How did your parents manage their money? If you are not sure, chances are good that your parents did not have a strong impact on the way you are living and spending (or saving) money today. However, you may not realize that what your parents did with money really did impact your own lifestyle choices. Take a look at a few scenarios and how they could have impacted your financial future.
Your Parents Did Well Budgeting and Managing
Some parents, especially older parents, managed money very tightly. Credit was not something that they wanted and not being able to buy a home with cash was a sure way to show the world that you did not have the means to manage your money. Money was not wasted on toys, eating out or other things people do today. If your parents taught you to manage money like this, you are likely a saver and satisfied with minimal purchases and needs.
Your Parents Struggled Financially
In some situations, the outcome may be directly the same or different from your parents. For example, if your parents struggled and you had very few toys and new things, you may have resented your family’s struggle so much so that you now spoil yourself with the purchases you make. You may be spending money now, and using credit heavily, to fill in that void.
On the other hand, some children knew that their parents were struggling and thus they did not want to see themselves in that same situation, especially with their own children. This leads to the more frugal minded person who wants to spend less so that he can have more in the long run and never be in a financially bad situation like his parents.
Your Parents Spent Money
On the flip side is the parents that liked to spend. If your parents spent money easily and you received the things you wanted, you may have the same lifestyle now. You may be using credit cards quite heavily, even if you did not know that your parents borrowed money to manage their finances. You want to live and give the same style of life (having what you want) to your children.
Budget Families Are The Best
The smallest percentage of families is those that taught their children the value of a dollar. These people worked very hard to earn what they had and made sure their children knew it. They worked out a budget each month and the kids knew there was nothing extra. You may have been given an allowance as a way to teach you how to manage money, or encouraged to get a job at a young age.
The way your parents managed money is almost always a direct reflection on the way you manage your money. You can break the mold though. To do so, you need to make your own decisions on how to manage money properly, and pass on the right methods to your own children as well.