Ever since I was a little girl I have always had an obsession with money. Earning it, saving it, counting it and sometimes spending it…Growing up my sister and I completed a set of chores per week and earned $2 per week from the age of seven. Payday was the best day of the week for me, even back then! Eventually, my sister and I banded together and demanded our pay increase to $5 per week. What can I say, my dad was a union man so looking back I think he understood our plight!
Our first interactions and understanding of money have probably come from our parents. We can emulate these behaviours and attitudes throughout our lives or we can sometimes oppose them. My dad was the biggest tight arse when it came to money. To the point that the air conditioning in the car was never allowed to go on because it used fuel. “Wind down the windows if you’re hot, it’s nature’s aircon” He also used to make my sister and I share one happy meal and one toy….now that really is ice cold.
Now I can tell you right now I use my car’s aircon every single day even in winter and I will never make my future children share a happy meal. So that level of scrimping hasn’t stuck. My parents were of the old school belief that you work, save and buy a house and that this was the key to wealth. They viewed the sharemarket as “gambling” and did not know anything about it. Overall though I had a pretty good financial foundation during my early years and the notion of saving for a rainy day definitely stuck with me throughout adulthood.
It’s important that we have a foundation of financial knowledge laid during childhood so we can make informed decisions as young adults. People should be learning how compound interest can work for and against you, what an interest rate is and what the share market is as time is your most valuable asset when it comes to long-term wealth creation. Unfortunately, the days of earning a low income and scrimping every penny in order to save your way to wealth is just not going to cut it anymore.
With extremely frugal parents (like mine) you might have adopted these habits in adulthood or you could be an overspender to compensate for feeling a tad deprived. On the other hand if you lived a luxurious lifestyle with expensive toys, clothes, and overseas holidays then you might feel entitled to that as you continue through adulthood even if you are not in the same financial situation as your parents were. This can be very bad for your financial health especially in young adulthood where you have often just started earning an income and credit first becomes available to you.
Unfortunately, the reality for young people is that we can often not afford the lifestyle that our parents were able to afford at the same age purely due to the way house prices have risen in the past 20 years. Often times they were able to afford a beautiful family home, a nice car, and two kids whilst working 50K a year jobs. The unfortunate truth is that it is going to be much harder for our generation to achieve this even though often we are earning similar salaries to our parents.
Maybe there was always stress around bills and money making it such a taboo topic in your household, that there was no mention of it all? In this case, maybe it is just a lack of knowledge that is impeding you from working towards your financial goals or making questionable financial decisions. If this is the case you really have to take charge of your own financial literacy and get educated. Knowledge is power and there are so many resources out there online or famous finance books that you can start to read through. The earlier you start managing your money the better off you will be, but it is never too late to start.
