What did your parents teach you about money?

By Will Chen on 1 October 2007 (Updated 8 October 2007) 50 comments
Photo: iStock Photo

According to a recent study, 96% of American parents require their children to do household chores in exchange for pocket money. At the other end of the spectrum, the majority of children in Cyprus (89%), China (77%) and Slovakia (75%) don't have to lift a finger to earn an allowance.

This study made me wonder how money lessons learned at a young age can impact our financial decisions later in life. For example, do rich parents condition their children for financial success by passing on good financial habits?

What did your parents teach you about money? Did they give you words of wisdom or did they teach you by example? How did their views affect your perception of finances later on in life? If you think their influence has been less than positive, how did you overcome them?

Share your story in the comments section and get entered in a random drawing for $25 Amazon Gift Certificate!

This drawing is over.  Congrats to Debbie M, the winner of the drawing.  Thank you to everyone who participated! 

My own survey among the Wise Bread bloggers produced some fascinating results:

Justin Ryan

Justin Ryan0 - 0 = 0. That's my mom's mantra. It never really makes sense, because she usually uses it to talk about things like an overdrawn checking account, or not having the money for something - what she usually means is 0 - X = -X, as in "If you have no money, and you spend some, you end up in the negative."

My dad doesn't handle money, so all my direct lessons came from mom. (That isn't to say I haven't learned lessons about working hard from Dad.) Mom created a lot of negative stereotypes for me, ones that for the most part I've shed, but still create anxiety for me. For example:

  • Debts are bad, and anyone who has debt is a bad person. That's not true, and I don't think that way about others now, but the thought of incurring debt makes me physically ill, because it's still ingrained in my psyche.
  • Bankruptcy is evil, and so are the people who file for it. I know a lot of people who have had to file bankruptcy, and none of them are evil, just made poor choices. However, my mother believes their all freeloaders trying to cheat their way out of their debts.
  • Risk is a sign of weakness. Anyone with any sense makes conservative financial decisions. Doing anything risky (opening your own business, buying a new car, investing in the stock market) is stupid, and means you're completely ignorant when it comes to finances. I still struggle with making these decisions, because I know she's going to have a mouthful to say.

Those are just examples, there's quite a bit more I could say. However, I did learn some positive things, like that working hard pays off, that there is no reason to pay bills late, and that keeping a check register is a good idea (I still don't on my general purpose account, but I don't tell her that.)

Julie Rains

For starters, my parents and my husband's parents were kids during the depression; my mother-in-law's family were better off than most because her dad had a government job (he worked for the post office).

A big change in generations was that the older ones tended to have pensions or what is called a defined benefit (something you can count on); my generation (and those to come) relies on 401-ks and other types of retirement programs (stock programs, IRAs, etc.)

My dad showed me how an amortization table works when I was a kid. His mortgage interest rate was 4%; at some point I asked him if he didn't want to go ahead and pay off the loan balance. He said, "the bank would love for me to do that" because interest rates at the time were much higher. Hmmm. The other big advice he gave me was to save more than he did. (duly noted)

My family is somewhat business-oriented. My oldest sister, who used to sell pieces of candy at school to make a profit (before teachers learned about it and stopped her) was a business major at UNC-CH (though, unlike me, she graduated #1 in her class) and earned an MBA-Finance at Northwestern University. My dad had an econ degree from UNC-CH (he attended on the GI Bill) and I got a business degree there. My other sister is a speech and communications person but married to a CPA. My mom earned a bachelor's degree and was an RN; her family couldn't afford to send her to school but some family friends were kind enough to pay for it. So numbers and such run in my family.

ARTICLE CONTINUES BELOW

My in-laws are frugal (like my parents except when it comes to coffeemakers) but my father-in-law has been more of an investor. He watches CNBC every day and was a big fan of Louis Rukeyser; he manages a stock portfolio and also has real estate investments. I did get to help him out once in regard to finances when his company's pension plan was bought by another company; he seemed unsettled by the news but I told him his pension wasn't any more or less safe with his original company. I think that helped a bit but it may have been my imagination that anything I said influenced him at all. My mother-in-law worked after the kids were in school, as a nurse at the state mental health facility; all of her health insurance is paid by the state now and that was a smart move.

So, I've said much but basically live modestly, save and invest are the messages I've heard; that and do the best with what you have.

Will Chen

My parents were deeply distrustful of investments when I was growing up. They believe you should work until the day you die and put every penny into the bank. Even putting money into a bank was a bit of a risky move for them. If they had their way, they would probably build a giant vault at home to keep all their money in and swim around in it Scrooge McDuck style.

While my parents' investment strategies have matured over the years, their initial deep distrust of all investment vehicles strongly influenced how I look at finances. Even today I cannot bring myself to do anything riskier than CDs and index funds. I haven't looked into a giant vault yet, but I haven't ruled it out, either.

Sarah Winfrey

I care about money because my parents cared about money. Really, it's that simple. When I was growing up, my parents both showed me and taught me that my money and how I chose to spend it was important. They gave me an allowance, but they both encouraged and reminded me to save some. They helped me choose toys that I wanted (and could eventually get) to save towards. When I was old enough, they got me a savings account so that I could get my bank statement in the mail each month and see my money making money (and so I could feel like a big person, and associate that "grown up" feeling with "saving," I suppose). Later on, they co-signed so I could open a checking account and taught me how to write a check, use my ATM card, and balance my checkbook every month. Read more

Linsey Knerl

My parents never talked about money. My father, however, drilled us daily on his most important piece of financial wisdom.

"Never trust a bank."

I started hearing it when I was 4, and I have never forgotten him saying those four words.

[Will's note: No wonder Linsey and I get along so well. We're united by our deep mistrust of evil banks!]

As you can see, what our parents taught us about money had a tremendous impact on our lives. What kind of lessons did your parents share with you?

Share your parental money lessons in the comments section and get entered in a random drawing for $25 Amazon Gift Certificate!

Deadline to enter drawing is 10/6 midnight. Don't forget to enter your email address in the field provided and only one entry per person.

