5 Financial Lessons from my Childhood

lego child with money, 5 financial lessons from childhoodThe Early Years

In many ways my family is the embodiment of the American Dream. We moved to America in the early 80’s when my brother and I were just kids.

The intention was to only stay for two years. However, my parents fell in love with the American way of life. They both came from lower-income backgrounds. America offered opportunity, which was exactly the environment they wanted for their children.

My father had a good job. This allowed my mom to stay home with us until we were in high school, when she returned to school herself. We lived a prototypical, middle class American life.

As a kid I was unaware that my parents were instilling financial values in me. Looking back through adult eyes, I see how the values they taught me became the building blocks of my financial identity. Below are some of those values and how they became incorporated into my life.

1. Education/Learning is Important

My parents never seemed overly concerned with my grades. This is partly because I never failed any of my classes. But also because the outcome always seemed to take care of itself.

Each night they patiently sat with my brother and I as we did our homework, offering help only after we would get stuck. They always emphasized doing our best, even if our best wasn’t perfect.

They instilled a ‘never give up’ attitude when either of us would struggle. Whether it was me with reading or my brother with math. We weren’t allowed to quit or leave anything incomplete. Even if it was wrong, it was always done and done to the best of our ability.

As a result there was never any drama come report card day. On a nightly basis they always saw how hard we worked, and the grades always seemed inconsequential. The lesson was to do your best, work hard, and try to learn something. If you did those three things, the grades took care of themselves.

All of these lessons helped me excel beyond school and into my professional career. But it was the love of learning that birthed my passion for personal finance.

2. Invest, Don’t Buy

My dad never bought anything. He was famous for saying, “I think I need to invest in…” then he’d fill in the blank with whatever it was he was thinking of buying (shoes, a new computer, etc.).

This was just a part of his vernacular, but it also instilled in my young brain a way of spending money that didn’t fit in with the consumer driven society I lived in. The things he purchased seemed to have a greater value because he saw them as investments and not just something he bought on a whim.

It tied the idea of commitment to spending money. Investment suggested thought and intentionality. This certainly wasn’t true of everything he bought, however, by framing it in this way, he created this lesson for me.

3. Just Because you can Afford it Doesn’t Mean you Should Buy it

Growing up I had the impression my parents could afford just about anything they wanted (within reason of course). While I’m sure this wasn’t completely true, I came to believe that purchases should be necessary and fit with your values.

For me this was my introduction to values based spending. The idea of spending money only on the things that mattered to you and not the things that didn’t, even if you could afford them.

4. Experiences Not Stuff

The best example of this values based spending was my parent’s value of travel and experiences. My parents spent their money to have experiences and not simply fill our house with stuff.

I couldn’t name 95% of the toys I owned as a child, but I certainly remembered the trips we took or the events we went to. To this day, I have a hard time convincing myself to buy anything from a store. However, I have no problem spending money on a great experience.

5. Financial Responsibility

From my very early teens my parents turned over the financial responsibility of our daily lives to us. I remember them sitting us down and telling us they’d be giving us an unconditional $40 per month. This seemed like a fortune to a thirteen year old.

We could spend it how we pleased, but there were two stipulations and a catch. Stipulations: We had to save 10% ($4) and give 10% ($4). The catch: The remaining $32 became our income. We were to use it to manage our daily needs and run our lives.

They would give us shelter and put food on the table, but everything else was up to us. Clothes, haircuts, entertainment, all other spending, it was now all our responsibility.

They taught us the envelope system for budgeting. They would happily give us guidance at any time on how to stretch our money to get the most out of it, but beyond that we were on our own.

I was a natural saver, so my biggest struggle was actually being willing to part with my money. My brother was a natural spender. He struggled more with setting and sticking to a budget, but even he eventually figured it.

Giving us this kind of financial responsibility at an early age was invaluable. It laid the groundwork for budgeting, understanding the value of money, taught us to save,  and helped us learn to delay gratification.

