How your childhood could be affecting your finances

African mother in her back yard counting coins with her daughter and throwing them into a piggy bank.

African mother in her back yard counting coins with her daughter and throwing them into a piggy bank.

One of the greatest gifts you can give your kids is to prepare them to be responsible, empowered adults around money” – Wealthminder

Your upbringing can have a tremendous effect on how you make decisions as an adult. This can be in a positive way but other times, the results can be detrimental to your financial health. However, the good thing is that once you realize and understand the root of your bad habits, you can take ownership of them and make a conscious effort to change them.

Here are five things in your childhood that could be negatively influencing your finances, and what you can do to overcome them.

Financial status in your household while growing up

How your parents, guardians, or others around you managed money has a huge influence on how you handle yours. If you grew up in an indigent family, or your family was financially stable, but your parents chose to be frugal with their money, this has the capability to change your mentality about your finances in the future. For instance, some people from destitute families may feel they will not make it past a certain amount because they do not have an inheritance to give them a head start, while the ones from wealthy homes but with frugal parents may decide to spend all that they have earned in a split second or even lavish their inheritance because they were not given the privilege to enjoy certain things, as their parents’ act of prudence, made them feel deprived during childhood.

To overcome this, parents need to understand that being prudent with finances does not necessarily mean being stingy to their children. Some parents will say it is a way of teaching kids to be responsible once they come of age, not knowing that some of these things can be detrimental to their finances in the future.

For struggling families, it is imperative to start early to coach your children on the importance of financial freedom. Motivate them to work hard, as you do not want them to end up like you. Encourage them, talk to them about the importance of investing and the negative effects of living a spendthrift life. It is crucial you pass this information to your kids, and make sure you include them in the reasoning for being careful with money so that they can learn the benefits of saving and not feel resentful.

You were overindulged by your parents

Some parents tend to overindulge their kids because they (parents) were deprived of certain things as children, and in response, they choose to overspend on their children, making some of these kids grow up living a life of abundance while neglecting the fact that they need to work hard and be better persons in society.

Some of these kids feel entitled to luxurious lifestyles and depend on inheriting from their parents. Some of them end up not having the income to support their lavish lifestyles, which can lead to racking up unnecessary debts.

An important thing to note is that there is still time to retrace your steps and be a better person if you are such an individual. Challenge yourself to see what it is like to live modestly and then put away savings towards more important goals like buying a home, having a comfortable retirement, or starting a family. Set up automatic retirement contributions to force yourself to make better money decisions for your future.

Your parents’ aversion towards early financial education

This is a very common problem, often due to the subconscious perpetuation of their own parents’ lack of financial education. Money has a notorious reputation for being dirty and taboo to talk about. And of course, women have a long history of being kept in the dark when it comes to household finances. So, generations of parents have avoided discussing money matters with their children out of ignorance or preference. This has made these kids grow up to overspend, under-save, and have no interest in investment and financial planning in general, as they do not have early knowledge about money management.

The best way to come out of this mindset is to be informed about basic financial literacy by reading books on personal finance. You can even take it further by hiring an experienced, qualified financial advisor who can offer you personalized guidance, get you on the right track to achieve your goals, and ideally, educate you at the same time. If you have kids of your own, make it a priority to talk to them about money and involve them in your financial activities so they can break the cycle.

The idea of being financially dependent on someone

Growing up in a family where the mother was taken care of by the father and did not have to worry about money is an issue some young women are facing today. Some of these women idle away, waiting for Prince Charming. In their opinion, they should not have to struggle when their mothers did not have to.

This subconscious question commonly results in procrastination, irresponsible money behaviour, and laziness, because at the back of their minds, they believe they are really going to settle with a wealthy person who will eventually save them financially. However, it is essential that young girls wake up from this unrealistic fairy-tale world, and save themselves. They need to learn how to work hard and gain the right knowledge to be financially independent.

That doesn’t mean that they do not need a man to assist them, but being dependent on a man to provide virtually everything they need is not appropriate. In the future, they could inculcate such knowledge into their own children and others around them.

Growing up in a separated home

This is an unfortunate reality for so many families, and a major contributor to all kinds of psychological issues, including those that fuel poor money decisions, in kids.

It is no news that 50% of divorces in marriages are the result of a lack of finances. If you are determined to get married, it is crucial to have the money talk with your would-be spouse, preferably during courtship. Also, it is advisable to make a commitment to always be financially independent, even if you are planning to get married or are already married.

This means having a budget put in place, discussing if you are having a joint account or separate accounts, saving to invest, and making it a priority in your relationship to contribute to your own personal retirement accounts as much as possible.


In conclusion, even if you do not feel you know enough about financial matters to teach as a parent, your influence can have a lifetime impact on your child’s finances. As with most things, a balance must be struck between spending and saving to develop healthy financial habits. The better you portray these skills and discuss them with your children, the better off they will be. They can learn from both your mistakes and your successes.

Children can gain a realistic view of how far incomes go, how to live with whatever they currently have, and how to make the most of that income. Living within your means may require frugal living, but there are also times when spontaneous spending is necessary. Discussions with teenagers about the household budget and understanding why you spend the way you do will set a good example, which can improve their financial management skills as they reach adulthood.

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