4 Reasons Your Childhood Directly Affects How You Deal with Money

College student using a laptop outdoors.

When I was 16, I accrued a $12 library fine for a few books I failed to return on time. I knew my dad would have a word or two to say about it, but what followed was a 30 minute diatribe – at least– about how said fines and late fees could really mess up my credit one day. Um, credit?

I proceeded to tell him that taking such a quantum leap was ridiculous, and I wasn't ruining my entire financial future with a few measly library fines. But the long lasting result of that conversation, and several before that, was a paranoia about how my everyday decisions and purchases could be impacting my financial health and bottom line.

Don't get me wrong, I fully appreciate how mindful my parents taught me to be  – I just know some of those lessons reap healthy habits in my current life stage, and some reap a few not so healthy habits.

The truth is, the way we grew up and the money lessons we gathered along the way can have a huge impact on the way we handle money as adults.

How exactly? Let's take a deeper look.

Our first experiences with saving and spending is through witnessing the actions of our parents.

While my parents made it a point to take the family on at least one big trip a year, I knew that we always split meals at restaurants, and never purchased food or drinks at the movie theater. Through these unspoken rules, I learned how they prioritized their spending – they cut where necessary so they could comfortably spend on the things that mattered most to them.

My priorities might vary slightly from theirs, but I know that I frame my spending habits in the same way my parents did, making purchases with a thought of what I may need to sacrifice if I spend my money on x, y, or z.

Were your parents mindful spenders and savers? Or was money for spending and the saving only happened when it was absolutely necessary?

The experiences of our parents help determine what our risk tolerance will be.

Many studies of the millennial generation suggest that they are extremely conservative when it comes to investing. In fact, they are much more comfortable keeping their long-term savings in cash than in the stock market.

For some, it's simply because they saw their parent's nest egg decimated by the Great Recession. I would consider myself to be one of those millennials – I'd rather keep my money in my savings account no matter how much factual knowledge I have about the gaping holes in that logic.

Did your parents take great risks with their money and experience financial hardship as a result? Or were they entirely conservative and you find yourself following a similar line of thinking?

Our attitude towards money is shaped before we have our own money to spend.

In all of the decision making that my parents did around money, the overarching message was that money was to be understood and respected. Purchases were generally never made lightly.

Sometimes, however, the message is different. Some view money as the physical representation of greed, so the pursuit of money isn't encouraged, and money conversations are tabled before they even begin. Others operate from the belief that there simply isn't enough to go around, therefore lack is a common state of being.

We each have tapes playing in our mind about these spoken or unspoken money attitudes before we even earn our first paycheck. Can you think of what yours says?

Our parents start to paint a picture in our mind of what is possible – and what isn't.

Many of us carry the expectation that our lifestyle will be similar to that of our parents. We may be swayed to change or surpass that benchmark, but many already have a picture in their mind of how well they will do financially before entering into the workforce.

When we see or, more importantly, expect great opportunities and chances for financial success, we are more likely to push to make it happen. If we see our future as a direct reflection of a financially destitute past, reality is likely to follow suit.

Are your financial expectations and money habits consciously or unconsciously mirroring that of your parents? Do you expect to have the same results as your parents – positive or negative?

So what's next?

Recognizing the carryover from the money messages and interactions you witnessed as a child to your life today can do wonders in reshaping the way you think about and handle your money going forward.

Start to pay attention to when the tape from your past doesn't actually reflect what is currently happening or what is in your best interest now.

Often times the lessons we glean from our parents are a mixed bag – some are great and some are not so great. Learning how to take what serves you and leave what doesn't can do wonders in establishing your own relationship with money.

Kayla Albert is a proud Colorado native and personal finance writer for ReadyForZero, a company that is helping Americans manage and pay off debt online. She enjoys sharing tips on saving money and getting out of debt. You can follow @ReadyForZero and @KaylaAlbert33 on Twitter.

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