Financial Pet Peeve: Parents who do not teach their children good financial habits

by Guest

This is a guest post from Denise from Single Saver as part of the Yakezie Blog Swap #4.  The Single Saver offers practical, money saving tips in a fun and interactive format.  Read about my biggest financial pet peeve at Single Saver today.

Ever try to think of your biggest pet peeve?  How about focusing the question to your biggest financial pet peeve?  For me, it hard to narrow it to just one.  I find all of the following equally frustrating:

  • People being wasteful with money and/or possessions.
  • People not setting aside an adequate emergency fund.
  • People not saving/investing for retirement.
  • People not living within their means.
  • People being overly impulsive with their spending habits.

Each of those items revolves around people’s habits with money.  But I also believe that each of those items can be avoided if good financial habits are instilled early in an individual’s life.  And so, perhaps my biggest financial pet peeve of all is… PARENTS WHO DO NOT TEACH THEIR CHILDREN GOOD FINANCIAL HABITS!

My Life

I grew up as an only child of parents who did very well for themselves.  Admittedly, I never experienced financial hardships as a child.  That said, we never lived high on the hog, either – even though we were financially able to.  My parents saved first and spent second, and they instilled that habit in me from an early age.

When I was born, my parents opened a savings account for me where they would deposit the birthday and Christmas money I received.  I can remember being as young as three or four and being able to see the amount rise each month when the statement came in the mail. It was then that I learned how fun and rewarding it can be to watch your savings grow.

When I was 16, my parents opened a checking account in my name.  The account also had a Visa debit card linked to it.  Because it was a debit card, I could only spend as much as I had available at any given time. This gave me the freedom to learn to use credit in a safe environment. I used that debit card all through college.  When I did finally obtain a standard credit card many years later, I had developed the habit of not spending more than I could afford to pay.  As a result, I have never had credit card debt.

My parents kept no financial secrets from me, nor from each other.  Knowing the state of their financial situation (within reason) as a child taught me a couple things.  First, just because you have money doesn’t mean you have to spend it.  There can be pride and joy in saving!  Second, there is comfort and security in having a financial balance large enough to cover any emergency that life throws at you.  I knew when I grew up that I wanted that security, myself.

Tina and Andy

I work with a woman – we’ll call her Tina (not her real name).  She is 26 and still lives at home with her parents rent free.  Her parents are very well off financially and they still pay for Tina’s cell phone, car insurance, and pretty much anything else that Tina wants. So with a good job and no expenses you would think she would have a large savings account, would you not?  Wrong!  She spends every penny she makes on clothes (I am not making this up).  Her boyfriend (we’ll call him Andy) is almost 30), also still lives with his parents, and lives a very similar lifestyle as Tina.

Tina and Andy think being an “adult” means buying expensive wine, $10,000 watches, and $1,000 shoes.  Spending money is a pastime for them.  Tina looks at me like I have two heads when I talk about my thrift store finds and once told me how awful Aldi was because they sold “generic” food. These two really have no clue about real life finances.

Both Tina and Andy were raised in families where their parents made more than enough money to support lavish lifestyles.  The problem is, neither set of parents took the time to educate their children about money-management, budgets, or savings.  All they were taught is that spending money is enjoyable. As a result, both have developed very bad spending habits that will be difficult to break. With no savings, no investments, and no clue about money management, they are very ill prepared for any financial hardship that comes their way.   In my opinion, their parents have done them a huge disservice in that regard.

Back To Reality

As an adult, I have had some financially lean times.  I have also had times of financial surplus.  And thanks to the good financial habits my parents taught me from early on in my life, I was well prepared to deal with both situations in a responsible manner.  I save first, spend second, and always evaluate my spending to ensure my money is being used in the most responsible way possible. I am comfortable living within my means and have a little savings and retirement set aside.  That is a great feeling!

Parents, do your children a favor and teach them good financial habits from an early age. Doing so will make them better equipped to deal with their finances as adults.  Such lessons will serve them well throughout their lives.

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Beth March 18, 2011 at 7:25 am

One of my pet peeves too!

Unfortunately, many parents don’t have successful money management skills in the first place. Even if they do, teaching children doesn’t always mean they’ll listen 😉 My siblings and I were raised as you were, but not all of us took the lessons to heart. Friends and society in general can be huge pressures too.

krantcents March 18, 2011 at 8:58 am

Parents are abdicating their responsibilities when they do not teach the ir children about money. I the Tina and Andy situation, they are enabling their children. They are keeping these adults from maturing and taking on responsibility. These adults (Tina & Andy) will become more dependent on their parents. When and if they finally move out, they will be very immature financially and are likely to get into real trouble. When this happens the parents will just bail them out. I wonder if they would adopt me?

Denise @ The Single Saver March 18, 2011 at 1:17 pm

Beth, you have a very good point about friends and society being a bad influence on us. There seem to be people all around us trying to make us go into debt! That is why I am thankful I was taught about money early so I didn’t fall (too much) into those traps.

Krantcents, I could write a book about “Tina and Andy.” LOL! Maybe my next blog should chronicle their antics! Do you know, “Tina’s” mom still makes Tina’s lunch for her everyday. too? Even cuts up the fruit! It’s crazy! Her parents are enablers in all aspects of her life.

MoneyIsTheRoot March 20, 2011 at 11:13 am

This article really resonates with me. I can remember when I was 12 and had an extra $100 saved up, I told my father and stepmother (at the time) that I wanted to invest it in the stock market, they pretty much laughed it off and said I would need quite a bit more than that to do so. It took me about 13 more years before I didnt any saving and investing, and I wonder how much further ahead I would be had they been more supportive at the time.

Jacob @ My Personal Finance Journey March 20, 2011 at 1:37 pm

Nice post here! Along the same lines as this, I hate to see when parents do not ever talk about finances with their children. I know that in my family growing up, we were pretty well off financially, but money was sort of a voodoo subject. As such, I had to teach myself almost everything about finance.

Bret @ Hope to Prosper March 20, 2011 at 9:47 pm

I was the fortunate recipient of awesome parenting. Even though my folks were divorced, they both taught me a lot of valuable lessons about money and life in general.

I am following that tradition with my own children. I make my adult son pay rent, even though I don’t really need the money. I want him to understand and appreciate that life costs money. Otherwise, I would be doing him a huge disservice.

Barb Friedberg March 21, 2011 at 4:54 am

denise-Totally agree. Wonderful story. You used the lessons learned growing up profitably.

retirebyforty March 21, 2011 at 9:33 am

Wow, Tina and Andy sounds like they are made for each other. I don’t have a good feeling about their future once their benefactors are gone….
We’ll teach our kid about finance and won’t keep anything from him or each other. 😉

JT McGee March 21, 2011 at 11:20 am

My pet peeve as well. I’m starting to think it comes down to the fact that parents don’t know what they’re doing with money to begin with, so to pass on any financial advice might be on “what not to do” rather than “what to do” with your money.

There is no better way to instill a sense of comfort and security in your family tree than teaching your kids how to manage their finances. Every parent has the responsibility to do so.

Sandy @ yesiamcheap March 21, 2011 at 2:38 pm

Sounds like my mother and stepfather with my little sister. I try all the time to get them to see the error of their ways, but alas, the finances will smack them and her in the face once day, because they are due to retire when she is due to start college. Let’s see how this works because big sister is not the piggy bank.

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