Parents' financial lessons?

[Fireup2020]

Reading through a variety of older posts, I am noticing a distinct facet of the members here - many seem to have been raised in poverty - and have learned their financial lessons through parents who scrimped and scraped - some for the better, others for the long haul and never changed.

My father was able to buy a 250 acre ranch with part of an inheritance from the proceeds of a race track sale, but we lived modestly (I truly believed we were poor because we lived in the country!) - house paid off in less than 20 years, both of them ER'd, but they passed on very little financial advice. (they still roll their eyes when I discuss retirement stuff)

Your parental influence?

 

[F-One]

After discussions with my sister a while back, we came to agree that my mother has had a bigger influence on my spending and saving habits more than my father. That said, neither gave me any good financial advise as far as investing. They only put it in the bank savings -

FYI, I was raised in middle class family (5 kids) - always thought we were pretty well off for middle class - partly because my mom was frugal and my dad never seemed to have problems buying stuff.

 

[W2R]

My parents taught me a lot while I was growing up, though their comments and criticism of various types of financial behavior.

We were brought up to believe that owing people money was wrong and something we should be embarrassed about. We were brought up to believe that you always pay your bills on time. My brothers and I each had a savings account set up for us, and we were encouraged to save our 25-cent allowance and put it in the bank for the future. We were required to do a tremendous amount of chores (by today's standards) and if we didn't, we not only were punished but our allowance was not given to us. We were told and shown that if you are honest and work hard, you will be rewarded (an assumption that is questionable in today's world, but we were taught that anyway). We were taught how to be frugal, too, if that makes any sense.

A lot of this seemed so unfair and cruel to me when I was a kid. But in recent years, it has been a wonderful help.

My father was a surgeon, but my parents scrimped and saved as though it was still the Depression. They told us a lot of "barefoot through the snow" tales about those days. My mother sewed all of my clothes (which I hated), and dinner at our house was frugal fare like a casserole rather than steak. One thing they did spend money on was world travel, which wasn't cheap in the 1950's. We lived in a mansion but they had bought it during WW II, when prices were very low, and it was one that needed a lot of repair and work to be suitable to live in. My father would not drive a Cadillac or other luxury car, even though he could afford it. He drove a Ford, and would keep his cars for 5 years. They spent a lot on private schools for us, but told us we were on our own for college.

In high school, when I would complain that the other girls had nicer clothes (and my brothers would complain that the other boys had their own cars), my father would dismiss it as the behavior of the nouveau riche. Since his father was a blue collar worker with a 1st grade education, I asked him if we weren't nouveau riche too? He said we were nouveau, but not riche.

 

[Nords]

Your parental influence?

I was born a collector and a hoarder, but I'm recovering. I never learned much about budgeting or investing as a kid but money stuck naturally to my fingers until I got to college.

My dad managed to achieve ER in his mid-50s (unfortunately as a widower) but his 1986 advice on investing was "I save the Business Week Mutual Fund issue and pick whatever looks good with at least two up arrows". I remember passing up Fidelity Magellan because it had a 3% load, but we paid 2% loads well into the 1990s.

What I learned from my parents is that raising your kids in financial ignorance is not bliss. Yesterday my 15-year-old was reading "The $avvy Naval Officer" and asking me about the difference between a Roth IRA and a 401(k). ("How did they get such stupid names?") A conversation like that didn't happen for me until I was nearly twice her age.

What really turned me on to financial management was marriage. And what really turned me on to ER was falling off the career track, which was the first time in 15 years of military assignments that I'd actually had to take some responsibility for what I wanted to do next.

 

[Caoineag]

Well, no discussion except with my mother so I know how to stretch money when you spend it since her bills were groceries and extras and the bills belonged to my father. By my father's own acknowledgement he got started on saving pretty late in life but it was more a push for me to figure it out then to teach me.

I did "learn" from my childhood though that I wanted to do better than that...

