Earlier this year, my partner and I were at the tide pools at a beach in Southern California. As we peered into the shallow pools with burgeoning ocean flora and fauna, we were joined by a mom and her two kids.
“Look at the clams!” she said, examining a cluster of shelled sea creatures on the side of a rock. “They’re mussels, not clams!” my partner said, correcting her.
The point of this story: Parents try to educate their kids, yet sometimes they inadvertently steer them wrong. And, whether you like it or not, your parents served as your first role models when it came to life and money lessons. As a result, you may have picked up some incorrect money messages from your parents and other family members. As you grew up, these money lessons became ingrained in you and may have turned into not-so-healthy money habits.
Take a look at some common money lessons that you may have learned from your parents – and why they need to be debunked right now.
Talking About Money Is Taboo
Growing up, Alex Whitehouse learned that money is private and personal, and therefore considered to be a taboo topic.
Reality Check: By all means it’s important to discuss money matters. That’s how we learn how to make better decisions.
“I had to learn about money through trial and error,” says Whitehouse, the founder of FinHealthy.com. “I made mistakes and had to dig myself out of debt, repair my credit, and learn to save.”
Talking about money helps you develop a better relationship with your money. It also helps foster honest communication with those you love.
“Discussing personal finance with friends, relatives, and colleagues can help you learn and avoid mistakes. It helps you become comfortable and confident in your finances, and it can inspire others to do the same.” says Whitehouse.
We Were Poor, and You Will Be Too
Maybe your parents had the attitude that they were never rich, and this means you’ll never be wealthy either. Perhaps they think life is an endless grind, and it’s pointless to dream about wealth and financial independence.
For Jaime Donovan, this came as a surprise because her parents taught her a lot of things about money —how to write a check, open a savings account and save for emergencies. They also taught her how to pay for used or new cars with cash, and how to avoid debt.
Reality Check: Donovan wishes her parents went beyond the basics and taught her that it’s absolutely possible to build wealth.
“For some reason, in their minds, they thought that it was impossible to become wealthy,” says Donovan, a blogger at Young Modern Money.
“I’m happy to say that they’ve changed their attitude about this, but it took years for them to come to an understanding that normal people can build wealth.”
Yes, normal people can certainly build wealth. It starts with understanding what wealth is and that building wealth is about growing your net worth, not accumulating material possessions. More importantly, financial independence is not just about how much money you earn, but what you do with that money.
Money Is a Source of Pain
Perhaps your mom told you that nobody likes their job, and that earning money would be a grind.
This was the case for Evan Sutherland. “With all the bills and all the expenses that come up, my parents taught me that it’s going to feel as though you can never make enough money,” says Sutherland, co-founder of Budgeting Couple.
Reality Check: When Sutherland and his wife started out together and began earning an income, they were pleasantly surprised by how simple money was to manage.
“We always had enough money to pay the bills and buy the things we wanted,” says Sutherland. “How? We used a budget to spend less than we earned, every month. By spending less than we earned, we never experienced money stress, we were happy to pay our bills, and we loved spending money!”
I experienced the same thing. When I started making my own money and learned to create a spending plan, I turned frugality into a fun game. I also used apps to help me track and save money, experiencing very few problems saving a portion of my paychecks.
Never Spend More Than You Need To
My father is the ultimate cheapster. And while he definitely has no problem socking away money, he still buys the absolute cheapest item on the list. No matter what it is. No matter how much joy a fancier option might bring him.
Reality Check: “Sometimes it makes sense to spend the least,” says Jim Wang, the founder of Wallet Hacks. On the other hand: “Sometimes it makes sense to pay more for higher quality, better service, or some other reason outside the item itself.”
I would gladly pay more for a set of tires, and this past year I splurged in a pricey pair of leather boots, trench coat, and so forth. But these are items I value, use a lot, and really enjoy. And I was able to afford each of them.
Talking About Money Is Impolite
It’s imperative to talk about money. You talk about money when you ask for a discount, or when you ask for a raise at work. And you talk about it when you budget with your spouse.
You can also do this when you set financial goals by sharing those goals with others – maybe even asking people you care about to hold you accountable.
Reality Check: You know what is impolite? When you don’t talk about money. Because when you don’t learn about financial problems that your friends and family are dealing with, how can you help them? And, if you’re a freelancer or work for yourself, how do you know what’s considered a competitive rate from clients if you don’t discuss this with colleagues in the same field?
No Need to Worry About Your Credit Score
Maybe your parents were cash-focused and told you to pay your bills on time and everything will be fine. Or, perhaps they told you to keep a balance on your credit cards in order to build credit, or that closing a card won’t impact your score (the truth: it really depends).
Reality Check: Yikes. Sure you won’t have to worry about your credit score if you pay for everything in cash. Otherwise, your credit score is a huge part of your life as a consumer. You’ll need a solid score to finance a car or house, get the best terms and rates on credit cards, or to get financing for a new business endeavor.
Be Your Own Money Teacher
While your parents had the best intentions, it’s important to be your own money teacher. By understanding these money myths, you can start to form healthy money habits and reach your financial goals. Remember: It’s your life, not your parents’. Are you ready to create your own successful money story?