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Where Did You Get Your Financial Habits?

This is a guest post from Andrea at So Over Debt, a 29 year-old single mom working to overcome a ton of financial mistakes. Visit her site to read about her journey to get out of debt, make better choices, and help others do the same.

It’s no secret among my family and friends that I’m in recovery from a serious spending addiction. Just six years ago, I cut up around twenty-five credit cards and filed for Chapter 7 bankruptcy at the lowest point of my downward spiral. Two years ago, I was in debt again – to the tune of 5 credit cards and over $6000. And a year ago this month, I paid off my final credit card and haven’t carried a balance since. (Yay, me!)

The one thing people always ask is where in the world my habit of overspending came from. My parents don’t live beyond their means, and neither do my grandparents. I was probably in 8th grade before I even knew what a credit card was! Yet it’s exactly those circumstances that molded me into the shopaholic I was. While I’ve come a long way and take responsibility for my choices, my upbringing is the exactly reason I call myself “recovering” instead of “recovered.”

Humans generally form habits in one of two ways – imitation and reverse imitation. We all know what imitation means. It’s the baby who smears lipstick everywhere trying to be like Mommy. Almost every scene in Home Alone. People buying Ugg boots after seeing celebrities wear them. (At least that’s the only explanation I’ve managed to come up with for those atrocities – please don’t tell me otherwise!)

Reverse imitation, though, isn’t always as easy to pinpoint. Ever hear someone say they don’t drink because one of their parents is/was an alcoholic? How about the people who use time-out with their kids because they were spanked growing up? These “reverse imitation” habits are usually an absence of something rather than the presence of it, so they can be overlooked. However, as I’ve learned in my own life, that doesn’t make those habits or traits any less prominent – it just makes them more difficult to break.

My parents never explicitly taught me anything about money or how to manage it. That’s not an excuse or criticism; it’s just a fact. Obviously I saw them spend money, but I wasn’t involved when it came to budgeting and saving it. I didn’t grow up with an understanding of what was going on when it came to the family finances, which left me to form my own conclusions in my childhood head.

Here’s what I “knew” about money as a kid:

  • I knew that paying bills was really stressful and my mom and dad usually fought about it.
  • I knew that my sister and I had everything we needed and a lot of what we wanted.
  • I knew that one could write a check and it was just like actual money.
  • I knew that I was never ever allowed to look at my mom’s checkbook.

And here’s how that worked out for me in adulthood:

  • I avoided paying bills until the last minute, viewing it as a horrible experience to be avoided.
  • I spent on needs, but plenty of wants as well, with no thoughts about exactly how I would pay for everything.
  • I wrote bad checks and paid overdraft fees constantly.
  • I treated my checkbook ledger like a bomb that might go off at any second (which, in retrospect, it sort of was!)

In my case, a combination of imitation and reverse imitation led to my poor financial habits. I was so busy picking up the nuggets of “wisdom” above that I missed the bigger picture. Like the fact that my mom bought her own clothes at thrift stores to be able to dress my sister and me like our friends at school. Or the side jobs my dad always took in the fall to earn money for Christmas gifts.

Since I was left to interpret financial matters on my own, I managed to develop a set of behaviors that are the complete opposite of the example my parents tried to provide. This has influenced me to provide my son with overkill when it comes to information about money, all with the hope that he’ll understand and imitate the habits I demonstrate now, not the ones from the past.

Where do your financial habits come from? Can you pick out certain family members who influenced your decisions, either by imitation or reverse imitation? What habits do you hope to pass on to your (actual or potential) kids someday?

  • Jordann - I can definitely see how my fiancée's dad's financial habits affected him. My fiancée's Dad NEVER talked about money, it was the most taboo subject in the house. As a result it was really difficult to get him to come around to the fact that we NEED to talk about money, that everything doesn't just "take care of itself" and that it requires actual planning on our part to afford things. He's much better now but it was a point of difficulty for awhile. I think talking about money with your children is really important, maybe not talking about your personal finances, but teaching how it works and where it comes from, and where it goes. ReplyCancel

    • Andrea - I agree 100 percent! Money was pretty taboo in my house growing up, and while I seem to have run the other way with it, my parents are still as tight-lipped as ever. It would have been so helpful to hear conversations and see how financial decisions were made, even if I didn't know the dollar amounts. ReplyCancel

  • Emily @ evolvingPF - I am a total reverse imitator. My parents don't communicate about money well with one another; my husband and I are totally open, touching base every time we make a purchase and discussing the bigger picture multiple times weekly. My parents don't track spending or keep a budget; I'm totally anal about both. My parents married their money-personality opposites; my husband and I grew together to have the same attitudes about money before we got married. My parents are in various types of debt; we are debt-free and never plan to take out more debt aside from a house. My parents make enough money that they think they don't need to be concerned about it; we make little money and have to tightly manage it.

    I basically taught myself everything positive I know about money through reading post-college. Now I'm trying to help my parents sort out their situation but it's very hard to get through to them.

    Thanks for this great post! ReplyCancel

  • Mochi & Macarons - From my debt. Without having gone into $60k of debt for my education, I wouldn't have the net worth I have today.

    Otherwise, my parents gave me 1 good piece of advice: Never carry a balance on credit cards. When you buy something, pay it immediately.

