How Much of Our Financial Destiny is Influenced by Our Parents?

Michael QuanEducation, Family, FI / FIRE, Habits, Misc, Personal Development29 Comments

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Now that I’m older (and allegedly wiser), I can’t help but recognize certain patterns in this world. As a parent myself, I now ponder like my parents once did…

The Same Apple?

One of these observations is tied to the old cliché – The apple doesn’t fall far from the tree.

If you’ve never heard that saying, it usually is in reference to children becoming quite similar to their parents in some manner.

I suppose it makes logical sense.  We tend to parent our own children as we were parented (many times unconsciously).

Have you ever had an epiphany that you’re just like your parents?  How about how you treat money?  Are your views similar to theirs, or different?

Parental Financial Influence

How did your parents deal with money and personal finances?

I think it’s natural to observe and mimic the way we see our parents do something.  Doing the same with money only makes sense.

This isn’t inherently bad, except that most of our society shies away from learning about personal finance.  It’s something that’s not taught in our schools and we’re left to figure it out on our own.

Unfortunately, we are then destined to repeat our parents’ financial mistakes.  Unless…

What Makes the Difference?

When individuals veer from their parents’ financial behaviors, I typically observe an individual making a conscious choice to change their particular situation out of the avoidance of pain, or the pursuit of pleasure.

I feel like I was pretty lucky.  My Mom and Dad were complete opposites with money.  Thus, there was no assumed “right way” of doing something and I had the opportunity to evaluate and choose my own path.

My Mom was a fantastic spender and really enjoyed life and experiences.  Later on in life, however, I did see her struggle with her finances some.  I give her a lot of credit raising 3 kids by herself after my parents divorced.

My Dad, on the other hand, didn’t like spending money.  He was pretty frugal overall and tried to cut back wherever we could.  This was a primary reason I grew up thinking we were poor.  (Ironically, once I was much older, I was able to observe his generosity – that too has influenced me in my later years).

My Own Observations

Although I still feel like I’ve taken my financial destiny into my own hands, it’s interesting to note my financial habits still mirror both of my parents.

I still buy the occasional “toy” like my Mom used to, but not as many.

Likewise, I also try to save and invest like my Dad, but not as frugally.

Ultimately, I’m satisfied landing somewhere in between because I believe balance is a happy place to find yourself.

It will be interesting to see how my children grow up and what their beliefs about money are.  They are growing up with far more than my wife or I ever had, so I definitely do not want to spoil them.

What Else Alters Your Financial Destiny?

Strong emotional events can become the catalyst to shift momentum in your life.  Thus, a powerful and emotional event around money can impact your current financial trajectory.

I’ve observed many people who have made conscious decisions to change their path because they grew up and experienced some negative stimulus around money.

For example, my one friend’s parents used to make a significant 6-figure income.  Although they were cash-flow rich, her parents couldn’t seem to hold on to any of their cash.

Eventually, gambling and credit card debt crept into the picture and my friend witnessed firsthand the downward spiral of her parent’s financial situation.  When she was just a young girl, she was forced to deal with creditors and debt collection agencies tracking down her parents.  Let’s just say they weren’t too nice.

After her parents declared bankruptcy, she vowed NEVER to have that happen to her own children and became a super saver.  This has both served her, but also hindered her.  It has helped her to ensure the certainty and well-being of her family, but the negative is that she never feels completely secure no matter how much money she has.

Final Thoughts

Your financial destiny doesn’t need to be written in stone.  You have choices in this life.

I personally believe we are the happiest when we are in the pursuit of something greater than ourselves.  So, the game of money and finding our financial destiny is a part of that journey that can impact you, your family, and your friends.

Figure out what you VALUE first before pursuing money or FIRE.  You may realize that it doesn’t cost as much as you once thought.

And when you’re ready to pursue financial freedom, then check out my book – The F.I.R.E. Planner. It’s an interactive guide that will show you the exact blueprint I used to achieve financial independence in my 30s.

Readers, how does your financial destiny look like today?  Is it closely tied to your parent’s financial story, or not?

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29 Comments on “How Much of Our Financial Destiny is Influenced by Our Parents?”

