Social Question

livingchoice's avatar

Did your parents teach you about finances?

Asked by livingchoice (538 points ) June 16th, 2011

I find that most people I talk to about this issue says that their parents never taught them about money. Like the importance of saving and making a budget, how credit cards work, how to save, different investment options. Why is that when money plays such an important part in our society? What are some good ways to teach children about money management?

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42 Answers

lucillelucillelucille's avatar

They gave it a shot ;)

OpryLeigh's avatar

My dad tried….

Neizvestnaya's avatar

My parents taught me vicariously, I learned how not to handle finance from them. It was my grandparents who taught me the very basics of counting money, saving it, it’s relative value in regards to the things that were important and things I wanted. I was always asked to be present when they made a budget or shopping list, the costs of things were not kept from me, not even living expenses. By the time I was a teen then I was confident to handle my own money, bill paying, loans and lending. Thank you grandparents.

Hibernate's avatar

Yes. Saving money and not spending all at once. Not to mention that I was told not to buy all junk ^^
I thanks them in my mind a lot for this.

livingchoice's avatar

@Neizvestnaya wow you were very fortunate. The rest of us had to make many trials and errors and are now in debt :O( thanks Mom and Dad.

jrpowell's avatar

My mom inadvertently did. We got Survivors Benefits from Social Security. We got a check once a month and we were broke in a week. Then she would pawn my Nintendo and the TV and the VCR. Then the next month we would get the stuff out of pawn just to have it go back in a week later.

Now I am super careful with money and know where ever cent goes. And I keep envelopes. I put my daily money in 28 to 31 envelopes depending on the month. I never spend more then what Is in my envelope for the day. But it caries over. If I am going to the bar on Friday I spend less for a few days to pad Fridays envelope. I have done this for years and know I will always have food money on the last day of the month.

Neizvestnaya's avatar

@livingchoice: I’m in my 40’s and have had few friends or acquaintances who got much training or experience with handling and assessing value to stuff which is why I think so many people end up feeling panicked when they join finances to marry or run a household with babies and kids. I’d go CRAZY without lists and a calculator.

JLeslie's avatar

Yes, my parents taught me. It was an informal instruction. I obcerved how my parents thought about making purchases, and they did the exercise with me also when I wanted to buy something. I knew they always paid their credit cards in full. I knew they saved all of the time. I knew they were future oriented when it cam to money. I knew they did not really save for a particular thing, but rather saved all of the time, and then made purchases that seemed right and a good value at the time it was needed. My dad told me many times, money gives you autonomy, independence and freedom. There was never a focus on the things, but rather the security and the power over ones life financial indepence brings. When I used to say I am going to marry someone rich, my dad said, I should do what it takes to make my own wealth.

I had a savings account since first grade (actually the school opens it for you). Any time I ever received money as a gift, I put it in my savings. I saw the interest add up also.

My parents were not allowance people, but when I was in 7th or 8th grade, not sure which, I asked my dad for an allowance. He let me decide how much, and I bought everything I needed with it. That lasted about 6 months I think? Not sure what ended the experiment?

I was allowed to work when I was 14. I had full control over what I wanted to do with the money.

Classes in school taught me about earning compound interest and how money gets money. Classes also taught me paying interest is like throwing money on the street.

erichw1504's avatar

No. I am now poor.

Neizvestnaya's avatar

Do high school kids still have a mandatory Economics class that teaches banking, how to use a checking account, how credit cards work, loans, interest, etc? Ours did and it helped me just in time since many kids like me had been working and at 16 you could legally work fulltime.

RangerRick's avatar

Nope. Big mistake. Married someone who was uptight financially (thank goodness!) but too much of me rubbed off on her.

We are doing it different with our kids. They see our budget, they have their own saving/spending bank to be responsible for. We took a Dave Ramsey class and plan to read up on his information for children. I would link to his site – not sure how.

JLeslie's avatar

@Neizvestnaya Depends where you live. Schools are run locally in America afterall. Kids need to hope they are born into a good school district. But that is a different conversation.

Neizvestnaya's avatar

@JLeslie: All the more reason for parents to buy a cash drawer insert, a calculator, keep grocery bill and shopping receipts and let the kids know how these things get done.

livingchoice's avatar

I do remember a finance class in high school but nothing that really prepared me for the real life. :O)

JLeslie's avatar

@Neizvestnaya I agree. I think that should happen no matter how good the schools are. The problem is look around, so many Americans suck at finances. How can they teach their children when they cannot even do it well for themselves? At least now there is more messages in the media to only buy what you can afford. Dave Ramsey, Suze Orman, and others promoting better financial habits. Still, for so many people they think it is normal to charge items they cannot afford. They get more thrill out of buying a new blouse than seeing money accumulate in savings. They think it is normal to live check to check (amd I am not talking about working poor here, I mean middle class). How come more people don’t know that over 30% of Americans own their homes outright, no mortgage. Or, that around 40% of people pay off their credit card balance in full every month. It is normal, maybe not the majority, but a lot of people do live with little to no debt. I feel like people have no idea that is the case.

Neizvestnaya's avatar

@livingchoice: A wonderful thing about the internet is anything you can imagine (pretty much) has a price listed somewhere. You can build idea files of things you want, pictures of them, details, prices. You can create spreadsheets for budgets, pay most bills online, even grocery shop and bank online.

Facade's avatar

Not in the least. I had a project for my 12th grade Government class where we had to estimate cost of living. I had no clue how much anything cost because my parents sheltered me from knowing about bills and finances. I even got yelled for asking them about it so I could complete my assignment.
Of course, now I live with my SO and we’re handling bills and such, so I know now. But I think they were way off for treating the subject of money as they did.

jrpowell's avatar

Oh, and I learned a bit from the Cosby show.