 

[SecondCor521]

Dad was a doctor who retired from full-time work shortly after his 55th birthday, then worked part time (locum tenens) for several years after. Mom was a stay-at-home mom but did work before the kids were born then again once the youngest (me) hit junior high.

My parents were born in the 30's so I have faint echoes of the Great Depression in my blood.

I didn't have name-brand anything until junior high. I didn't have a lot of fancy stuff but never got the idea that I should have it. Neighbor kids who had TVs in their bedroom were being "spoiled", with a negative connotation. I also never felt deprived; my parents supported me playing a somewhat expensive musical instrument, as well as in all of my sports and school activities.

My parents paid for my college.

Dad taught me about investing in the stock market, mutual funds, bonds, diversification, taxes, 401(k)'s, etc. Introduced me to Vanguard. Basically all the good offense stuff.

Mom taught me good defense / how to be frugal. Once she quite proudly informed me that her entire outfit, shoes included, cost her under $2.00 (garage sale stuff).

Others helped out too. My older sister helped me with my first budget when I was about 19 years old and trying to figure out if I could afford to live on my own. The Motley Fool, intercst, and the forums here, as well as some parts of my MBA education have all added a lot more understanding and detail, but the big picture was already set by my family.

2Cor521

 

[Fireup2020]

Yesterday my 15-year-old was reading "The $avvy Naval Officer" and asking me about the difference between a Roth IRA and a 401(k).

I am shocked that it took her this long! Figured you and Mrs. Nords had these phrases/definitions programmed into her early vocabulary

 

[Moemg]

I grew up middle class .My Dad was a state policeman and my Mom was a stay at home Mom.My parents were frugal but not cheap .We had good meals,nice clothes and Toys.My parents paid for four college educations and gave us a great start in life .The had a paid for house ,a small amount of savings ,two pensions and social security .My parents taught me to be generous and the importance of a college education.

 

[CyclingInvestor]

My dad was a law professor, my mom a cook. He grew up in pre-WWII Germany,
she in late Depression and WWII west coast, very poor.

The main lesson I learned was to be independent and self-sufficient, never to be
financially reliant on anyone. This was mentioned to me several times by my dad.

We learned by carrot, not by stick. Once I showed an interest, my dad started letting
me do his taxes starting when I was about 10 (I am sure he rechecked them before
sending them in). We had no real chores - my mom was/is a compulsive cleaner and
probably would have felt infringed upon if we had cleaned. Even now when I go home,
if I set down a dirty dish and turn around, when I look back it is already cleaned.

 

[W2R]

My dad was a law professor, my mom a cook. He grew up in pre-WWII Germany,
she in late Depression and WWII west coast, very poor.

The main lesson I learned was to be independent and self-sufficient, never to be
financially reliant on anyone. This was mentioned to me several times by my dad.

We learned by carrot, not by stick. Once I showed an interest, my dad started letting
me do his taxes starting when I was about 10 (I am sure he rechecked them before
sending them in). We had no real chores - my mom was/is a compulsive cleaner and
probably would have felt infringed upon if we had cleaned. Even now when I go home,
if I set down a dirty dish and turn around, when I look back it is already cleaned.

Wow! What a terrific family. I wish I had been that good a parent. Letting you do his taxes (even if he did check them over later) was absolutely brilliant - - it let you explore that interest, and exercise your mathematics, and learn something that would help you for a long time.

 

[toofrugalformycat]

My parents were a great negative example in that my father was an engineer, mother a housewife, they could not communicate about money, and that was one of the reasons their marriage failed. The only advice about finance I remember was my father showing me how to write a check before I left home for college.
Consequently I always paid my own way on dates, split expenses 50/50 with DH, and we track our money separately as far as is practicable. It makes it really hard to come up with something to argue about - although we do manage occasionally anyway.

