Financial lessons learned…from your parents
The nature versus nurture debate is as old as time. Which of your traits and habits were you born with, and which were a product of the place you grew up and the people you grew up with?
While there’s no real way to quantify it, what can’t be denied is that nobody has a bigger influence on us than our parents. A lot of what we know, we learned from watching them. That includes our financial habits.
In this article, we’ll explore some of the most important financial lessons our parents have taught us.
Start saving early
Your parents might be happily retired by now and comfortably living off savings or their pensions. They probably never thought about savings plans or retirement when they were your age, even if they bang on about it now. That’s because things were different then.
When your parents were younger, access to a comfortable state pension was guaranteed, there were more public sector jobs with excellent pension plans, and even private companies offered more beneficial pensions.
Not any more. As medicine and technology advance, people are living longer, which puts more strain on the public purse. For people currently in their 20s and 30s, the state pension age may be around 70 by the time they reach retirement.
Not many people like the idea of working until they’re 70, so you should start saving as soon as you’re able to, no matter how far off retirement seems. You could try matching your employer’s pension contribution if it’s more than your own, or paying in a lump sum if you come into some unexpected money. When the time comes to wind down, you’ll be glad you did.
Learn to say ‘No’ (or at least ‘not yet’)
Parents say no – a lot. It’s quite often to do with money. We’ve all been guilty of picking up a toy from the shelf and asking our parents to buy it for us. And when you’re young, once you want something, you want it now.
But your parents didn’t say no just to spite you. There was a reason. They were teaching you an important lesson, not only about the value of money but something even more central to future financial stability – the art of delayed gratification.
If your parents caved every time you asked for something, maybe they wouldn’t have enough money to buy you something even better. Similarly, if you fritter your money away on the smaller things – drinks, dinners, clothes – you’ll hurt your ability to afford the most important things – your education, your wedding, the holiday of a lifetime.
Sometimes it’s important to forgo the smaller expenditures, in favour of the bigger ones. Figure out what’s important to you, work towards getting it, and keep the end goal in mind whenever you’re tempted.
Help others where you can
We’ve all suffered in one way or another over the course of the last 18 months, and if the pandemic has taught us anything, it’s that anybody can find themselves struggling financially. For those of us who are able, it might be nice to help out those who aren’t as fortunate.
This might be a gesture as simple as making sure you tip hospitality workers who have been struggling for work throughout the pandemic, or supporting your local stores after a long time with no customers.
If you want to commit to something more formal, you can set up a monthly direct debit to your favourite charity, or multiple charities, or even donate your time at your local food bank or community centre.
This might sound a bit rich coming at the end of an article that’s about financial lessons, but at the end of the day, your parents will tell you that life is about much more than money.
While it’s undoubtedly true that you need a certain level of money to live a comfortable life, and (in theory at least) more money can help you live more comfortably, money for money’s sake isn’t the be-all-and-end-all.
The healthiest way to view money is as a vehicle to help you get to where you need to go and do the things you want to do.
Whether that’s upgrading your car, buying nice things for your kids, or going skydiving off the coast of New Zealand, these things all cost money, but it’s not the cost you’ll remember – it’s the value of the experience.