This drawing is over.  Congrats to Debbie M, the winner of the drawing.  Thank you to everyone who participated!  

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Guest's picture

I don't recall being taught anything about money, so it took me until I was over 40 to get anything right. I didn't teach my son very much, either, so I am working on that, even though he is now an adult.

My parents are very good people, they just didn't teach their children about credit ratings, interest, etc.  One of my sisters is amazing with money; I guess I just didn't learn as fast as she did. 

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SMB

It's nice, in a way, to see I'm not the only one whose parents really didn't teach anything about money. Thank goodness for the financial blogosphere, which provided a launchpad for my real education!

Guest's picture

The good things my parents taught me are to keep a good credit score, and use credit to keep it healthy. They also taught me diligence in keeping up with bills and bank balances. These lessons have helped me tremendously.

The bad things they taught me are that you don't have to pay your credit bills off as soon as possible if you want more money in your pocket now. I wish they hadn't told me that in college - I'd be in less debt now! They also taught me that if you want it really bad, you should buy it now and pay for it later, even if you don't have the money (instead of saving until you can afford it). Thank goodness I've "un-learned" those lessons.

The ugliest thing I've learned is how scary it is to be facing retirement and only have a few measly pensions and nothing - not even an emergency fund - saved. In their fifties, they have no plans to retire at all. They figure they'll work until they die. I start my own retirement contributions to a 401K this month.

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ellipsisknits

I'm a bit lucky here in that my father works in finance, so I can get very technical free advice from him. Most of what I've really learned is a lot simpler than that.

The biggest lessons my parents taught me were 'save for things before you buy them, not after', (i.e. save up and pay cash for your car/sofa/kitchen rather than financing it) 'max out your 401K', 'the stock market always goes up given enough time' and 'don't treat a credit card like a loan any more than you do with a check' I've yet to (intentionally) run a balance on mine.

Needless to say, this puts me more than a little out-of-sync with current spending culture ;)

When we got older, we got a monthly stipend (not tied to chores) to buy things like clothes and toys, and eventually gas. We were encouraged to save, but it wasn't really enforced. I always saved anything anyway, just in case I really wanted something later, my sister always asked for advances and spent it as soon as she could.

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Whodathunk

Being frugal first gen immigrants, my parents taught us a lot about not spending what we didn't have and being thoughtful about our purchases. At no point did I think it was ok to not pay off a credit card in full. When I was 15 my dad opened a mutual fund for my savings and dumped them in there. Then when I got to 18, he promised to match every dollar I stuck in a Roth-IRA. I didn't get around to taking him up on that until I was 24.

While my parents taught us a lot about spending and saving, they didn't teach us much about earning money. Because they wanted me to do well in school, they paid for everything until I graduated from undergrad. I didn't end up learning to work diligently until I got to grad school and being smart wasn't enough.

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joewatch

My parents taught me a lot about money, which has helped me get to where I am today. Of course, I've made a lot of mistakes on my own, which helped reinforce some of the lessons.

One of the best things my parents did for me was helped me open up a brokerage account with $10,000 (of their money) when I was 18. They started me off learning how to invest by choosing 4 mutual funds and putting the money into them (Schwab 1000, Barron Asset Fund, two others that I can't remember now.) They also gave me books to read, like Ben Graham's Intelligent Investor and Bill Bernstein's Intelligent Asset Allocator. Basically, it was a gift of $10,000, but the rule was I wasn't allowed to take the money out. I was allowed to make any transactions I wanted. Discussing my investment decisions became something we did (and still do) on a regular basis.

Some of the good things that came out of this:
I learned how to analyze mutual funds as well as stocks.
I learned about the basic risk profiles of different asset classes.
By starting me early, I was prepared and confident to invest my own money, and larger amounts of it, as I got older and earned more.
I was inspired to continue my financial education.
I gained a lot of practical experience with different types of securities, including microcaps and IPOs.

I'm 33 years old and have made over $750k investing my own money in securities at this point. I have never accepted any offers of gifts of money from them since that first $10k (except for a small gift at my wedding.) My parents told me when I was young that rich people don't work hard for their money; they let their money work for them. I'll probably do the same thing for my kids when they are old enough.

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Emily

Pay 10% of all you earn to the church if you want to be happy.

Other than that? I don't remember much. I do remember being in high school and my mom needing to borrow a couple hundred dollars for a few days every so often, just in case all the checks cleared the same day.

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plonkee

I'm sure my parents tried to teach me lots of things, but the main thing I really remember is 'always pay your credit card off in full'. I must've heard it a thousand times.

They each have shares and savings accounts and things but I get the impression that they don't have a structured portfolio. I imagine they will have reasonable retirements through a combination of inheritances, final salary and state pensions. I am counting on none of these things.

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Rebecca

My parents taught me that real estate was the only safe investment, because if all else failed you could go live on it.

I have now watched my mother struggle since my father's death and have decided that real estate (ie my house) is a good investment but that it is just 1 part of a truly diversified portfolio and hardly sufficient in and of itself. While most everything my father bought has appreciated, it is about as illiquid an asset as you can get, and in the long run that has meant trouble for my mother.

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sassyfras

My parents always told me to live below my means, pay my credit cards in full every month, buy a house and pay it off early. Indirectly, I learned that a civil service job may pay less than the private sector, but the benefits may make up for that, depending on your priorities.

My parents, who were a secretary and mid-level human resources manager, lived modestly but still had fun. When I was a kid, we ate out at a local casual restaurant once a week and took a driving vacation once a year. So, although I knew they were saving, we also did some fun stuff. I also learned the joys of the public library. ;-)

Their choices allowed them to retire at ages 49(my mom) and 55 (my dad). Granted, they have pensions, but their savings allows them to have a higher standard of living than they did before they retired. They have gone to Europe four times over the past 12 years-and they took my husband and me on two of those trips. Most importantly, they now have freedom to do what they want. They're taking 5 days to go to a flea market in Texas next week just b/c they want to. They've done similar things in the past, such as going to a good museum exhibit in the next state on a Tuesday because that's when the crowds are thinner.

