“I’m very bad with Money”
If the above quote describes your excessive spending habits or lending habits, you might want to find a comfortable spot for a while. Guess what? Recent studies have shown that this bad trait of yours isn’t necessarily your fault. You probably picked it up from your parents or someone close to you during your childhood.
Think I’m joking? Here’s a quote from Edward Horwitz, Ph.D. He is an associate professor of behavioral finance at the Creighton University Heider College of Business.
“The money patterns we observe as kids are the main source driving our financial decision-making later in life.”
In agreement, a financial coach-Christine Luken, stated that. Most people have money narratives from their childhood years, and this affects their present financial behaviors. So if your family started to save money for buying a car, you can also take a look at this: robocash.ph/articles/top-10-car-loans
Now that you’re in the clear, here are some common financial habits you most likely picked up during your formative years with your parents:
You spend it all: Overspending stems from being deprived of something for so long. Sometimes, during our childhood, we feel as if we didn’t get all we want. If your folks were penny-pinchers and you grew up under a tight budget, it is hard to control yourself when the big bucks start coming in.
Once a King, always a king: If you were spoilt a lot by your parents, living a lifestyle that only the rich can dream of, then they’ve unconsciously trained you to live big. This is very dangerous because, when you’re on your own, and your income doesn’t meet up to your standard of living, you will probably borrow till you feel satisfied. That will lead you to have a huge mountain of debt that nobody wants.
You fall for every guilt trip: This happens when you grow with charitable and generous parents, who drilled values such as alms-giving into your subconscious. Now, as a grown-up, you find it hard to say “no” to people who run to you for money, and the guilt eats you up if you don’t give it to them. There is absolutely nothing wrong with being charitable but, not keeping back enough to solve your own needs is a serious problem.
You spend as you please: Of all we’ve seen so far, this trait shows how “the apple doesn’t fall far from the tree.” If your parents lacked financial literacy, it’s most likely that money will just come and go through your bank account, and you will live from paycheck to paycheck with no financial planning.
You live like a damsel in distress who needs a financial bailout: This one’s for those with rich “uncles” and “Aunties.” When your family always received financial support from well-off relatives, you will not make an effort to make your own money because you have this mindset that financial help will come when you need it. Otherwise you may learn all about top-5 housing loans here: robocash.ph/articles/top-5-housing-loans
How to break bad money habits?
This can be tough, but you can end your family’s cycle by being financially independent. Learn to live modestly. There are lots of resources on minimalism that will help you make choices within your budget. Go for them and learn how to be financially stable, secure your future, save and make investments.
Today, many platforms allow you to set up an account with automatic transfers to help you save money. If you do not end this now, you will most likely pass them on to your offspring (If you want to have kids). This wouldn’t do them any good.
“Money attitudes can be strange, such that although we may not be able to remember anything specific, kids are very sensitive and may pick up on this modeling on a subconscious level.”
This is a quote from Brad Klontz, Psy.D., CFP, the Financial Psychology Institute founder.
Teach your family members (especially the kids) the benefits of being prudent with money.
Show them as well the benefits of budgeting and how they could use their savings to invest in assets that will generate funds for them on autopilot, and of course, practice what you preach.
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