  1. This has always been something my siblings and I have looked at comparing our own choices surrounding money to the choices our parents made. To be honest it’s a complete flip. I don’t blame them at all it was just a case of a lack of planning that so many people are seeing the repercussions of as they get closer to retirement or not being physically able to work anymore. Great article, thanks for the the bit of self reflection!

    Jordan @ New Retirement

    1. Interesting right, Jordan? I also wonder if parents would have made different choices had they been given more information, or if they would still make the same choices regardless. I suspect it would just depend on the individual.

  2. Interesting topic. Both my parents were frugal and those habits have been ingrained in my head. However, I seen friends in the same situation (frugal immigrant Asian parents) and they grow up to be spendthrifts. They felt like they were deprived during childhood and are trying to make up for that time period. I guess it’s a little nature and a little nurture.

  3. Hi Michael. I think you can either be like your parents financially, OR the exact opposite of them.

    My parents spent tons of money on expensive “toys”, and I’ve vowed to not be like that.

    1. Mr. Tako, that certainly seems like a common thread here, doesn’t it! I guess it all boils down to the choices we make around what we value and don’t.

  4. My mother was a teacher and used to say “the apple doesn’t fall far from the tree” about the students of her parents…

    I think my finances are different than my parents mainly because I’m taking the entrepreneur route. But as far as earning and spending, fairly similar.

    1. Haha, that’s what my wife says about her students too!

      What do you think led you to become an entrepreneur if you didn’t observe it firsthand at home?

  5. This apple fell right under the tree! I was most influenced by my mother, who I was closer to, and she was a saver by nature. I think my father was a saver as well, at least until her retired. Both of them were involved in the family finances, and that’s the way my wife and I are. I think for most people, you either emulate what you saw in one or both of your parents, or you try to do the opposite if you didn’t like what you saw.

    1. Gary, that’s excellent to hear your parents were both involved in the family finances and also on the same page. Sometimes the apple falls right under the tree and it’s perfect!

  6. I definitely see both of my parents in my financial habits. Dad is a big DIYer on home maintenance, as long as he is capable. I’ve learned a lot about using power tools from him that have helped. He’s also a big picture kind of person. Didn’t care about the day to day and little things so long as there was money in the account to do what he wanted (cars, vacations, etc). Mom deals with more of the details. Food budgets, planning vacations, after school (when we were younger). But she’s more of a spender a la the “Target problem” (go in for one thing, leave with a cart full of stuff). She always knows when the sales are going on in various stores and how to rock the bargain shopping stores like TJ Maxx, Home Goods, Marshalls, etc.

    1. Kimberly, your parents sound like they worked decently as a team with the family finances. DIY is an awesome way to save money and also share time with family if you can get others involved. I wished I had more opportunities to do this with my own Dad before my parents split.

      Since your Mom was the budgeter and also the spender, did she make adjustments after leaving with a whole cart of goodies?

  7. I sneeze like my mom, but I don’t do money like either of my parents. It seems like a lopsided comparison because their circumstances were so wildly different from mine.

    They were immigrants, new to the country with no money or assets, and so few resources on how to navigate the financial system of credit and debt in this country. I grew up watching how they struggled with managing and making money, it was mostly just keeping the dam plugged, but I had the internet at my fingertips to figure out what on earth this whole debt, loans, savings, and all that stuff was about and how it works.

    It turns out that my instinct for money management is inherited – I’m most like my grandmother who I didn’t even meet until I was much older! But all the decisions I made, and being a saver at heart, were strangely similar to the kinds of decisions she’d made. My almost extreme embracing of frugality when it was necessary is also similar to her, as well. I didn’t learn a lot of this til later in life, and I hope that JuggerBaby inherits some of these instincts too, so it’ll be easier to pass along what I’ve learned.

    1. Very interesting, Revanche, to hear that your instinct for money management skipped a generation and you didn’t even know her until you were later. Circumstantial? Hopefully, JuggerBaby will inherit financial instincts directly from you! 🙂

  8. My dad had his fair share of financial mistakes. I saw what he did and would never do the same thing. My mom was the one holding our family together with her frugality. Later in life, both my parents have become pretty frugal and are very generous to their children. I’m not perfect with finances, but I think being generous with the right family members who work hard is always the right thing to do.