I am grateful that they set a good example for me when I was young and continue to do so now. I am also immensely grateful that I don't have to worry about supporting them now.

In sum, my parents taught me the joys of savings, free fun, and deferred gratification. I am very, very lucky to have had them teach me so much.

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ammbd

My father never talked about the (painfully obvious - missed meals, server dodging, etc.) lack of money for fear what little there was would vanish.
My mother seldom buys anything at all (she recalls watching her mom bounce checks to feed the family, skipping the doctor, etc.) - even necessary things - until she absolutely has to & wonders why everything is so expensive.
Neither could afford to give my sister & I an allowance so there was no practice experience to be had there.
My ex's family was no better with finances for similar reasons.
Most of the people we knew growing up weren't much better off so I think we all assumed monster debt for life was normal.

Needless to say, when we wed didn't any attention to finances & paid dearly for our ignorance. Going into panic-paralysis-denial every time we looked at the finances did not help :|

Most of what I learned about finances I learned from a good friend after my divorce (other issues, not so much $$). Useful data & a good example at last! Now if I can just dig my way out of prior matters. . . .

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ryan

my dad taught me simple math tricks. 14 x 12? its 12 x 10 and 12x 4.

i was always quizzed on math growing up, from a very early age. this made me very aware of how much things cost, as i was always trying to figure it out.

this helped greatly (finance degree) and i still figure everything out to this day.

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stardanced

I was constantly asking my father to buy toys for me when I was little, and he would almost always reply "save your pennies." He taught me that it's better to save for big purchases instead of buying them without thinking--something that has really helped me now, when I'm saving for things that are a lot more expensive than a new Barbie.

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Debbie M

What Mom taught by example: Cooking and sewing are appropriate activities. It’s good to live near a library. It’s okay to apply for food stamps (and time consuming). Rely on your company’s retirement plans as little as possible (moneys kept disappearing each time her company got bought out.)

What Dad taught by example: Auto repair is an appropriate activity. It’s good to live near a (free) swimming pool. Being optimistic about money that’s coming in can lead to cash flow problems. Really nasty ones that can lead to things like no electricity, eviction, and the IRS raiding your wife’s bank accounts. (Note to Will and Lindsey – if my mother had had her money in a vault, she’d probably still have it today.)

What I specifically recall learning from them: How to open a passbook savings account (are there such things anymore?) and thus the wonders of interest accumulation. Just because you have money doesn’t mean you need to spend it. (I thought I had to when I was on a field trip to the zoo, but they didn’t have anything I really wanted.) As long as there are chores to do, we all get some; as long as there is extra spending money, we all get some. And the family mantra “We can’t afford it.” But I also learned that the most important things are to be good and be happy; money isn’t all that relevant after a certain point.

Also, they were pro-education. So they were supportive while the schools taught me things like how to do math, how to comparison shop, how to learn by reading (which is how I learned to balance my checkbook and to do laundry), etc. Also, cash was king (followed by check-writing) when I was a kid. I never got sucked into thinking as though a credit card was sort of like found money.

What I wish they would have taught: I rarely had an allowance, and when I got one I usually saved it. It was quite a while before I figured out that some things you want are so cheap that you can just have them, even if you are pretty poor. I learned that quickly on my own, though.

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Megan

My parents taught me that there is good debt and bad debt. It is ok to go into debt for your education and for your home. But pay it off as soon as possible. Vehicle debt can be ok, but only if you need a car, and never get something more than you need. If your car works now, but you want a new one? Start saving, and when you can buy it, then get it. Not before. But everything else? Don't buy it unless you have the money.

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Andrew

My parents taught me not to make the same mistakes that they made. When they first got married they financed their car, their furniture, everything. It has taken half a lifetime to pay everything off and they warned me not to be so foolish and to actually save up and only buy what you can afford.

When I was in High School my parents paid me a "salary" of $100/mo, but they required me to buy my own clothes and budget my money if I wanted to go out to eat with my friends. It was a great lesson for me.

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Anastasia

My parents were awful with money. Partly because they had six children, and partly because they just didn't know how to spend it. They would blow it on firvolous things, and then the electricity would get shut off for an unpaid bill!

For a while, I lived this same, haphazard lifestyle, until a friend of mine showed me a better way. Bargain shopping, for one and smartly spending the money where it needs to go rather than buying fast food or other frivolous things.

My parents wanted to get whatever they wanted whenever they wanted. I've learned that, through patience and smart spending, I can get what I want too, AND keep the light on! :)

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Gronilot

I had no idea about finances growing up. Money was rude to talk about and none of anyone elses business. I had no idea how much money they made- and how they handled it. I had to fill out a form to apply for a pell grant for college- and one of the blanks was for your parents income. I asked my parents what their income was, and was told it was none of my business. I finished the application, addressed it, and later they filled in the amount and mailed. Apparently they made too much, as I did not qualify for the grant.

One semester I took Russian (5 credits) and got my first "D"- and was then disqualified for my student loans for the next semester. I had to borrow money from my parents to continue college but had to sign a contract and pay interest. They did pay for my car insurance while I was in college, and supported me emotionally, and encouraged me to stay and finish my degree.

Starting from the time I was about 13 I got all my school clothes money in one shot, so I could choose to by one or two fab outfits, or enough "regular" outfits so I didn't have to do laundry every other day. The first year they did this I learned that looking great for 2 days of the week, and wearing last years clothes the rest of the week wasn't all that fab.

When I got to high school I also got quite a large allowance for the time (Early 80's) $10 a week-- and my friends were initially jealous, until they realized that that was it- I paid for all my clothes, movies , yearbook, school activities, uniforms etc.....

Money is still a very touchy topic with my parents- they obviously were trying to teach by example- and letting me manage my own budget at an early age- but what I learned was that money was something emotional, secretive, and mysterious.

