undo #9, and facing the reality of #10! It’s true, it is very difficult to undo the impulse spending behavior you might or might not have developed as a result of watching your parents buy whatever they wanted, then pay later.

Good post Flexo.

- Chelsea (with Quicken)

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avatar Matt Jabs

My favorite points are #’s 2, 3, & 9. Common sense approaches that seem to have been stripped from the common sense of the day!

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avatar jason

If everyone had been doing “save first, then spend” we probably wouldnt have been in the mess we currently are.

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avatar Bud

There is a great deal of wisdom in these ten things.

My parents taught me to pay my bills, and to not spend more than I made. They grew up poor and did not ever know much about money; but they knew how to work hard, so they were able to provide for their kids.

Much of what I have learned about money I have learned through experience, study, and resources such as this; a benefit my parents never had.

The best thing about all of the advice in these ten things is, it is truly never too late to learn. And for younger people, the sooner you learn, the better off you will be.

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avatar AJ

This is all so true.

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avatar DonnaFreedman ♦75 (Newbie)

I like all these tips but 1, 3, 4 and 6 stand out to me. In particular I’m concerned about the entitlement factor — if kids grow up getting everything (but not knowing HOW they go it), what’s to keep them from getting credit cards to buy themselves all the things they believe they deserve.
As for the “do what you love” part, a-men brother Ben! Going into debt to study a subject that won’t lead to work, or to start a business you just KNOW will pay off…Well, how much of your life do you want to spend playing catch-up?
My daughter, who works an unglamorous job, has a very realistic approach to this:
http://ipickuppennies.net/2013/10/doing-what-you-love-is-overrated/

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avatar Kendall Peterson, The Cash Whisperer

This is a very good list over all. *chuckle* Yes Luke, there is nothing wrong with working for an employer. We need people to have jobs. The other facet to #4 is “If you can’t figure out how to monetize what you love, find a job that will fund your passion.” I have seen people crush their finances by trying to do what they love but can’t figure out how to make it cash flow. However I have also witnessed people’s dreams be completely abolished in a job that that was “practical” but sucked the soul out of them.

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avatar Luke Landes ♦127,475 (Platinum)

That’s irrelevant for most people. Some simply have no desire to run their own business… and why should they? If everyone ran their own business, or attempted to do so, this country and the world would grind to a halt. Funny how the people who bring up Kiyosaki are those who have something to sell. There is absolutely nothing wrong with working for an employer.

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