 

[Achiever51]

Both parents were Depression babies. Dad had to leave school at age 12 and got his first job in a tire-molding factory. At age 16, he bought HIS father a truck! Mom's family scraped by, but she was haunted by the one time her family was evicted from their house for non-payment of rent during the Depression.
Needless to say, both were permanently scarred by their early lives. Without much formal education and through sheer determination, Dad rose to a senior position in his union and became the chief negotiator for thousands of his fellow union members. Except for the WWII period when she worked in an airplane factory, Mom was a stay at home wife/mother...who could stretch a dollar unlike anyone I've ever met. During their 56 year marriage, my parents paid cash for every car, house and every other purchase they ever made -- and still managed to accumulate a seven figure portfolio.
When I started working (my first job paid $1.37 an hour!), they insisted I pay room and board of $15 per week. Boy, I complained and bitched that none of my friends had to do that...they were unfair, on and on. Nine years later, when I married, they returned every penny to me, with all the interest earned...which became the down payment on the first house owned by my DH and I. (Boy, did I feel like a jerk for all the nasty stuff I used to say every time I had to hand over that $15/week!)
When I first joined MegaCorp, Dad harped on me to save 15% of my pre-tax income AND to join every savings opportunity presented to me by MegaCorp, like the contributory pension. (I was all of 20 years of age at the time.) Finally, just to get him off my back, I did sign up for all those plans and now that I'm FIREd at age 56, I'm so glad I did.

 

[retiringby50]

When I started working (my first job paid $1.37 an hour!), they insisted I pay room and board of $15 per week. Boy, I complained and bitched that none of my friends had to do that...they were unfair, on and on. Nine years later, when I married, they returned every penny to me, with all the interest earned...which became the down payment on the first house owned by my DH and I. (Boy, did I feel like a jerk for all the nasty stuff I used to say every time I had to hand over that $15/week!)

I'm sure it'll kill DH to see me do this to DD some day, but I will. They HAVE to have a purpose to keep that job, to work hard, etc. Otherwise, there's no incentive. FIL let my SIL (his daughter) and my FIL (his son-in-law) move into one of his unit and then charged below market rent, which is okay. She got pregnant and stopped working (that's okay). She lost the baby, and HE stopped working (a leave might have been more appropriate). FIL stopped collecting rent since they were both employed. After her second child, she went back to work, but they never offered to pay rent again. She decided to quit her job, and her husband went back to work part-time (but could work full time if he was motivated enough), and still no rent. They get their meals from her husband's parents, so they don't have to pay for food. They don't pay rent, so he's only working for vacation and other play money.

 

[Goonie]

My parents taught me a lot while I was growing up, though their comments and criticism of various types of financial behavior.

We were brought up to believe that owing people money was wrong and something we should be embarrassed about. We were brought up to believe that you always pay your bills on time. My brothers and I each had a savings account set up for us, and we were encouraged to save our 25-cent allowance and put it in the bank for the future. We were required to do a tremendous amount of chores (by today's standards) and if we didn't, we not only were punished but our allowance was not given to us. We were told and shown that if you are honest and work hard, you will be rewarded (an assumption that is questionable in today's world, but we were taught that anyway). We were taught how to be frugal, too, if that makes any sense.

A lot of this seemed so unfair and cruel to me when I was a kid. But in recent years, it has been a wonderful help.

Did we have the same parents?

 

[Ronstar]

I was taught to never buy something that you cant afford. To this day, I see no reason for personal debt other than a mortgage.

 

[Sandy]

Definately middle class, though mother was a bookkeeper and father started in TV repair, then regional rep for tv manufacturer, then in his 50's after getting laid off, had to borrow to buy a totally unrelated business.

Parents never directly discussed finances or their bank account and there were no specific lessons on investing but they helped me open a money market account at fidelity when I was in college. They also showed daily examples of good money management. They didn't seem to buy things unless they could pay for them (living room sat empty for years). We had an allowance and savings account and had to buy somethings ourselves. savings bonds were always considered good gifts for milestones. When others seemed to spend extravegantly, my mom would say "they have more $$ than sense". Also, because my mom was a bookkeeper and uncle an accountant, there as a strong emphasis on accurately tracking and accounting for $$ and lots of tax discussions at family dinners in the spring (brother is now an accountant as well).

