How Family, Personal Experiences, and Culture Affect Your Finances
Do not conform any longer to the pattern of this world, but betransformed by the renewing of your mind. Then you will be able to test and approve what God's will is — his good, pleasing and perfect will.
Romans 12:2
In every conceivable manner, the family is link to our past, bridge to our future.
Alex Haley
Five months into their dating relationship, Julie and Sam went to see the Chicago Cubs play at Wrigley Field. In the midst of an enjoyable outing, the topic of money came up. When Julie mentioned that she was carrying a $1,200 balance on a credit card, the flow of conversation suddenly turned into an extended awkward silence. Sam remembers feeling stunned, like a batter hit by a hard curveball that seemed to come out of nowhere. To him, carrying a balance on a credit card was nothing short of irresponsible. Scrambling for something to say, he only made matters worse by offering to loan Julie enough money to pay off her balance. Julie felt judged.
As difficult as that conversation was, it ended up spurring more conversations that helped this couple learn more about the source of each other's financial habits and attitudes. Sam came from a stable, middle-class family. His dad was a college professor and made extra money in the summer painting houses. They lived within their means, always bought used cars, and saved diligently for their annual family vacation. They weren't rich, but they always had enough money in the cash drawer in the kitchen for groceries and other essentials. For most of his growing-up years, Sam's parents bought everything with cash.
Julie jokingly says that Sam's family is right out of Leave It to Beaver, a sitcom from the fifties and sixties about an idealized suburban family. Julie describes her own family as "somewhat more colorful." Her parents divorced when she was five. While her mom had a reputation for knowing how to stretch a dollar further than most, money was always tight. During the years between the divorce and Julie's leaving the nest, there was just one family vacation, a trip to Florida. Julie's mom still reminisces about it.
A few days after the credit card conversation at Wrigley Field, Julie told Sam of a time when she had to help her mom make her mortgage payment. Sam felt much more empathy. Julie also told him that she once had a balance of over $10,000 on credit cards and had paid it off before they met. Still, she felt comfortable carrying a balance and was in the habit of occasionally letting balances build up on her cards. She always found it manageable on her salary. However, as she learned more about Sam's upbringing, she understood why he hated the idea of carrying a credit card balance, and she quickly paid off her balance.
Today, after about a year of marriage, Julie credits those first conversations about money with leading them to a place of greater freedom. "When we got married, there was nothing about our spending habits that we didn't know about each other."
Julie's and Sam's spending habits and attitudes were clearly influenced by how each of them was raised. This is true for all of us, so let's explore how your family, your personal experiences, and our culture have contributed to your current financial situation.
Family
Our families impact the way we think about and use money in countless ways. The problem is, we may not even realize how we have been affected. For instance, you might be extremely cautious with money because your great-grandfather lived through the Depression, and he passed his financial fears down to his daughter, and she passed them down to her daughter (your mother), and she passed them down to you. No one broke the cycle of fear by learning about diversification or asset allocation. Everyone just remained stuck in the financial patterns set by one's great-granddad so many years ago.
Sometimes just by talking about your family's history with money you can see where you got your financial philosophy. That can help you think about whether it's helping you or hurting you, and it just might create the motivation to choose a better path.
The following questions are designed to get the two of you talking together about how your families did the whole money thing:
· How well did your parents deal with money? Did they struggle with money, or were they at ease with financial matters?
· Was money always scarce, or was it plentiful?
· How often did they fight about money?
· Did they give you an allowance? If so, starting at what age? Did you have to work for it, or did they just give you the money? How well did that system work?
· Did your parents ever sit down and teach you about money? If so, what lessons did they teach? Did those lessons stick, or did you resist them?
· Did your parents use a budget?
· Were your parents generous or tight? Did they regularly give money to charitable organizations? If so, which ones? Did they seem to enjoy giving, or did they give out of obligation? Did they encourage you to give?
· How frequently did your family go on vacations, and what types of vacations did you take?
· How well did your parents tip when you ate at restaurants? Were you ever embarrassed at how little they left?