I do have to say, that they recently came to my rescue financially after my husband left, so I could hire a lawyer. There has been no mention of when it is to be paid back or interest rate- and no contract was demanded-- and I will pay them back, but they are last on my list after credit card debt is paid off. They also are encouraging the kids and I to move in with them until I am on my feet financially.

So synopsis: they had good intentions, but the baggage that went with the lessons is heavy.

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ryan charles

this was by far the greatest thing my dad ever taught me.

most people (save money/get a windfall) and get $10,000. Then they buy a $10,000 car.
i take $10,000 and use it as a down payment on a single family home that generates $125 a month in profit.
i then go buy a $10,000 car and use the property to make the $125 payment.

changed the way i did everything, forever.

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Jason

My parents taught me absolutely nothing about money. Probably because they don't know anything themselves. I pretty much have done everything that they do except backwards.
Everything that I have learned has come from study, Dave Ramsey, and from Larry Burkett. In a few words I have learned everything because of God's grace. My family is horrible with money and there go I except for the grace of God. Praise the Lord!
But now I am determined to teach my children. My three year old girl is waiting for her money to "grow" so she can buy another baby doll. She is learning that work+time=monetary success. My family tree is changing:)

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Jess

I grew up in a single parent home where my mom taught me all wonderful life lessons. She worked hard to support me and tried to raise me as though I would never think our family was different or poorer than others. However, I look back now and realize all the things she was trying to shield me from have made me so much more financially independent than most people I know.

One of my major memories regarding money issues could be classified as budgeting. My mom budgeted by creating an envelope system, where each envelope would have the name of the bill on the outside, and the dollar amount that would be due at the end of the month. Every week when she got paid, I would sit with her and 'help' her distribute the money between envelopes. I quickly realized then that there was usually very little left over much else. Sometimes, money would have to get distributed for other things if cash was short. I also realized then how much my mother had sacrificed over the years to provide a good life.

Not only did this lesson teach me to budget my money well and appreciate the sacrifices my mother made for me but it also made me recognize early the difference between needs and wants, which usually helps me think twice when shopping!

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CHB

Gronilot described how my parents dealt with money around me: it didn't exist, and they didn't talk about it. I never learned about credit cards, interest, investing, retirement, loans, and the point of savings until I started working in financial aid and finally realized how much in student loans I had unknowingly signed for in college. When I had money questions my parents' mantra was, "don't worry, we'll take care of it" (which I apparently took to mean, we'll pay for every penny of college so pick any school you want regardless of expense - and I obviously neglected to read the fine print of my loan papers).

However the invaluable things they did teach me were about frugality: using coupons, cooking healthy meals at home, (and baking deliciously unhealthy desserts), freezing and canning excess food, owning one car, and most importantly the value in hard work and appreciating what you do have. These habits will stay with me through life and I'm grateful for them - but even more so now that I actually know what to do with the money I can save.

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Robert

I had two very different lessons on money from my mom and dad.

From my mom, the greatest thing I learned was about optimism and giving generously. We didn't have a lot of money, but whatever we did have, we would share with others in need. Not necessarily donating or charities, but with friends and family as well.

The other piece of advice I take away from my mom is that you can always make more money. It's not the best advice, and got us into trouble a few times, but its a nice concept to not keep your money saved up forever without using it. Spend it once in a while, you can always make more.

From my dad, I got a very strict sense of fiscal discipline and quite a bit of math. He had setup college funds for my sister and I when we were kids, and he would show us how they would grow using compound interest. Also, he explained what an IRA was, and how if we invested the maximum ($2000) when we turned 18, and nothing else, how it would grow until we retired.

I didn't end up investing in an IRA until I turned 23, but I've got a fond love of spreadsheets to calculate exactly what's could happen to the money I save and invest. And I know how to throw a party every once in a while with some of that money!

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Jessica

I learned a lot from my parents, some of which was directly taught to me, some indirect.

Both of my parents encouraged me to save my money, and my dad gave me my first bank probably around four or five, about the time I got my allowance-25 cents for making my bed every day. Each year on my birthday I earned a raise and had to do extra chores to get my allowance. I also learned to save money for the special things I wanted that were outside my parents' budget.

My parents' also stressed taking care of what you owned, no matter how expensive or inexpensive it was. Working hard at whatever I did was also stressed-my dad constantly said "any job worth doing is a job worth doing right." Often that meant jobs he thought were worth doing, so I found that statement annoying. But I understand what he meant the older I got.

I started babysitting at 12 and got my first job at 15, which was driven by my desire to take care of myself as much as possible (especially at that age). I hated relying on other people to make things happen, and I did not like asking my parents for money. My parents, especially my dad and especially during some of the leaner years, did not just hand over money to me without a lot of questions or some work on my part. Having a job meant I could buy the things I wanted, no questions asked. The savings bit stuck in my head though and I saved some portion of my earnings too.

My parents were always the leaders of the family but my brothers and I learned that family meant teamwork, and we all needed to care of each other the best we could. For me that included being able to take care of my own needs-which actually drove my mom nuts. As a teen, I would buy my own school supplies and insisted on buying my prom attire, which was something my mom very much wanted to do for me. I understand now how important was to my parents (especially my mom) to take care of my needs, but I was really enamored with being in control of my own life. I also loved being generous with the people I cared about and still have an easier time buying a present for someone before buying myself something.

That sense of wanting to be in charge of my own life is what made my pursue learning more about personal finance...which leaves me where I am.

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Jennifer

My dad said to me when I was a child, "You'll never have anything" because I liked to spend any money I had. He was right. I don't have much and despite that, I still want to spend money.

He was very proud and hated to borrow from anyone. I am not so proud, but I still am ashamed to have to borrow money.

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Collette

My father and mother were foreign service employees, we were in so many different countries over my school aged years, we had live in maids, a lawn service, a live in cook, a nanny. We got everything we wanted except cars for our 16th birthdays (we were overseas then and couldn't drive overseas). There wasn't allowance. If we wanted something we asked Poppi for $ and he gave it us. We didn't do much of anything for ourselves except school and make light snacks and the like after school etc.