 

[two4theroad]

My mom could squeeze a dollar until it squeaked for mercy. She had me writing the checks (not signing them!)and balancing the register when I was about 10-12. She took care of all the monthly bills and discretionary spending. She taught me the trick of delayed gratification. If I want something, I try to sleep on it first and it amazes me how many things I decide arent' worth going back for.
My dad followed the stock and bond markets and had me help him chart daily trends from about the same time. He was in charge of investing, mortgage and cars. He taught me about compound interest. As far as I know there was never a loan except for the house mortgage and they had an absolute aversion to credit cards.
We earned money with chores, no allowance unless they were done and part of it had to go into the savings account.
But it does not always affect all the children the same way. My brother is so tight he squeaks and my sister can't hold on to money at all. I am in the middle.
I think my parents are at least 75% responsible for my ER. I guess I should call them up and thank them!!
2fer
PS: They both retired early even after a messy divorce, she at 50 on rental income and he at 55 on military pension and savings.

 

[kaudrey]

Reading these stories, I see that my parents were a lot like a lot of yours!

We grew up middle class. Parents never borrowed, bought cars for cash etc. We didn't have the latest designer jeans, but they paid for our tennis lessons. I had a 13 inch black and white TV in my room that I shared with my sister, but never had our own phones or anything. We saved part of our allowances and part of any money given to us by relatives. We did chores, and got jobs in high school. I would sit on my dad's lap while he would pay the bills and he would teach me about credit cards and checkbooks and money management.

They paid for college (thanks!), but we paid for our own "extras", and I got an internship my last two years to help pay for things. My dad told me to max out my 401(k) from the day I started my first "real" job 16 years ago.

My whole family lives below our means. My parents retired at 57. My aunt at about 55. My sister and I are just like them. It is not in us to spend a lot of money on the latest gadgets or things. I spend on experiences (travel, dinner/drinks with friends etc), but that comes out of what's left after saving 30% of my salary.

I am where I am because of my parents' good example.

 

[Achiever51]

I am where I am because of my parents' good example.

Which reminds me...several years ago I could not think of the right gift for my Dad's 80th birthday, so I put together a photo album that traced his lifetime -- and he enjoyed that a lot.

But, I also wrote him a letter. In it I thanked him for all the life lessons he taught me and apologized for some of the not so nice stuff I put him through (nothing serious, just typical teen age angst at the time). It was a simple, heartfelt letter of my appreciation for all he and my Mom did to make me the person I've become. And he loved it -- so much in fact that I know he re-reads it every year on his birthday (and next month he turns 89.) Wish I had thought of doing something like this while I still had my Mom.

 

[RetireeRobert]

I guess the biggest lesson I got from my folks was perserverance. My dad worked in the shipyards for 35 years. Steadiness, keep going in, stick it out. My folks never made "big" bucks, but we had a comfortable living and they had a secure comfortable retirement, and put my brother and I thru college.

I think I got that "perserverance" trait perhaps through having absorbed it by osmosis. Perserverance, it served me well too. I was able to retire younger than my dad did, with fewer years in, and with more wealth than they had.

 

[Goonie]

I think I got that "perseverance" trait perhaps through having absorbed it by osmosis. Perseverance, it served me well too. I was able to retire younger than my dad did, with fewer years in, and with more wealth than they had.

Same here. He did 39 years at his last j*b, and I did just a tad more than 30. He retired at 62 with a cola'd pension, health & life ins, and was quite FI. I ER'd at 50 with a cola'd pension, health & life ins, and am also quite FI. Perseverance paid off....THANKS Dad!!!!