Final Thoughts

There were plenty more financial lessons throughout my childhood, but the above five were fundamental to my financial development. I hope to instill these same lessons in my own kids.

Now that you know a little more about my financial history, I want to kick off a new category of posts on this site focused on finance. Further exploring lessons I learned over the years and goals that I have for the future.

I hope that we both learn something as we go along on this journey together. However, I want to reiterate that the only thing I consider myself an expert in is my own opinions and experiences. So please see this series as my attempt to prompt further thought and inspire investigation into your own financial lives.

I’d love to hear from you. Do any of these lessons resonate from what you learned in your childhood? Did you learn different lessons growing up? Let me know in the comments down below. 

UPDATE: I received some great feedback on this post and one of the comments inspired a follow up. Check out the Bonus 6th & 7th Lessons.

12 Comments

  1. I really enjoyed this post. I used to believe that my parents didn’t teach me much about money, but not long I go I realized just how wrong I was. The values the instilled in me became the foundation I’ve built up from.

    1. It’s funny how our perspective changes when we look at our childhood experiences through adult eyes rather than just remembering what it was like from the perspective we had as a child. Thanks for reading, I’m a big fan of your blog!

  2. Having financial responsibility at such a young age seems to work wonders. My parents also gave me a small monthly income (assuming I did my chores) and it defiantly sparked my interested in saving and budgeting.
    I remember one book I read as a child in particular that showed the power of saving and how money would grow if left in the bank til retirement.
    My parents introduced the power of compounding interest while I was in elementary school, and I am forever grateful.

    1. Compound interest is amazing. I remember when I first learned about it, I was hooked. I would spend hours plugging in number to wee what they would grow into. Who am I kidding, I still do spend hours doing this. Thanks for reading!

  3. Really awesome article. Being a new parent, I think I just found some amazing ideas to help my child with money. Your parents seem like they are natural teachers with strong values.

    My parents had a rough stretch where money was pretty tight. They were amazing in making our childhood fun and I think we have a better bond because of it.

    I learned a lot in that time frame and my sister and I were basically forced to manage our money to buy things we wanted. I think that instilled a sense of buying value. I am fine buying a ‘thing’ if there is value and it doesn’t sacrifice other goals.

    Side note: Huge fan of the lego article pictures!

    1. Congrats on becoming a new parent! It’s an awesome and at times terrifying journey. I think how your parents handle whatever money obstacles came their way is so important the lessons you are able to take from it. It sounds like your parents did a great job not allowing your childhood experiences to be defined by “the rough stretch”. This comment actually reminded me of a sixth lesson my dad taught me, I’ll be sure to write about it in the future (thanks for the inspiration!).

      I’m so glad you like the Lego pics. I haven’t gotten any feedback and wasn’t sure how they were being received. But to be honest, I have so much fun putting them together that I’d probably keep doing them anyway 🙂 Thanks for reading and the encouragement!

  4. Love this post! Your parents taught you some great lessons. And it’s nice that although you might not have realized the importance or appreciated it when you were younger, you see it now. As an adult and mother I definitely can see the lessons in the things my parents taught me when I was coming up.

    I love how your parents gave you and your brother $40 and left it up to y’all to manage. My parents never gave me an allowance or money for good grades because they said those were things that I was expected to do regardless. I hated it at the time, but I grew to learn the value in it (and of course they would give me money from time to time or buy me stuff).

    1. Thanks Kim, I’m glad you stopped back, it’s good to see you again!

      The older I get the more grateful I become of the lessons my parents taught me, both financial and otherwise. This appreciation was taken to another level when I had kids of my own and realized just how hard this parenting thing actually is. It sounds like you’ve gained some similar insights from your own experiences.

      I can’t tell you how grateful I am to see you back here and hope you keep checking in. I know I’ll be checking in with you and Omar.

      1. You’re more than welcome! And we will definitely continue to check back in. We love reading your stories, and appreciate hearing from you on our blog as well.

        I can most certainly say that having a child of my own makes me appreciate the things my parents did for me. It even makes me appreciate the things they didn’t do sometimes! LoL

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