Needless to say can you say "CULTURE SCHOCK" was an understatement when we came back to the States, a) I was going into college (community for the first two years then U of MD for the last two. My major - Theatre -- Because my artistic ambition was not to be quelled by practicality of a trade...- b)I never paid for anything and therefore had no idea how much things were. On top of that, when given my 1st car, two days before my parents were leaveing again to go to Turkey this time, and after having driving lessons the minute I returned to the states, I didn't even know where the gas tank was because there was no way my father was having either myself or my sister pump gas...

When staying with my aunt that year, one morning I came downstairs and she yelled upstairs"Make your bed before you come down" ... I balked... I yelled back "I don't make beds, I don't know how"... She promptly walked me back upstairs, we made the bed and she said matter of factly - "THIS is not a HOTEL, I am NOT your maid and you WILL learn to be a functioning woman this year."

I quit school 3 months after I started because the way I was used to living was not going to continue with me only having a p/t job and going to school. I left the theatre ambitions at the door. My sense of entitlement I still have to squash when it rears it's ugly head. I work in telecom now, have made so many financial and life mistakes, and now at 40, a single mother to a 16 year old daughter - I am still just trying to keep us ahead and teach her the RIGHT WAY to do "LIFE". She gets an allowance of $40.00 a week which covers her dues to Thespians and movies and clothes and lunche sout, she doesn't have a car either, No Theatre kid here, she is going to be a forensic scientist, a medical examiner.. and is already applying to Florida State University in Tallahassee --- The hard lesson my parents taught me.... sheltering your children from "LIFE" is catastrophic to their well being..

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Que Sirrah

I swear I knew about credit scores by the time I was 7. Ok, 8 tops.

The most important thing in my parent's financial empire has always been maintaining perfect credit.

I grew up in an isolated, rural community and my parents worked the jobs available to them, which were usually seasonal, very physical and low paid. Our income, particularly in the winter was supplemented by things like chopping and delivering firewood, or tearing down old barns and selling the lumber to folks from the city as "old growth". How's that for ingenuity?

I was always aware that money was a scarce commodity. Therefore, credit funded a major part of our life. Its how we got all "nice things" and Mom made sure we knew it. But Mom had a mantra (or a momtra?) about credit; Never get more than you can handle, pay it off like a religious duty, and negotiate, negotiate, negotiate to get yourself the best deal for what you are financing.

I was present at every single car deal my Mom ever made until I was 16. She wanted my to see how tough it was, how long it took, how to stick to your guns. Plus, having your kids with you is the perfect excuse to walk away from a pushy Salesman! I remember loathing it as a kid, but that experience has proven to be invaluable every time I sit down to negotiate anything.

Oh, and bouncing a check is one of the Seven Deadly Sins in Mom's book. Its just not done. Another thing she talked to me about from a ripe young age. They used to hang the bad checks on the wall behind the register in our town's little grocery store. I can remember Mom buying me apple juice and pointing those out to me. She said "You won't ever see our name up there".

Their model certainly wasn't perfect. I have had to teach myself how to save. Living within your means (without revolving credit) was a bit of a mystery. Yet, I am always amazed that what was such an on-going lesson in my formative years, most kids dont learn about until they are teenagers, if at all. My husband managed to ruin his credit for years to come in just 12 months after he turned 18. Mostly because he didn't know any better and no one bothered to tell him. I was very fortunate to never be able to claim such ignorance.

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Guest

Initially when I read the theme for this thread my first thoughts were to recall specific instances of financial discussions with my parents. But it didn't take long for me to realize that it wasn't the specific lessons surrounding money management that ultimately turned out to be the most valuable financial education they gave me.

It was the lessons about character and personal responsibility that lead me down the right path. Their encouragement of critical thinking and developing a decision making process that would impact all areas of life, not just the finances, that proved invaluable.

High credit card debt, living beyond my means, investing in things I didn't understand, chasing get rich quick schemes.... even if my parents had never discussed specifics about personal finance with me I would have avoided these major errors because they are highly irresponsible. They are actions I would never take because they taught me by example how to live life with character and common sense.

Kind of funny to realize in the end it wasn't all the research, all the reading I've done to learn about the financial world that has contributed the most to any success I have met with. It was the kind of education you can't get out of any book that has served me best.

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Lisa Jenkins

My mom grew up pre-civil rights (and we're african-american), so money was always tight for her family. She started working at an early age (as a domestic) to help her family make ends meet. Needless to say, my mother is frugal (to put it nicely). She taught me what it's like to struggle when money is tight. My mother has always had that "i'm poor mindset", even though now, she has quite a bit of money. As a result, she rarely spends what she has, won't invest in anything where the principal is at risk, and complains about having to pay for everything even though she can more than afford it.

Until I got a job in high school, my allowance was no more than $10 a month. If I came to her for more money, I faced an angry interrogation (felt like an IRS audit) and was forced to account for where each penny of the $ went.

When I went to college, (my first week there) I was given $100 (to "pay for my books"). Turns out my books cost $500, (for which I made of the difference by using my savings). When I went to ask my mother for more money -- interrogation. I thought my mom was nuts.

The effect of that is that I have always worked and my entire career has been about making my life "comfortable" (aka never having to struggle financially). I have seen first hand what financial stress can do to you, turn you into a different person. I never want to become that.

I can make $5 last a year, if I have to. But I NEVER want to have to.

I save for "a rainy day", retirement, etc, but I also spend money to enjoy my life. I don't hoard money like her. I'll spend some of it, to travel, or for comfortable shoes, things she'd never do. I don't complain about having to pay my bills or about my debt. I PLAN for expenses. I budget for them and my budget always has money for frivolous spending worked into it.

I learned about stock market investing thru a job in college and since then, I invest religiously.

I'm learning about all things finance and how to make my money work for me (instead of just me working for money) and I'm slowly teaching what I learn to my family.

I guess I did not fully inherit my mother's perceptions on money because her hard work shielded me from knowing what it was like to not have. She provided well for me and because of that, I can focus on just being comfortable instead of on surviving.