 

[calmloki]

Sure something was imparted: Folks homesteaded in Alaska, moved to Oregon when i was 3, Dad worked as a machinist, had his own shop, they sold everything in '59 and did about a 5 month tour of the US, Canada, Cuba and Central America with VW van, tent trailer, and 10, 7, and 1 YO kids. Got back to Oregon with nothing, Dad worked as a machinist to support raising us kids in the country as we moved from a rental to bigger and bigger places, all bought for the land, not the house. He often worked two jobs as well as working the places as we tried to raise Herefords on pretty desperate poorly fenced properties. Remember getting calls at the house from Beneficial Finance dunning for loan payments. Mom would do property searches the old fashioned way - drive out and look. She would also get up way too early to transport us out to bean fields to pick so we could make our money for school clothes and would shop railroad salvage sales for food. Growing up it was nothing to have 300# of pancake flour or 60 boxes of shattered chocolate Easter bunnies or a pallet of unlabled assorted canned goods. Made for interesting dinners. They borrowed money from me at one point - a small amount, but it made me interested in the concept of "interest". Remember my Dad hocking his gun collection several Christmasses to cover Christmas debt - one year it put two donkeys (Sam and Waldo) in our livingroom. They stretched hard, they paid what they owed, they were competent. Dad died before he was 50 after fighting lymphoma for almost 10 years and doing his best to set up the family. Pretty much makes me feel like small potatos in comparison, though our net worth is more substantial.

 

[simple girl]

Growing up in my family taught me to strive for financial security and taught me how to be frugal for sure.

Grew up in a 3 bedroom trailer. There were 6 kids in my family. Early on, we all were young enough that we all had to squeeze in there. Three girls in one bedroom and three boys in the other (parents in the third bdrm). These bedrooms were small. Probably no more than 6' by 10'. We had bunkbeds in our room, and at night we pulled out a trundle bed from under the bottom bunk bed. That's where I slept (I was the youngest).

Of course we had more space as the older kids grew up and moved out, and I was so thrilled to have my own bedroom!

I lived on hand-me downs and never had brand-name clothes. My mom made me some of my clothes, and when I was old enough I baby sat and paid for my own school clothes. To this day, I'm not a big shopper. I probably buy new clothes maybe twice a year, and never spend over a $100 or so when I go. DH loves this about me

My father worked on the railroad as a conductor, Mom was stay-at-home. Used to go with my Mom and use those little "clickers" in the grocery store so we didn't go over budget. I never asked for anything extra, as I could see how everything added up, and I knew we just didn't have any "extra". Talk about learning the value of money!

Mom taught me how to use a checkbook and live on a tight budget. Neither parent knew nothing about investing, etc., so I learned all that many years later (late 20's/early 30's) on my own.

Due to our low income, we qualified to buy reduced priced meal tickets at school. I remember one year Dad got laid off, and we had to go on welfare. Those were really tough times. I remember lots of powdered milk, and also those big chunks of velveeta type cheese. We also couldn't afford school pictures that year.

So although my parents couldn't teach me about investing, they sure did teach me how to get by on little money and budget carefully. And although they couldn't contribute to college for me, my Mom filled out all my grant and loan paperwork for me to make sure it could happen.

 

[RetireeRobert]

What a fascinating thread. I enjoyed reading every one of your stories. Thanks to the OP for starting it.

 

[Khan]

My parents were often poor; mostly as a result of my brother being sick most of his (and my) life. My father was self-employed and there was no health insurance.

I grew up on and around farms so we ate well. I started doing farm work at a young age and was proud to be useful. Coaxing a living from the land is not easy.

I learned early not to ask for anything as there was no spare money to buy non-essentials. As a result, I never got into the habit of shopping, especially for anything not 'useful'.

All of the above imbued me with a deep loathing for waste and junk.

I have to discipline myself not to be 'penny wise and pound foolish'; to spend money up front on preventive maintenance and on items that will last.

I'm getting better at spending money on things that increase my comfort/well being, but there's a lot of stuff I just don't want.