When you grow up, you learn a lot from your parents. There are things that they directly teach you, like tying your shoelaces. And there are things that you don’t even know they are teaching you. That’s what I think happened with finances. I was never directly taught by my parents about finance, but I now know that I learned so much from them just observing.
So I thought I would share some of these lessons I learned with you guys. Let’s see if you have learned all of them too
Don’t make impulse purchases
Growing up, I was exposed to my parents purchasing habits. They rarely ever purchased anything on an impulse. Every purchase was researched and evaluated as to whether or not it is needed.
I have learned these same habits. I research any major purchase and look at all the options and the costs. Because the purchase price is not only the price you paid for something, it is also the loss of the ability to purchase other items with that money.
Say, you were buying a new dishwasher. Your current one still works, but leaks now and then. So you want a shiny new stainless steel one for $900. Now you have a new dishwasher, but you’ve missed out on other things you could have done with that money. Also, did you need a new dishwasher? Could you have just replaced the seal that was making it leak?
That’s what I did, replaced the door seal myself. And now we have a 15-year-old dishwasher that works fine, but it is ugly! It still functions, so there is no need to purchase a new one. That would be nice, but somewhat of an impulse buy.
You should only buy things if you can afford them
This lesson was taught to me when I really wanted a stereo to play tapes and CDs. Yes, I was around when tapes were still a thing, but only just. I wanted a stereo so badly. I bugged my parents to get me one. But they refused. They decided to start me on a savings plan and offered me chores and tasks to earn money around the house.
The encouraged me to save the stereo’s entire cost, which back then was around $500. It took me a while to get the entire amount, but we went on a family trip to the electronics store when I did. I was so excited to get my stereo! And once I had it, I would listen to music every day after school.
This lesson was so powerful. It taught me that I need to save for every big purchase I wanted to make. I needed to have the money, not credit cards or higher purchase loans. Although I think that would be irresponsible to give a 12-year-old a credit card or loan.
That same stereo now lives in my workshop, and every time I see it, it reminds me not to purchase anything using loans or credit cards. And to this day, apart from my house, I have stuck to that rule. I have never had a loan for any purchase. I do use credit cards for daily expenses, but I pay it back weekly.
Don’t try to be like everyone else
Being immigrants to New Zealand, my parents weren’t like everyone else. And they taught me that it was OK. There is no point in trying to be like everyone else. Be yourself. Growing up, I was sometimes embarrassed by some of the things they did. My parents were amicable and could make friends anywhere. This seemed to be something that everyone else doesn’t do. Generally, a lot of people keep to themselves. They taught me to be friendly to everyone.
I was taught that I didn’t need to have what everyone else had and be happy and appreciate what I had, rather than wanting what everyone else had. And besides, if someone else had something, why not make friends with them and enjoy it together. This is why we spend hours at the neighbour’s house playing PlayStation.
Holidays are for family, not spending
The retail industry has turned the holidays into days of mass consumer spending. Around the holidays we are bombarded with advertising of what we should buy for others to show our affection and love. Think expensive Easter eggs for Easter, fancy chocolate for valentine’s day, and a mad amount of presents for Christmas.
Growing up, the holidays were different in our home. The focus was on family. Sure there were still chocolates and presents, but not in excess. I remember having a conversation with a friend when I was little talking about the presents we had received at Christmas. He rattled off a list of items he had been given. And once I told him we only had one present each, he was baffled.
Putting the focus on spending time with your family, rather than buying presents for each other save you thousands of dollars. In 2017, the average holiday cost per person was $967.13.
Wait, did I read that right. Americans spend $1000 per year. That is absolutely crazy! I couldn’t find any stats about NZ, but I hope it is not anywhere near $1000, given that the median income is $23.50, which would take us a whole week to earn if we did spend what the Americans do. And much longer if you use your true hourly rate.
Even today, the holidays are still about family. Since we have all grown up, we only buy presents for the nieces and nephews. And for each other, we overindulged in good food and alcohol while spending quality time with each other. Sure the food and alcohol can cost, but it is nowhere near the $1000 average.
I encourage you to make the holidays about family, rather than consumerism too!
I have learned from my parents that opportunities will come your way when you make friends and help them out. But they also taught me that you should expect something in return when helping people.
These opportunities are not instant, but growing a big social network will help you out in the long run! Share your skills and knowledge, and people will share their skills and knowledge with you. Everyone wins!
What did you learn from your parents?
It’s only when I look around at today’s society and some of my peers’ spending habits that I was very fortunate to learn these lessons through observation from my parents. So what have you learnt from your parents, either directly or indirectly?
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