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Dr. D

My parents gave me $1 for a weekly allowance, and then insisted I give 25¢ to the church. They were trying to teach me charity, but that isn't the lesson that stuck.

Instead, I learned that everyone will be happy to impose their values on your earnings, so decide what's important to you and that's where the money should go.

Whether it's a tithe or an iPod, no one has the right to pull hard earned quarters from your hand.

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Bloggrrl

They taught me that keeping up appearances is more important than financial security. Fortunately, I didn't learn that lesson well.

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Cam

We are walking along the street, and my mother picks up a quarter and hands it to me. "Here" she says, but I look at the quarter and say 'No thanks'. "It is free" she says, and 'No thanks' I reply. Then she asked me, "If I offered you a dollar would you take it?". "Yes" I said. "Well, a quarter is 1/4 of a dollar, and it is being offered to you by someone you trust, for free". So I took the quarter, and learned not to turn up my nose at small gains.

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Vicki

My parents taught me nothing about money, other than we didn't have enough of it, and if we did have it, it was okay to spend it. So, growing up, we never went on vacation. My family's motto was work, work, work. Vacations and doing things just for fun were a waste of money, and everything we had went into living expenses, we had no savings, and having money was something evil. The only home they ever owned was foreclosed on by the bank because of poor money management.

With that stellar example, I'll admit to making a lot of mistakes with money, including charging too much on my credit cards and landing myself in a lot of debt. However, I got to a point in my life around my mid-twenties, where I realized I was doing the same things my parents had done, and I didn't want that.

So, I developed a systematic plan to pay off all my debts. I paid off my student loans, most of my credit cards (I still have a balance on one) and made it my goal to be able to pay off charges on the credit cards monthly.

I'm learning to budget and track my expenses. I'm not perfect at it, and I haven't found a way to curtail impulse spending, other than avoiding the stores.

I have an emergency savings plan that I make a deposit to monthly. I just recently got a promotion at work which includes a sizable raise, I'm planning to continue with my current budget and salary, and siphon the extra money into my savings account.

I'm trying to save money to buy a home, although I haven't quite decided where I want to buy.

I'm hoping to teach my son some better lessons about money, than just we have it, let's spend it. He's at the age where when he gets money, he wants to buy something. He's only 10 though, so we've got time to work on that.

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my story is about the same as yours.

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My parents really didn't teach me anything about money. They were always hard up for money, and never talked with us kids about money or budgeting.
As kids we were given an allowance of 50 cents a week. Mom kept this allowance in a coin purse in her purse. We were never taught how to save the money. If we wanted to buy something with our money, we still had to ask her. All to often though, she would borrow from our money and have to "pay us back."

I did learn in church that we are suppose to tithe 10% (or more) of our income. Never once did I actually see put anything in the offering plate. At one point, I even mentioned to mom, that they never donate at church. Her response was that I didn't know what they did in Sunday School. My response was that her actions (what I see) speaks louder then anything she said she did.
Much of what I have learned about budgeting has been in my adult life. Most of that has been in the last couple of years since I started studying John Cummuta and later Dave Ramsey.

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Wil

My parents didn't teach me about money per se, but they taught me a lot about life and I've been able to benefit from what they were able to teach. After years of being a professional, I could teach them about money, but I wouldn't dare! Having raised seven boys, they wound up doing pretty well.

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Kevin

My mom became a financial adviser late in life, a bit after she realized she might not have enough to retire on. So because of this, she's drilled it into my head that i need to save for retirement while i'm young (currently 25). She even gives me these projections of how much net worth i'll have when i'm 65 if i save certain amounts now. "Max out your Roth IRA, 457b(government), savings acounts, etc..." she says.

The second thing she drilled into my head was not to keep a balance on my credit card. Thankfully i listened to her on this one.

Third thing, like a couple other posters, she insisted to tithe 10% to my church.

Lastly, she hates paying taxes, so putting money into retirement, and charitable contributions reinforces this mentality.

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We grew up in Oklahoma during the early 80s. The oil boom lifted many families into financial wealth they had never experienced. At the time, my folks owned an oil equipment company. I remember as a kid savoring some colorful if not extravagant birthday parties and riding along in a fancy car when my mom took us to school. Then one day it ended with the oil bust. Texas and I'm sure other local families were impacted far worse. Yet the effect on our family made its mark: living on credit cards, borrowing from friends, enduring palpable tension.

In the end we came out on the other side with these financial lessons carved out in my mind forever:

1) What goes up must come down whether it's a raging industry or market. Prepare accordingly;

2) The risk in owning your own company has endless reward including financial gain. Yet in that pursuit, do not risk what you can't afford to lose;

3) Discipline spending even in the face of extreme financial excess.

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Alya

My father insists that everything you buy should be cash! Otherwise save for it! He always told me not to be a borrower nor a lender, the risks are great on both. He taught me what a job is, and how you learn to keep it. He taught me why banks exist...and why I should never do something my gut feeling would not allow me to.

My mother taught me to cook all my meals, even if I am going on a road trip. My best memories of my chilhood were meals my mother prepares and we enjoy them as we are traveling. My mother never allows us to drink anything other than water, juice and milk. If we wanted french fries, she makes them. If we wanted burger, she will make them for us. I will always appreciate the love she gave us through all those healthy meals. I am doing the same to my family today.

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seth

first off: i love my parents very, very much. my mother and father, despite having a pretty rough go of it, managed to raise and put three relatively sane kids college.

having said that i now must say this: my father is completely crazy when it comes to money, and, because of this, coincidentally taught me to do the opposite of whatever he did. he's not "mad genius-crazy" when it comes to finance, but more like "tinfoil-wearing-toenail-clippings-saving-conspiracy-nut-crazy." he considers the stock market gambling, but loves spending money on gadgets he thinks will just take off... things like laserdisc players. our family moved to the silicon valley in 1984 with enough money for a substantial down payment on a house, but my dad decided not to because he decided it was too risky an investment, that the real estate market would completely fall apart. while that may be coming true in some places, i still can't afford to buy even a studio apartment in my hometown because the prices are so high. so what lessons have i learned by watching him? here are the biggest i've learned by watching my dad do the opposite.

