5 Outdated Money Tips From Your Parents That Keep You Broke
Our parents all try their best for us, but no matter how great their intentions are, they’re bound to make a few mistakes along the way. People handle their money a lot differently now than they did when our parents were growing up. The economy was hardly reminiscent of this one, and some of the bills we pay now didn’t even exist when they were learning to handle money (think smartphone, internet, Hulu, Netflix, Spotify).
It is true that our parents taught us their money tips and habits to help us become more financially smart and independent. However, a lot of our parents’ money ideas are outdated or even counterproductive now. Unlearning some of the things that were passed on to us may help us develop a better relationship with our wallets.
1. A Week-to-Week Spending Style
If your upbringing was anywhere below the upper-middle class, you can probably remember at least a few instances where your household was more or less living paycheck to paycheck. This might have ingrained a “week to week” spending style in you. Weekly shopping trips to keep your home stocked for 7 days might seem convenient, but they aren’t always cost-effective.
Instead, buying things in larger quantities or stocking up on the goods you regularly use when they’re at their lowest price may be more beneficial. If your local grocery store is having a weekend sale where ground beef is to buy one pound, get one pound free, or if the 24 pack of the paper towels you use equates in price to getting 4 rolls for free, go for the bulk.
2. A Loose Idea of Saving Money
If you only saw your parents saving before a major event, like Christmas or a family vacation, you might have adopted a similar mentality. There’s a flaw in the logic that you only need to save if you have a short-term goal in mind. Your savings can help you in an emergency, or become investment capital that will ultimately fund your retirement. Everyone should be saving all the time, even if it’s only a small amount.
Decide on a set amount to save every paycheck. Put it into your savings account and pretend it doesn’t exist, unless there’s an emergency. If you’re a parent now, consider opening a savings account for your child and teaching him or her how to use it.
3. An Unclear Relationship With Investments
If your parents invested, they probably did things the old-fashioned way. They bought stock in the company they worked for or stuck to something else that was a safe and traditional bet. There is a multitude of ways to approach investing, and many savvy investors are steering away from our parents’ way of doing things.
If you want to start investing, it’s definitely smart to consider some courses in investing instead of just putting your money into the most recent fad. Real estate investment has the potential to be particularly lucrative. Cryptocurrency investment can be lucrative, but there’s a lot more at risk. Learn the different types of investment and settle on the one that will work best with your lifestyle and budget.
You can avoid burning your hard-earned money by applying these money tips and unlearning bad habits that were passed down to you.
4. An Unhealthy Relationship With Credit Cards
Very old-fashioned parents likely dissuaded you from ever getting a credit card. They saw credit as dangerous and wanted to pay cash for everything as a steadfast way of living within their means. Other parents got credit cards without fully developing a grasp on when to use them and when to avoid them, leading their kids to see their parents constantly broke and stressed out.
There’s a middle ground with credit cards. A low-limit credit card with some type of benefit or advantage that is only used occasionally and always paid on time will help you build your credit. Credit cards can absolutely become a part of a thriving and successful money management system as long as they’re handled properly and effectively.
5. Thinking You’ll Always Have Help
If your parents were always there when you fell short or encountered an emergency, you may be taking that for granted in the back of your mind. Your parents won’t always be able to afford to bail you out, and they won’t be on this earth forever. If you have a habit of turning to your parents when you’re in trouble, it’s time to make some changes.
Establish a budget for yourself, focus on building up an emergency savings account, and start saving for retirement. If picking up a side hustle will help you fill the rainy day fund, doing so might be a good idea. You never know when your parents won’t be there to help you, and you don’t want to find out what will happen when it’s too late. Constantly remind yourself that you are the only one responsible for your financial stability – if you succeed, that success is all yours. However, if you fail, there will probably be nobody who will be able to help you.
Proper money management is a multifaceted practice that involves learning from the past, considering the present, and most importantly, looking toward the future. A little (or a lot) of unlearning and restructuring might be necessary to put you on a path to full financial independence.
