How Your Parents Influence Your Finances

By | January 17, 2018

We have identified some common parenting behaviours that may have a negative influence on your financial health. Also, we’ve listed ways to overcome them.

How Your Parents Affect Your Finances

Did you know that your upbringing can have a direct influence on the financial decisions we make as adults? Sometimes, they have a positive effect on our finances, but other times they can be harmful to our finances.

So, should you blame your parents? No! While they may have an influence on your money habits, the ultimate ownership lies in your hands. You are expected to identify the root cause of your poor money habits and take the effort to change your ways.

Don’t fret now! We’re here to help you. We have identified some common parenting behaviours that may have had a negative influence on your financial health. Also, we have listed ways to overcome them. Hope this helps!

Additional Reading: 6 Financial Wake-Up Calls That You Shouldn’t Ignore!

Frugal Living

What’s the problem? As a kid, you have always felt that your parents were too frugal and denied you of everything that you ever wanted.

What’s the justification? Maybe your parents were trying to stick to a tight budget or they wanted to teach you how to spend your money wisely. There is also a chance that they were trying to secure their financial future.

How did this influence you? Since you had a deprived childhood, you tend to overspend on everything that you have ever wanted. All that frugality is forcing you to indulge in binge spending. Bad, very bad!

What’s the solution? There’s a probability that you’ve misunderstood your parents. Talking about it with them will help you understand the bigger picture – the reason behind their frugality. Also, you must remember that your aim is to become financially independent first. For that, you must start saving more than you spend. If you find it difficult to save, you could try setting up an automatic savings plan.

Tip: Don’t let your kids go through the same phase. Rather you must involve them in your financial planning so that they will learn the importance of saving.

Spoilt Brat

What’s the problem? Your parents literally spoilt you by giving in to all your wants. Basically, you’re a spoilt child.

What’s the justification? Maybe your parents had a deprived childhood, so they did not want you to have one. And they ended up overspending on you.

How did this influence you? You have become an over-spender yourself. You don’t think twice before spending; if you have your eyes on something, you’ll make sure you get it for yourself. And you do this even if you don’t have the required income to sustain such a lifestyle. In the end, you will be unnecessarily accumulating a lot of debt. Scary much?

What’s the solution? Hmmm… What could be an ideal solution for you? For starters, you will need to shift your focus towards different financial goals. For example, buying a house, saving for your kid’s education and retirement planning should be your primary goals. You could set up different Fixed Deposit accounts for each goal or invest a part of your income in equities. Gradually, you’ll learn to live modestly.

Additional Reading: Want To Be Rich? Focus On These 5 Money Goals

Tip: Stop depending on your Credit Card for unnecessary purchases. You could try leaving your card at home rather than keeping it in your wallet or bag.

No Money Lessons

What’s the problem? Your parents never discussed money matters with you. So, you don’t have a clue about managing money.

What’s the justification? Your parents considered talking about money as taboo. Or they lacked proper knowledge about handling finances. Or they thought that you didn’t need to know about how they handle money.

How did this influence you? You are basically naive when it comes to money matters. You don’t know how much to save, how much to spend, where to invest to grow your money, etc. You don’t even know the ABCs of financial planning. Sad!

What’s the solution? Knowledge is power, dearie. Yeah, we understand that you were never taught about money. But you can make some effort to learn about it. Can’t you? Go online and get educated. If you want personalised guidance, you can always approach a certified financial advisor to help you with your finances (Psst! We’re here to help too).

Tip: Don’t forget to give some sound financial advice to your kids.

No Risky Business

What’s the problem? Your parents loved to play it safe. They preferred to store their money in safe places like a savings account or in a secret locker inside their cupboard.

What’s the justification? Probably they made poor financial decisions while investing in stocks and lost a lot of their money. Or they had friends who lost their money by investing in such avenues.

How did this influence you? You are scared when it comes to money matters. You steer clear of investing in risky avenues totally. Just like your parents, you prefer keeping your money in safe places.

What’s the solution? In modern times, it is important to grow your money rather than just keeping it locked up somewhere safe. And you won’t be able to grow your money if you don’t invest in equities and stocks. So, learn to face your fears. Read up on investment-related topics, do your research and ask for advice. You could approach someone who has been investing for a long time or you could get help from a financial advisor. A good financial advisor can help you build a well-diversified portfolio.

Keep Up With The Joneses

What’s the problem? Your parents loved to live life king-size. They always used to spend more than they should.

What’s the justification? Their entire life depended on being better than their neighbours, friends and colleagues.

How did this influence you? You tend to follow in their footsteps. Since you have been so accustomed to living a lavish lifestyle, you’ll end up living your life beyond your means. Unfortunately for you, your parents seem to be bigger competitors than your friends and neighbours.

What’s the solution? First, you must focus on resisting the urge to over-spend. Stay away from environments which make you end up overspending. In addition, set up an automatic savings plan to help you save money.

Bonus Read: How Your F.R.I.E.N.D.S Can Affect Your Finances?

Always remember that there is a solution to every problem. You just need to take the effort. For any financial assistance, we are always here for you. We have a wide range of financial products and some great offers too. Come, check us out!

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