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What My Parents Taught Me About Money (And Why I’m Super Grateful)

For most of us, our parents are the people who have the greatest influence on us when it comes to how we handle our money, whether we realize it or not. I’ve heard so many tales of people becoming tightwad misers because their parents were big spenders and always in debt, and vice versa. I’ve had many friends who can’t figure out how to handle their own money, because their parents just always handled it for them. Whether the lessons they teach us are productive or not, our parents are the first people we learn from about money – what it means, and how to use it.

I’m incredibly grateful that my parents have always been smart with their money, and they taught my sister and I to do the same. They instilled in me the value of money and what it can do for me early – as well as what it can’t. My girlfriend has often said she envies me because of what my parents taught me. Indeed, I’m incredibly grateful for the lessons they taught me, intentionally and just by proxy.

Where My Parents Started

My mom grew up pretty poor in Massachusetts as the daughter of a pastor. She never went hungry, but money was always tight in their family and they led a no-frills lifestyle. She worked for her own money from an early age and learned how to manage money from her own family’s frugal habits.

My dad grew up in a relatively comfortable middle-class family in Illinois. He went to private school and didn’t have to worry much about money. However, after they got married and moved out to California so he could pursue his PhD at CalTech, my parents had to make ends meet on a PhD student’s stipend as well as my mom’s paycheck.

My little sister and I having fun in the garden…with scissors…

Both of my parents were very lucky to come from families where education was highly valued, and they were encouraged by their parents to pursue higher degrees. My mom got her Bachelor’s degree before getting married, and waited another several years before starting a family. In that regard, I was lucky from day one to be born into an educated family with a solid foundation.

I was born while my dad was still working on his PhD, and my mom only worked part-time after that. They lived frugally, but neither I nor my sister ever wanted for anything when we were young.

“But It’s Not On Sale!”

One funny tale from my early childhood days comes from a time when I was out shopping with my mom. She was great a spotting deals and discounts, and often strategically bought things only when she knew they would be discounted. Often when we went out shopping, I would ask for random items as children do, and she would say “Well, it’s not on sale.” And that was that. If it wasn’t necessary and  it wasn’t on sale, we certainly weren’t buying it.

Years later, I finally told her the effect that had on me: as a child, I literally thought that stores were full of things you were not allowed to buy unless they were on sale. I thought that unless it was discounted, the item was only there to look at, not to buy. I figured my mom had some special ability to know which things you were and weren’t allowed to buy in the store.

We all had a good laugh at that one.

My sister and I, “birds” in my parents’ apricot tree. This post is a obviously a thinly-veiled excuse to post childhood photos.

Taking Risks Pays Off

One of the first lessons my parents taught me about life and money is that taking big risks can pay off. My dad worked for a company for a few years before splitting off to start his own company when my sister and I were still small. Times were tough for a while, but now, 20 years later, his company is very successful and even managed to grow through the 2008 recession.

Even when things looked grim, my parents made it work and it has absolutely paid off for them, not only financially. As a child, with my dad working from home, I was able to have both parents around most of the time. Many other children do not get this opportunity, and it was incredibly enriching for my sister and I, and certainly brought our family closer.

Make Choices, Then Own Them

When it came time to actually give my sister and myself real money to use (still as kids), my parents started teaching us about the power of money and our choices with it right away. There were a few small chores we were responsible for to earn a small allowance, plus other chores we could take on to earn more.

When there was something big we wanted to buy, our parents helped us see how we could save up our allowances, as well as supplement them with income from bigger chores, to reach our goals. One of my proudest childhood moments was buying my very own PlayStation One for sixty-five whole dollars of my own money when I was about eight or nine years old.

When we got a little older, there were naturally more activities we wanted to do and more things we wanted to buy. This was when my parents gave me one of their best financial lessons ever. At 12, I was an active kid, and there were several activities I wanted to participate in: piano lessons, horseback riding lessons, and dance lessons. Of course, all of these cost money, and the prices were frankly a bit out of reach for a 12 year old’s earning power.

My parents realized that, but they also wanted to show me the value of my time and their money. So, each month as allowance they would give me enough to pay for 2 out of my three activities of choice. It was up to me to choose which things I wanted to participate in, and if I wanted it bad enough, I was able to find opportunities to earn more money (hello, babysitting for neighbors!) so that I could participate in all of the activities I wanted to do. They made sure to give me some, but never enough for everything.

Baby me with my wonderful and money-savvy parents.

The Value of Work

This was one smart parenting move. Every month I was given the power to decide what I wanted and how badly I wanted it. Through my hours of babysitting, I learned the value of my time and how much a dollar actually cost me in time. It made me really start thinking about the things I bought, even as a 12 year old. Is that new CD really worth the 3 babysitting hours it would take me to earn it?

It also taught me to be creative. Horseback riding is a notoriously expensive sport, and it was hard for me to earn enough to pay for my lessons myself. So, I put myself to work as a working student at the barn. I did this all through high school to earn my horseback riding time. It had the double effect of getting me free riding time, plus allowing me to learn about all aspects of horse care.

What Did I Learn?

That’s the whole point of this monster post, right?

  • My money is mine to do with what I wish – my parents gave me choices with it early on, which taught me that I really could do what I wanted with it. But when it was gone, it was gone.
  • How much a dollar is worth – since I was earning dollars to spend on things I wanted to do so early on, I quickly learned how long it would take me to earn one, and how much it would buy me.
  • Everything costs money – I saw gas pumping, grocery shopping, I knew the cost of my clothes and my piano lessons. I knew early on that things aren’t free, and as such…
  • You can’t have everything – There were times I had to choose to forego my weekly horseback riding or dance class because of low funds. That was tough, but it taught me that with money, you have to make choices.
  • Creativity can replace money – this was a big one and served me especially well in my college years. Just as I discovered I could work for my horseback riding lessons instead of paying for them, I also learned that in many places in life, a little creativity and DIY aptitude goes a long way in place of having a lot of money to pay for things. This is the lesson that just keeps on giving, seeing as I just completed a DIY renovation with my girlfriend!
  • Saving money creates more money – as I became old enough to understand the numbers involved, my parents showed me how I could put away my money instead of spending it, and explained the concept of interest to me. Bingo! Here I am years later, still an avid saver.
Squinty Flo and Fluffy Lydia, a perennial classic.

As you can see, I’m incredibly grateful for their savvy and frugal-minded lessons about money. As I moved from childhood to adulthood, I found I was often more informed about money than my peers, more able to plan my spending, and less likely to spend on unnecessary frivolities (but I still had fun!). Of course, I was broke in college like everyone else, but that’s a subject for another post.

Anna has often expressed to me her admiration for how my parents raised me regarding money, and I have to agree they did a darn good job. I know that when I have children, I will try to instill the same lessons and values in them.

What did your parents teach you about money? Do you have kids? How are you teaching them the value of money?

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