* don't keep buying stuff with credit
* save as much as you can for retirement
* the stock market is not necessarily gambling. there are smart ways to make your money work for you.
* investments are not for getting rich quickly, unless you already have money to burn

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j

My father was an accountant (owned his own business) and also was a government treasure. He didn't teach me much "directly" - but the effort he put in (working two high stress jobs and doing well in both) taught me the value of hard work. I have a good work ethic.. if you want something, you have to work for it.

Secondly, he taught me to network - to build connections. He was very 'easy' with his money. He buys everyone dinner and drinks and I guess he spends a lot per year on those types of things; he also has a lot of loyal friends that he can count on.

He also taught me the value of a dollar. When I was 16 (and legally allowed to work) he gave me a job under the condition that I had to support myself.. buy my food, clothes, etc... when you're a kid that is stuff you don't think about since it's all "free" from your parents, but working minimum wage to support yourself shows you the value of hard work and what a dollar is really worth.

He also taught me how to think of money in terms of effort instead of terms of numbers. If I want that new video game, what does it cost in terms of effort I have to put foward instead of money. For example: Is that video game really worth 10 hours worth of work? An entire days labor for one game? Helps you think of things differant in a differant way.

Also he made me put back %40 of everything I earned into savings. It's hard to do; for sure - but he always told me that the way to get ahead was to invest and that trading time for money won't get you out of the 'pay check to pay check grin'. The only way out is having your money work for you; not the other way around.

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peggy

As strange as it sounds, my parents stressed I should always have some cash in my wallet. My mom's logic made sense- since I often went into NYC with friends on the weekend, I should always have money for a cab or other emergency situtations. And yes, mom always knows best, I actually had to shell out for unplanned solo cab rides a couple of times =)

My dad's logic was that it is safer to have some cash on hand in case you get mugged. His sister (my aunt) and her roommate were mugged at gunpoint during college. She only had $20 or so, but the mugger took what he could get. There was another incident on campus where the mugger beatup the victim because he didn't have anything in his wallet. Not sure if my dad's thinking makes sense, but I hope to never have to find out first hand!

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chris

Well, my own parents seemed afraid of money - that there never would be enough, or that it would all disappear overnight. Maybe that comes from being farmers. I don't know. They weren't risk takers and they discouraged most things I wanted to do or try, "because it cost too much!" What I did learn was from my friend's mother. I was debating about how long to stay out on maternity leave and she was there when I was speaking about being torn over my decision. Quietly, she said, "You can always make money, but you can never buy back time." That sealed the deal and I was off on a 10 month leave. And during that time I got creative about my finances, learned to use ebay to its fullest and never had a care in the world - except about going BACK to work!

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Linda Laurents

My parents lived through the Great Depression, so they taught me to be a SAVER. No matter how little I earned throughout my life (I'm 65 now), I always saved part of it.

They also taught me to be happy with little. My mother once asked her grandmother why she wore the same black dress every day. "Because I like this dress," replied my great-grandmother. Mother told me this story many times to illustrate that happiness is not getting what you want, but rather wanting what you have.

My father taught me the old adage, "Neither a lender nor a borrower be." I have made a few enemies along the way by refusing to lend them money when they needed it and I had it. Tough luck. And I've never borrowed money from friends or family. I have had house notes and car notes in my younger years, but not now. No indeed, not now!

Linda Laurents (I have a pic but don't know how to attach it.)

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My parents taught me very little. They were good with their money, but very private. Everything was taken care of for my sisters and I, we were given a car to use, and the gas and insurance were paid for, us never knowing what the bills were. Of course, this gave them the leverage to take them away if we used them irresponsibly, but we didn't. College was paid for, as were books, room and board.

I count myself lucky. They felt that our primary responsibility was to be good students.

However, once we were out of college, that was it. We were to pay for car, housing, food and entertainment -- everything. But had never been given the skills to do any of it. I left college not knowing how much money I needed to make in order to live the lifestyle I wanted, or even a life I could afford. I didn't know what to expect to pay for car insurance, for healthcare, for monthly groceries. I had no experience with a budget.

So, while I commend my parents for trying to take care of our every need, and I appreciate the sentiment, none of us benefitted from our lack of financial education. All three of us have struggled, in different ways, to different extremes, but we have all struggled, even into our thirties.

Thank you for allowing me to share this!

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vh

1. Have a goal. My father had one: to save $100,000, the amount his mother lost to swindlers and religious organizations in the 1910s, when he was a small boy. A hundred grand at that time must have been the equivalent of about a million dollars now. He was very bitter about the loss of this fortune, which had been accrued by his grandfather in freighting buffalo hides out of Oklahoma, and it affected his entire life.

2. Live frugally. He did save the $100,000, by working extremely hard, taking his family overseas where (at the time) Americans paid no taxes either to the U.S. or to the Saudi king, and by living so frugally most of us would use the term "miserly." When I was growing up, my mother had no furniture of her own--we furnished our company house with metal furniture from the company, and even our flatware bore the Aramco logo. My father made most of our lamps and some of the furniture. While other little girls wore pretty clothes purchased in Paris and New York (the company would send you wherever you wanted to go for long leaves...other families went to Europe; we flew home and spent his vacation camping out at relatives' houses), I wore dowdy, ill-fitting rags ordered from the Sears catalog.

3. Don't keep all your eggs in one basket; or, greed will out. He came close to making his savings goal well before his target retirement age of 50 by investing every penny in insurance securities. He was thrilled at the 30% p.a. return. Well...that one fell under the heading of "if it looks too good to be true..." When the bottom fell out of the insurance industry, he lost almost everything and had to start over.

4. If you are a woman, you'd better be prepared to support yourself. My parents grew up during a time when women were supported by men; a woman who could take care of herself was so rare as to be regarded as an oddity. My father would bully my mother by threatening to divorce her if she didn't "stop spending my money." It was a terrifying threat: the most she ever earned on her own would not have covered the rent on our apartment after we returned to the United States. I learned by observation that 'tis far better to be an oddity than to be 100% dependent on a man. All women should prepare themselves to be financially independent.

