We form our beliefs about money at an early age. It is often the actions or messages passed down from our parents that guide us. These memories influence, consciously or subconsciously, how we feel about money. They show up in the financial choices we make every day.
I'd like you to dig deep into your thoughts about money, and how those thoughts affect your financial decisions. Take a few moments to answer these questions:
What are your beliefs and feelings about money?
Have you ever thought about how your relationship with money came about?
How do you feel inside when talking about spending, saving, and investing? Empowered? Nervous?
I have clients whose first experiences with money were difficult. Decisions they make today are influenced by challenging times years ago. I have worked with clients who grew up during the Great Depression, their relationship to money forged during a time of scarcity. Today, we have young people whose first experiences with money came about during the Great Recession of 2008-2009.
Other clients have very positive early memories of money, even if their family was not particularly financially well-off. I often hear clients say, “I guess I grew up in a poor household, only we didn’t know it at the time!”
Here are some of their stories:
• Joe’s parents were very status-conscious and always owned fancy cars and an impressive house. Later in life, Joe’s father lost his job. The family had to downsize their lifestyle almost overnight. Joe remembers his father at the kitchen table, sorting through bills with a worried look on his face. While Joe is doing well as a professional now, he still fears that his financial security can be taken away at any time. He is anxious when paying bills.
• Jane’s parents handed her money whenever she asked, and sometimes even when she didn’t ask. Her parents never encouraged her to find a meaningful career path and thought that her happiness was tied to having anything she wanted. As an adult, she relies too often on others to provide for her.
• Anita remembers her mom walking into a store and heading straight for the sale rack. If it wasn’t on sale, she didn’t buy it. Anita has trouble today buying anything that isn’t marked down and isn’t sure that’s always the best approach.
• Nia had to earn her allowance by doing chores. Her parents encouraged her to save a portion for a “big” item and donate a portion to her church. She feels today that by learning these habits she has developed a positive relationship with money.
• Evan remembers running a lemonade stand during Northwestern football games. His parents provided the capital (lemonade, cups, a pitcher, etc.) and he kept the profits. Early on, he learned the joy of providing a service that people valued. He saved his lemonade money and bought a cherished scooter. As an adult, he worked at several large companies, but finally decided to start his own business. He now is happier than ever and has the same feeling he had at the lemonade stand.
• Daniel’s father was a lawyer who worked all the time. Most days his father left before he was awake and came home after he was asleep. His father missed most of his sports events and never really seemed to be present. Daniel decided at an early age he would have a career that offered more flexibility and family time. The big house just wasn’t as important, and he feels good about this choice.
It takes some time to look back at your early memories of money: your first bank account, birthday money gifts, and your first job. Your earliest memories of money may be your most profound—those that have a lasting impact on your life.
So, what are your most meaningful early memories of money?
It’s an intriguing question, right? If you can’t come up with a memory right away, keep thinking. Once you have your memory, see if there are any parallels to your current feelings about money.
Here are some questions to help you get started:
- How did your parents handle money?
- Did they spend or save?
- Did they try to influence you about your habits?
- Did they talk about money? Fight about it?
- Was money a taboo topic for family discussions?
- Were you a saver or a spender as a child?
- What was your first job?
- How did it make you feel to earn your own money? What did you do with it?
- Does one of your memories shape your money behaviors today?
- Do any of your money beliefs cause stress in relationships with loved ones?
- Are there any changes that you would like to make--now that you have thought more about your early or most profound memories of money?
Discuss these questions with your loved ones. Identifying what has impacted your early relationship with money gives you the power to make changes in your life today.