    1. Thanks for sharing, Ms. FaF. I’m happy to hear you didn’t repeat the financial mistakes of your Dad. You Mom sounds like she was a strong woman! I agree with your notion of generosity 100%.

  9. Both my parents are super frugal. So I guess that’s where I got my frugality from. That said, they know absolutely nothing about investing and general finance. So luckily, I read some great books and found some great mentors along the way!

    1. Hey Tim, I think frugality is a nice financial habit to inherit. Combined with your investing self-studies, I suspect your financial destiny is bright! 🙂

  10. My parent’s are opposite of your’s. My dad was/is the spender my mom is the saver. Unfortunately for her you can’t out save a spender. I was definitely influenced to have control over my money as way to avoid some financial stress that comes with it.

    1. Yes, Grant, it can be very hard to out save a spender! Since my Dad was the saver, I suspect he just hid some money away from my Mom that wasn’t touchable. She couldn’t spend what she didn’t know existed!

  11. My parents are spenders and not savers. My dad will buy a jacket because it is 60% off. Does he need the jacket, no! But he likes the idea of getting a deal. He is still working in his 70s despite making a lot of money at a younger age. Part of that is the immigrant mentality and his generation I think, but sometimes I wish they had made better decisions.

    For now, my brother and I help them as needed. I buy tickets for them to come visit us in Cali and things like that.

    As for my spending, I used to spend a lot. Now I try to be frugal but find a balance. It is hard as I am still insecure. I have a large mortgage and school debt still hanging over me. I think once the school debt is gone and the mortgage is lower, I will feel better.

    1. It’s hard for savers to understand a spenders mentality, but it’s something I try to be compassionate around. That’s nice of you to help out your parents. I know it can be a slippery slope sometimes when you see them spend it in a manner that you would not.

      Great job converting yourself to being more frugal. Just keeping chipping away at your debts and they will eventually evaporate!

  12. I agree with your hypothesis => the apple doesn’t fall far from the tree! My dad started out his career as an accountant at a big bank. I started off as a math major, but my first job was a bookkeeper and now I’m working as a statistician in a bank. When I was a teenager, I thought banks were boring (well, they still are), but lo and behold, here I am!

    Also, now my dad has been working for small businesses and himself for the last 15 years. I’m in the same boat, I want to create income streams for myself through my businesses and real estate.

    1. Erik, I can tell from your personality that you’ve got the drive to make your business successful. Keep at it and don’t look back!

      That’s funny that you ended up a banker like your Dad.

  13. I wonder about this a lot. My mom was the first in our family to receive a college education, which she paid for herself in cash (and with help from the military). She and my dad escaped from the poorest county in Oklahoma and were earning nearly $200k by the time she was 40. She did things differently than her parents did, and it paid off in a much higher income and quality of life. Unfortunately, that also came with lots of expenses and debts. I grew up seeing the consequences of the debt, but with an appreciation for education. I hope I can show my kids how to live small, manage money wisely, and life well.

    1. Mrs. PP, that’s wonderful your Mom and Dad took their financial destiny into their own hands. It’s not easy to escape a place that you’ve grown up unless there is a significant reason to do so.

      I’m sure your kids will fair well with your guidance. 🙂

  14. I feel lucky because both my parents were frugal – they were children during the Great Depression. I remember my Mom repeatedly telling me to “always live below your means”. Good advice! It was one of the main reasons that I could retire early in 2012.

    My Dad was very frugal also – he always did most of his own home repairs and would even use his vacation days to paint the house. He was also interested and invested in Blue Chip stocks. So I grew up thinking that everybody invests extra money in the stock market. That also helped me retire early.

    1. That’s interesting to hear, Mr. FF. I can imagine the Great Depression affected a huge chunk of the population.

      Isn’t it fascinating when you grow up in your own little world, it’s surprising what occurs outside of our own families? Glad to hear you were on the positive side of the equation. I suspect your Dad’s blue chips performed well for him over time?

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