    My dad doesn't follow his own advice, but I have since the day I got my first piece of plastic. ReplyCancel

    • Andrea - That's excellent advice – I wonder how different my life would be if someone had told me that when I was younger! My parents use credit wisely, but since they didn't talk to me about it, I didn't know. And now my massive pile of debt is my instructor. 😀 ReplyCancel

  • bogofdebt - money was kind of taboo becasue we really didn't have any. So I knew that it was stressful but I think I went from "wow I have no money to spend on anything" to "wow I have my WHOLE PAYCHECK to spend on anything I want as long as my bills are (mostly) paid". I of course now know that a savings is wonderful and delayed gratification won't hurt me. I want to teach my future kids that they need to save and not overspend just because they can. ReplyCancel

    • Andrea - I did some of that. My parents were usually able to pay for the things I wanted or needed, but I never had actual money of my own to manage. I spent my entire first paycheck on a dining room table and chairs (which I don't regret) but I immediately took my income as an excuse to go spend a ton of money, reasoning that I could afford to carry more debt. *headdesk* ReplyCancel

  • Marissa - My mom is brilliant with stretching her funds out, but that didn't stop me from being careless with my money. I really don't know who I can credit/blame for my habits. Thankfully, I smarten up the last few years so my kids (potential) have something positive to look forward to. ReplyCancel

    • Andrea - My parents are TOTALLY relieved that I've finally figured some things out when it comes to money, but my mom always says, "I just don't know how you ended up in this mess!" And there's no point in trying to explain because she'll take it as a criticism. I just cross my fingers that my son takes after the "new" version of Mom instead of the old one! ReplyCancel

  • lkrant - I was a child of two entrepreneurs who weathered The Great Depression successfully. The only debt they ever had was one mortgage on their first home. They owned a second home in the country free and clear. I probably learned a great deal from them and built on it. ReplyCancel

    • Andrea - That's really awesome – what a great example!

      I'm in an interesting position as far as my self-employment goes. My dad's dad was always self-employed, so my dad is very comfortable with what I'm doing. However, my mom's dad was a union coal miner and she just freaks out at the "instability" of entrepreneurship. So that makes for an interesting dynamic as far as my employment choices are concerned. ReplyCancel

  • Lance@MoneyLife&More - I learned my money habits from my mom and bloggers! My mom handles all of the money and she was always really conscious about what was going on it seems. Overall I'd say she did a great job and bloggers have supplemented while I was in college so I got a great start! ReplyCancel

    • Andrea - I wish there had been more blogs when I was in school, or that I had been in a frame of mind to look for them. I'm blown away by how much I learn from others' knowledge and experiences! ReplyCancel

  • MaryMikell - I'm re-learning from Andrea… My first lessons were much like hers, from the 'rents… I saw Mom working her tail off just to make ends meet, while Dad, while equally hard-working, had a more relaxed approach.
    Sometimes I slip too much into Mom mode and get manic over my spending "omg I can't believe I just bought that, what was I THINKING?", and sometimes I slide too far the other way "Oh, well, it's just money after all…"

    I've been forced into learning better management by a pending divorce and the sudden need to support two kids on my own. Love love love these blogs! I might make mistakes, but at least I know I'm not alone! ReplyCancel

    • Andrea - Divorce will definitely shock you into reality – I learned that one the hard way too! I'm always interested in the way that some people learn excellent habits from their parents while others go the opposite way. My sister, for example, seemed to pick up on the good things my parents did with money. Sometimes I wish I could trade brains with her! ReplyCancel

  • Young, Cheap Living - Like you, I was taught a lot about finances as a kid. My dad taught be how our family didn't borrow money. He specifically told me about it when he got deals on our cars and paid cash for them. When him and mom paid off our house when I was 10 or so, it was obviously how proud of that he was and us kids all clearly knew about it and what it meant.

    I took outstanding vacations on a budget and we saw how they can be very special even when money was not spent. My dad taught me a ton before cancer took him away when I was 17. My mom was mostly a spender and liked to spend money on things that might make her happy. I have learned from her that spending money to be happy isn't very effective. She is turning that around now though and realizing that "nice stuff" can't make you happy. ReplyCancel

    • Andrea - Glad to hear that your mom is making some progress. And I think it's awesome that you were involved in the details about things like buying cars and paying off the mortgage – I didn't get to be a part of things like that, and I think it would have made a big difference! ReplyCancel

  • Dave Hilton - I have a question. Do you still avoid discussing money and finances with close family and friends? Sure, you write about it…but that's not quite the same as intimate face-to-face interactions. ReplyCancel

    • Andrea - I'm pretty open about my financial situation. It was always very frustrating for me as a kid to wonder what the heck was going on. I still have no idea what my dad makes in a year – not that I really need to know, but it would be nice to have a ballpark idea of where my parents are financially and what help they may need in the future. But I never mind for people to know what I make. Maybe it would be different if I had a high income; I don't know. ReplyCancel

  • Little House - I had a similar experience growing up, though my parents never fought over money. Money was actually never discussed and both of my parents were retired by the time I was in grade school. It was a very unusual situation – they had plenty of money from an inherited multi-unit apartment building, my step-father was much older than my mother and provided for our family, and they were very, very frugal. Finances were never discussed, though I knew that when I moved out at 18 I was on my own with little financial education. I don't blame them, but it didn't help when I had to navigate everything on my own. I had to learn about personal finance through the school of hard knocks! Not a fun way to learn. ReplyCancel

    • Andrea - I agree 100%. Experience is the best teacher, but it's definitely not the easiest! My dad tried to impart some wisdom once I was an adult, but a lot of my bad habits were already set. It has taken a LOT of hard lessons for me to understand what he was trying to tell me. Not seeing it in real life as a kid made it hard to believe his advice applied to me. ReplyCancel

  • myfamilyfinances - I think this is why it's important to share the financial decision making experience with your children. It was taboo in my family; as it is in most family's. However, if you don't let kids in on the knack for spending and saving money, they aren't going to get the big picture. ReplyCancel

  • Can You Answer These Financial Questions? | So Over Debt - […] will you teach) your kids about money? I’ve written several posts about this. (See here and here.) Have you thought about how your habits will affect your kids’ and grandkids’ […]ReplyCancel

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