Simone_De_Beauvoir's avatar

Not really. They did obviously teach me that if I borrow money, I must give it back when I said I would. I still can’t believe how many people do not get this concept.

JLeslie's avatar

@Simone_De_Beauvoir Ditto. Amazing how people don’t get that concept.

forestGeek's avatar

My mother was a accountant and tax preparer, so hell yes!!

I grew up only getting an allowance until I was about 10yo. I think I got a savings account at around 10 as well. From that point on I had to earn my money by doing odd jobs around the house and for neighbors. My mom taught me how to save, budget, track my money and research before I buy things. When I borrowed money from her, she made me pay interest. I may not have appreciated it then, but I sure do now!

Pied_Pfeffer's avatar

Yes, Mom taught us and did an excellent job. She and Dad were Depression Era children who knew how to live frugally and yet when not to skimp on quality. The education started with learning to balance the savings account, how to make decisions on whether to make a purchase or not, and later the ceremony of opening a checking account before heading off to college.

One time, I wrote a check that put the account in overdrawn status. The bank called Mom (small town), and while she covered it, I got read the riot act. Many years later, I was home for a visit, and she sent me off to attend a seminar conducted by her investment adviser. Today, at the ripe old age of 85, still advises us when we ask for financial guidance.

YARNLADY's avatar

Yes, I am fortunate enough to have been born with an ability to understand math and how it works.

wundayatta's avatar

I was taught to save. That’s about it.

Cruiser's avatar

Yes and I still have some saving bonds we bought with my birthday money I just found. I hated saying goodbye to MY money like that at that age but it did teach me the value of saving money born from the hard lessons their parents learned during the Great Depression. Now my kids will be able to tell their kids and grand-kids about the Great Depression of ‘09—‘11—??

jonsblond's avatar

@forestGeek My father was an accountant and worked for the IRS and my parents kept their finances very private. They never discussed it with me. You would think with such knowledge, they would. lol All I knew is that they could buy me school clothes when I needed it and my mom knew 100 ways to cook hamburger and no food was wasted.

What I learned, I learned in high school. My husband and I made sure to not make the same mistake with our children as my parents did with me. We discuss everything with them.

El_Cadejo's avatar

Not really which is kinda weird since my dad is an accountant.

tedibear's avatar

Absolutely! My dad was a banker and my mom was the budget & checkbook queen. They knew where all of the money went and why. I had my first savings account at age 10, which I had sole ownership of. I got a checking account when I started college so that I could pay for books,etc. While my parents never talked about dollar amounts when they discussed large purchases, the rest of the discussion wasn’t hidden.

josie's avatar

My dad taught me how to balance a checkbook, and told me about compounding interest.
He also once made this prescient statement to me. “Interest should be earned, not paid”.
When he died, he had saved quite a bit of money (Which I gave to my ex wife to make her go away)

downtide's avatar

No. My parents teaching me how to handle money would have been like trying to teach someone how to paint when they have neither paints nor brushes.

LuckyGuy's avatar

My Dad taught me the “rule of 72”. Divide the interest rate into 72 and that tells you how many years it will take for you to pay double if you borrow or, have double if you invest it. Borrow $1000 at 24% interest and you will pay back $2000 in 3 years or $4000 in 6years!
Invest money at 5% and it will double every 14 years.

They also taught me I don’t need everything I want and money spent on “stuff” is money gone.
The rest is common sense. Avoid people who spend more than they can afford. Don’t marry a spender. They are bottomless and will bleed you dry.
I listened. Thanks Dad.

cookieman's avatar

My father taught me that the husband should be completely oblivious about the household finances and receive an allowance like a child.

My mother taught me that sitting down to do the bills was an occasion to have a major meltdown, pick a fight with my family and yell and scream.

needless to say, I’m not great with money

JLeslie's avatar

@worriedguy I did not know thenrule of 72, I love it? I always site the 5% in 15 years doubles your money rule (I think it is actually 14½?). I love that rule, I say it every time someone wants me to invest in riskier investments. $1 million by age 50 should easily be $2 million by age 65.

ucme's avatar

“If you break it you bloody well pay for it!” That’ll be a yes then.

LuckyGuy's avatar

@JLeslie It is so easy and helps people think about what they are really spending when they buy something on credit. How much would that money be worth in 30, 40, 50 years when they want to retire? Way more than the price of the “stuff” they just bought.

JLeslie's avatar

@worriedguy I always calculated what I am really spending, but never had a quick rule of thumb. Really good. I don’t have any debt any more, so unless things change I don’t need the clever trick.

LuckyGuy's avatar

How many people think “Oh! No payment until March! I’ll buy it!” Do they think March will never come?
Do they realize how much that spur of the moment purchase truly costs down the line?
The world needs more parents saying, “Really? Do you really need another xyz? Are you happy that you’re spending your money on alcohol / cigs / drugs?”
Fiscal responsibility is not “being cheap”. It’s “being careful.”
My parents taught me well.

LuckyGuy's avatar

@JLeslie By the way, the rule is really (Sqrt of 2)/2 or 70.7 if you are compounding continuously. But 72 is close enough and has a lot of factors that divide into it easily.

mattbrowne's avatar

Oh, yes.

mcbealer's avatar

Frugality, coupons, recycling, buying clothes out of season and on clearance, conserving electricity, examining the quality of garments (how they are sewn/constructed, and the fabric itself) and taking care of my belongings… were all important yet sneaky financial lessons my mom taught me.

chewhorse's avatar

No, and I’ve been struggling ever sense.. Do I blame them? Of course not, no parents are perfect and the future is only realized through after thought. (believe me, there’s numerous investments I later realized was not what they seemed).

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