We all learned things about money growing up, whether intentionally or not. Does what we learned in childhood matter to our financial lives once we come of age? Raised by an ultra-frugal dad and a joyful spender of a mom, I appreciate what I’ve learned from each approach. Here are ten early money lessons that have shaped my money philosophy.
My dad came to the US as a young immigrant after fleeing communism in Czechoslovakia. He made his way to New York, and put himself through Queens College, driving a taxi and an ice cream truck to make money. Through the 80’s and 90’s, he made a solid living as a ceramics engineer, around sixty thousand per year. He saved most of his earnings, spending the smallest amount possible.
He’d patch his own muffler instead of replacing it. His twenty year old Civic’s axles made metallic clacking sounds for over a decade. Without knowing exact numbers, it was clear Dad had a high savings rate. He kept me in the dark about the particulars so I didn’t ask for more stuff growing up. The first super-saver I knew, Dad’s origin story likely helps to explain his ultra-frugal ways.
Divorce rates surged in the 80’s, and my family became part of that trend when my parents split. From a young age, even I could see that divorce took us down a peg. Now there were two households to pay for instead of one, and the gas money in between. Mom and I even moved to my grandparents’ place for a year, to get back on our feet. In our temporary location, I attended a new school with frightening, upper middle class children. Attending a high quality school with all of its enrichment programs, my academic skills advanced.
When we returned to our small town the following year, I was a step ahead of the other kids. I saw first hand what more resources meant for kids in a well-to-do area. By age seven, I resolved to find financial stability, so I’d never be forced to move for monetary reasons again.
Meanwhile, Dad taught me to find the least expensive version of anything. When he picked me up from mom’s for the weekend, our first stop was the market. We needed milk and food, since Dad spent most of the week eating lentils. He taught me to compare prices on everything from sardines to toilet paper. He crooned about the ways in which companies tricked consumers, from shrinking the product over time, to using a different unit than a competitor. But we were not fooled!
Dad taught me to spend according to a values system: his value system. These were fitness and education. “We” chose free sports, like running. To feed our brains, we ran a couple miles to the local library, perusing books and magazines for hours, sometimes for an entire weekend.
I learned to play tennis at the local park, first hitting against a concrete wall, and later, playing with Dad. We had matching neon orange and purple rackets from K-mart, since they were the cheapest. We carried old tennis balls in a paper shopping bag. I stared at the branded tennis bags carried by others. I wondered if people would notice our humble equipment and make assumptions. Comforted by my growing skill in lobbing the ball over the net, though, I reminded myself: we weren’t poor, we were just acting like it.
For vacations with Dad, we traveled by bicycle, first circling the state of New Jersey, and later, riding to Canada and back, over 1000 miles for each trip. It was Dad’s version of road schooling I guess. Sometimes we camped, others we stayed at an inexpensive motel along the way. While other families relaxed on vacation, I chugged up and down hills in the Catskills, taking an occasional dip in a lake or a roadside pool. Like a tween-age hobo, I rinsed sweat and dust off my face in convenience store bathrooms. By the time we took a break from pedaling, Fig Newtons and a bottle of tea tasted divine.
We propelled ourselves over hills and valleys, through humid and drizzly days. From a bicycle, we could see each yard of the countryside that passed, and I learned to appreciate traveling this way. Dad and I had shoestring adventures.
Having an ultra-frugal parent helped me have a lower than average threshold for material satisfaction. Since Dad often ate rice and beans, I came to realize how good they smelled and tasted when I was hungry. Plain boiled chicken was pretty delicious, and I loved to soak up the schmalz with a piece of rye. We ate in front of the TV, sharing stories from the week. Our simple routine cost very little, and it made any deviation, like eating out, feel special.
I lived with Mom during the week. After shacking up with my grandparents for a year, we moved to an apartment complex on a two-lane highway, across from a mobile home park. In the morning, Mom left for work, and I spent the final hour waiting for the bus with a fellow rider and her family. They had so many animals in their space, that I still remember the smell, which lingered on my companion long after we left her house.
Our bus route circled town for 30-40 minutes each way, to and from school, bumping over hills and around lakes. We passed single family homes, each neatly sitting on its own lot, with its own driveway. I dreamed of living in one of those homes: the bi-level, or the beautiful tudor…
Child support helped make ends meet. We had a pleasant existence, my mom intermittently dating, while I tried Girl Scouts and various sports. Friends and I scampered on the grassy common areas of our complex. We picked apples in the courtyard. I was a latch-key kid, and I enjoyed the responsibility and solitude of arriving home to an empty apartment. With the help of neighbors and friends, Mom and I did the single parent thing into my early teen years.