5. Stay out of debt. My father never bought ANYTHING on time: he paid cash for cars, and when he finally bought a house, he paid for that in cash, too, by moving to a state where housing costs were very low. As a result, he never lost money to interest.

6. Plan for inflation. My father did retire fairly young on his $100,000. He planned to live on the interest & dividends, never dipping into principal. What he didn't figure on was the rampant rate of inflation during the 1970s, and the low interest rates. The cost of living ballooned far beyond what he ever imagined, and the return on his savings was not enough to support him and my mother. He went back to sea (he was a merchant marine officer) until his back went out and then finally came home for good. As his retirement progressed, the proceeds from his hundred grand, which he invested in extremely conservative instruments, supported a lifestyle that most of us who are not used to living that frugally would consider...well, very tight.

Today, thanks to a decent job, careful planning, avoiding debt, and modest spending habits, I have enough to retire on right now. However, I've decided to stay on the job until I'm 65 (or until the university quits rehiring me, whichever comes first) to insure that I will have enough to withstand inflationary pressures over the 20 to 30 years I expect to live past retirement.

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I can't recall a time when my parents sat me down to teach me about money. My dad always taught me about doing everything honestly and with a clear conscience but the subject of money never came up.

I didn't really learn anything about money until I graduated from school and moved out to strike it on my own. Once the financial umbilical cord was chopped off I struggled and eventually figured everything out.
-Raymond

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SL

My parents are both lawyers who graduated from an excellent law school. However, they left some of the highest paying jobs to do public interest work that they genuinely love. Throughout my childhood, I saw the sacrifices they made for my siblings and for me, and I plan to pass the life lessons they gave me on to my kids.
First, they moved to a very nice suburb so that we could attend the best public schools. They made sure that there was always money for enriching extracurricular activities, such as cello lessons, even though I never practiced. From the time we were born, they made it their goal to fund our undergraduate education in its entirety, so that we could enter the world as adults with no debt. All of what they did for us came with a price.
Our community was one in which BMWs were commonplace and people took fancy vacations all over the world. My parents probably could have done this -- particularly if they ripped out the credit cards and took on debt but even if they'd just spent their savings-- but they never took a luxurious vacation. We rarely went out to eat. We didn't have cable (my father was born in 1947 and he could not believe that anyone would pay for television). To this day, my father proudly drives a 1992 Toyota Camry (a gift, used, from my grandparents). When the window motor died earlier this year -- and the expense to fix it was more than the car's bluebook value -- my father simply put duct tape on the window. My mother never buys clothing unless it is on sale, and she won't spend more than $15 on a pair of jeans or $40 on a pair of shoes.
My parents never worried that neighbors looked askance as they parked that beat up car in the driveway. Their friends playfully teased them about their frugal lifestyle. And yet my parents are well on their way to accomplishing all of their financial goals. They fully funded education for their three kids -- about $500,000 in all -- and are safely invested for their retirement. They have only a few years left to pay on their mortgage. Together, they earn a bit more than $100,000 a year.
Theses are 10 lessons I have taken from them:
1. Don't worry about what others have and what others do. Keep your eye on your own finances and save.
2. Never carry a credit balance. Keep only a few credit cards, and pay them off in full each month.
3. Buy reliable, economic cars new, then drive them until they die (or until the bluebook value of the car is less than it would cost to repair it). Cars are a depreciating asset and all you need is one to safely get you from Point A to Point B.
4. Don't get a variable rate mortgage. Make sure you know what your monthly payments will be, and that they are no more than 25% of your monthly income.
5. Live below your means and hide the rest of the money from yourself in high interest savings accounts or your retirement account. I am now becoming an attorney and will likely take a job that pays me $160,000 my first year. However, these jobs are often very taxing and require very long hours. If I want an escape route - or merely flexibility -- I can't let my spending grow to meet my income.
6. Save for education and retirement. Fully fund your 401K and open investment vehicles to save for kids as soon as they are born.
7. Don't throw away a lot of money on rent. A one-bedroom apartment will do just fine and will allow you to save for a down payment on a house.
8. Don't waste money on frivolous things such as brand-name clothing. If you must have nicer clothes (and I admit, I love JCrew and Ann Taylor) buy them off season, on super clearance.
9. Enjoy free activities, such as reading a library book or visiting a museum on the weekend. Turn dinners home into quality family time.
10. You shouldn't need expensive gifts to be happy in a relationship. my engagement ring cost $300, and it is far more expensive than anything else my husband has ever given me. And yet I have never been so happy!

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unspoken

I asked my mom, once, how much things cost. She seemed surprised and showed me the bills, and I was amazed by how expensive things are. Most of the things I learned, though, were from observing her.

I learned that no matter how hard I work, and how little my sibling works, she'll make sure that we both have the same amount in our bank accounts. I learned that there's money out there and I can go earn it, and she'll take what she wants of it, but not so much that I notice how much is missing. I learned that if I work hard enough and save enough, we'll get to buy groceries at the end of the month before the cheque comes in. I learned that if I need something, I should encourage my sibling to decide they need it, because they get what they want and I don't. These lessons continued in life; my first boyfriend decided we needed a joint bank account after he found out how much I had, and he bought flowers for other girls.

If someone else is in charge of your money, there is no guarantee that you're going to get a fair share. Always make sure you have enough to get you past the next paycheque, even if it means you can't have things that everyone else get to have, because not eating sucks.

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JM

My formative moment about money came when I asked my dad for 50 cents to buy ice cream from the ice cream truck that cruised around our neighborhood. He said "get a job". I was seven.

Luckily those lessons seem to have paid off, although they were not prepared for the temptations credit cards would offer their kids. I think it was because the idea of not paying off the balance was alien to them and they couldn't comprehend why anyone would not pay it off, hence they didn't warn us. Some of us figured it out, but some of us didn't.