Money Models

Role Models

When we picture role models in our society, our minds drift to celebrities, professional athletes, or even historical figures. We seem to forget that the answer for most third graders to the often-asked question, “who do you admire most” is “my mom” or” my dad.” As children we want to grow up to be like our parents and as parents we want our children to emulate the good choices we have made in their own lives. To that end as a society our tendency is to shield children from our vices. The same is true of our money management skills. Whether we mean for it to happen or not, parents are the role models for the money habits of their children.

Lessons Learned 

My own parents told me time and time again, study hard, stay away from drugs and alcohol, work hard and you will go far. My dad was also sure to throw in “boys are bad” speeches to all three of his girls, as we entered the teenage years. I can remember lessons from my parents about why chores build character and lessons from our church about how letting negative influences into your life can tear you down. For most of my teenage life my father characterized behaviors as things a respectable woman should or should not do. (Behaving as a respectable woman for your entertainment includes things like not being out after 10pm, staying in a “bad” hotel, or my personal favorite, not sitting on a mattress in front of a man as it could give them the wrong impression.)

Because of these lessons, I gradated college and law school with honors. I stayed away from drugs and alcohol. In fact after 7 years of additional schooling, I can honestly say I have never been to a “frat party.” I have a strong work ethic which has allowed me to be promoted to management in nearly every position I have held. And I conduct myself in a manner in accordance with the behavior of a respectable woman — which simply means I have a difficult time mattress shopping.

Mixed Messages

For all the lessons I received, my parents only said one thing about finances – “save your money.” There was no discussion about how or what that means or what to do with your saved money. We just didn’t talk about it. But what I saw made an impression. My parents had a stack of credit cards that were as big as my head, rubber-banded in the top drawer of my dad’s desk. There were also stacks of cash lying around. It wasn’t uncommon for my sisters and me to help ourselves to the cash without either of my parents taking notice. Every other year, it wasn’t unusual for my dad to purchase a new car. Sometimes the car would be around for only a few months and then there would be another new car. The furniture in my home changed to my mom’s liking – often. We had an entire room full of whatever toy we wanted and like cars and furniture, it was out with the old in with the new. We vacationed, we toured fancy homes that my parents considered moving us into, we got new wardrobes every fall, we wanted for nothing.

Living Blind

Now because of these lessons, I was in trouble. I did not know about the perils of credit cards, budgeting, saving, or delaying gratification. So when I went away to college I just kept signing on the dotted line for my very expensive education without understanding interest or worse compound interest. During college, I found the joy of credit. I went to Broadway shows, traveled, stayed in very respectable hotels and went out for incredible meals thanks to my pals Visa and Mastercard. When I graduated and began working, my retirement strategy was simple – to not care.

New Perspective

About a year and a half into my professional career, I began to see the downside of my parents’ lifestyle – through the eyes of an adult. My dad fell ill and stopped working, they still hadn’t paid off their home, they had no savings, and they were struggling to pay the mortgage while my dad was applying for his pension early. To this day almost a decade later, despite my dad receiving a generous pension, my parents continue to struggle to pay bills. This time not because they don’t have any funds but because of a severe mismanagement of what money they do have. Despite the limited income, my dad has canoes, a boat, and recently added a trailer to his collection. Yet, they continue to need assistance meeting monthly obligations.

 Fortunately, like other learned behaviors, you are able to re-train yourself to practice better money management skills. Budgeting is easy, in theory. You have X amount of money coming in and you cannot spend more than X. Done. But it is more than that, it includes setting aside a savings, setting aside money for retirement, setting aside money for wants, and making sure all of your needs are met.

Delayed Gratification

The lesson I took away from my childhood like so many others, is I should have what I want now. Even if my parents had investment accounts and were saving an amount equal to or greater than their spending, because we didn’t talk about it and I never saw that practiced, I still would never have learned the importance of saving and delaying wants.

When you have that “I should have what I want now” mentality even when you are not spending more than you make, you will not make saving for later a priority because delayed gratification is not hardwired into your thinking.

Making Change

Re-training yourself is just as much about changing your thought pattern as it is changing your spending behaviors. I realized that I did not want to be “like them” and sought out a new role model. I read up on investments, savings, interest, and even insurance, took some skills from Suzy Orman and Dave Ramsey. And I made the change. As you watch your money grow, it is empowering and satisfying in a way that new clothes and cars just doesn’t thrill.

Helping Others

As I counsel couples on budgets and changing perspective, I empathize and connect because I too had  to make that mental jump and while the grass may not always be greener on the other side, in the case of money management – I can say without doubt, it is greener.

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