Mom made twenty-five thousand dollars per year as a psychiatric counselor with a bachelor’s degree. We had an inexpensive mortgage, but lived paycheck to paycheck, carrying a credit card balance from month to month. Despite our debt, we faithfully took vacation by the shore each year, and shared the cost with friends. We went to a large complex in Delaware, where I had my choice to swim in the pool or ocean. I was in young girl heaven, cruising the beach for my future husband between sunburns and cones of cookies and cream.
My allowance covered the ice cream budget; I received a few bucks per week, with opportunities to make more, doing extra chores. Mom introduced me to budgeting through that small allowance. I never saved a significant sum, since savings were for spending. But I learned that resources were finite, and that I could make decisions accordingly. Delightfully, I had some control over how much I earned, and how much money I had at any given time.
By high school, Mom remarried, and this improved our financial picture. My new stepdad let me practice driving his car. There was more money, but it wasn’t handed to me. I was eager to start my own financial life: I couldn’t wait to get a job. Following in the footsteps of my more sophisticated friend, I became a barista at the mall. From learning to use the espresso machine, to feigning interest about the origin of different coffee beans, I was an eager worker bee. I ground coffee into giant filters, stacking them for brewing, my clothes and pores retaining the scent. The experience and the paycheck were both great rewards: I was hooked.
Deciding to pursue a science degree, I headed to the state university, where the tuition was shaved according to class rank and SAT score. My in-state education was a deal. During college, I worked part time, and later traded up for a server position at a local steakhouse. I worked there through the first semester of medical school. In this period, I became more self-reliant, and set myself up for a bright financial future by minimizing my education costs.
Growing up on the humble side of middle class, I couldn’t fathom making six figures like I do now. Back then, living in a single family home was a fantasy. Now, I wake up in a lovely ranch with landscaping and solar panels. My daily surroundings still surprise and delight me because of my humble beginnings. Remembering this not-so-distant past makes me grateful. Now, I’m positioned to think about how much I’d like to work, rather than how much I need to work. These early money lessons have shaped my financial outlook and served me well so far.
Everyone has a money story. Yours could be affecting your daily thoughts and decisions about money. Consider writing down your own financial history to see what you find in there!
The path can be riddled with failures, even if you're doing it right. In this recording, I share some of my gaffes with you.
Very nice! Enjoyed reading this ????
Thanks Carolin! Any early money lessons that stick out to you?
I grew up in middle class suburban family. Both my parents worked and I was also a latch-key kid. Dad’s salary from the family Funeral Home provided the basics and Mom’s bookkeeping job at local church paid for the extra’s. I took ballet & rap lessons and was in Girl Scouts. I attended the local Catholic school. My parents were always in debt. Car loans, credit cards. Then when I was a freshman in high school we moved from Long Island to Cathedral City. Money was one of the things I remember my parents fighting about most. My Dad spend $10,000 to have our whole house packed and shipped to our new house in the desert. Once it arrived, Mom was not happy with the way the furniture fit in the new house. It was small scaled for our cozy 900 sq foot home on the east coast, very country. Now she had a 2000 sq foot Medetarrian home to fill up and insisted on southwest furniture and decor. My poor Dad came home from work one day to a bedroom, dining room and living room of new furniture that Mom had ordered without his knowledge all bought on credit!. Another time he came home from work and she had traded in her car for a newer Honda Civic and still had signed a big car loan. Dad insisted she return the car, but she didn’t. My sophomore year of HS, a friend put in a good work for me and I started working after school and on weekends at Carl’s Jr as a cashier. I started buying my own clothes and once I turned 16 I paid for the car insurance and gas in the extra family car I drove. When I was in HS my Mom inherited some $ from an Uncle and she blew threw that money fast. My Dad was bought out of his share of the family business and they used that money to get put of debt. But within a few years, they were in debt again. At one point, my Mom’s Civic was repossessed and my Dad borrowed money from a family friend to get the car back. They sold their property on Long Island and my Dad decided to invest it in stocks. In 2008 he lost about $60,000 and instead of riding it out, he freaked out and withdrew what was left of his investments. Now that money has been spend and both of my parents are retired living off social security with no real assets. They never saved for retirement. They have a home in San Diego but did a reverse mortgage and have pulled all the equity out of the house to get by. I never wanted to make all the mistakes my parents have, but have found myself in debt, out of debt, back in debt and over and over goes the cycle. After 25 years of marriage, my husband and I have finally made a plan and committed to never using credit again and paying back all our debts. We also will be saving a healthy Emergency fund and Retirement fund. We have shared out failures and our plans to financial freedom with our 2 daughters who are 21 & 17. I pray they don’t make the mistakes we did.
Wow, it can be cringe-worthy to reflect on those decisions your parents made, but we never really know the context… what makes people spend in that way. It would probably take some digging! Have you talked to them about it?
Love it! Sharing to FinLitPro…
Awesome, thanks! 🙂