· Were they jealous of others or happy for them? How often did they comment on other people's financial situations, such as the neighbor's new car or a coworker's recent vacation?
· Did they feel entitled, or was it up to them to earn whatever they got?
· Did both of your parents work while you were growing up? How did you feel about their work choices? If both of your parents worked, was that okay with you?
· Were your parents steady in their careers, or did they change jobs frequently?
· Do you think your parents worked too hard or not hard enough?
· Was either one a workaholic?
· Who did the grocery shopping in your family? Was he or she a coupon clipper?
· What types of stores did your family choose when shopping for clothing? Department stores, discount stores, outlets?
· What types of cars did your parents drive?
· How old were you when you got your first car? Did your parents buy it for you, or did you pay for it?
· In what ways have these experiences impacted your financial views or habits?
· Have you adopted your parents' ways of thinking about and managing money, or have you taken the opposite approach? In what ways are you similar to your parents in how you think about and use money, and in what ways are you different?
· Who else influenced you financially as you were growing up? Are there other family members or friends who had an impact?
· Are there any dramatic money stories from your family's past? Did anyone go bankrupt? Make a million bucks?
In addition to our family, our experiences also influence our financial attitudes and habits. In this next section, you will explore what personal experiences have had the greatest impact on shaping your beliefs or behavior in regards to money.
Personal Experiences
I was twenty-five when an uncle died and left me $60,000 in his will. I had no idea he planned to leave me any money. It was a complete shock.
At the time, I was making about $25,000 per year working as a radio journalist. Think of your annual income and multiply that number by about two and a half, and you'll get a sense of how it felt to inherit that money.
I used the money to create my dream job: a newsletter for people who take golf vacations. At the time, golf and travel were two of my favorite hobbies, and I was trained as a journalist. I figured it would be
a blast to spend my life visiting some of the world's greatest golf resorts, playing, photographing, and reviewing their courses. Because I had what seemed like an endless pile of money in the bank, it didn't concern me that I wasn't attracting many paid subscribers. I just kept going. Two years later, I had blown through the entire $60,000 plus another $20,000 on my credit cards. I went from living the life to living in my parents' basement for six months.
That was one of the most difficult, embarrassing, and humbling experiences I've ever been through. For the first two months at my parents' house, I was deeply depressed. Ultimately, though, the experience was used for good. It prompted me to take a much greater interest in spiritual matters and eventually commit my life to Christ.
That financial tough time also got me interested in learning how to manage money well, something I've been studying ever since. But the aftermath of that experience is more complex, and in some ways I still haven't fully come to terms with it. A couple of years ago, while telling a friend about the experience, I was surprised to find myself in tears. Even though so much good has come from that painful lesson, apparently I still had not forgiven myself for not doing a better job managing that money.
What about you? Has any major event shaped your view and use of money? What happened? How did it impact you initially, and how does it continue to impact you?
The final external factor to explore together is how our culture has influenced each of you when it comes to how you deal with money.
Culture
Our culture has a lot to say about money. Think of the advertising you see each day. What are the messages? Ads for new cars are usually not about how long the car will hold up; they're about how you will feel and how others will perceive you if you drive such a car.
What about the name used by the media and our political leaders to describe us? They call us consumers, right? That's the term we read in the paper and hear on the news all the time. Have you ever looked up the definition? "To consume" literally means to devour, destroy, use up, or spend wastefully. That explains a lot, doesn't it?
Consumers take their identity from what they own — the brand of clothing they wear, the type of car they drive. They look to possessions for much of their happiness, and their happiness is often relative. They feel happier when they get something more or when they see they have more than a friend, relative, or coworker has. As a result, they usually have too little money in savings and too much debt.
In reality, few of us are over-the-top consumers. However, most of us look at life to some extent through the filter of a consumer.
To what degree do you think or act like a consumer? Think of your colleagues and friends. Think of your neighbors. How often do you find yourself playing the comparison game? To whom do you most often compare yourself? What comparisons do you make? Do you compare brands of clothing? Cars? Vacations?
Who are some of the worst financial role models in your life — people who are clearly living as consumers and who somehow influence your having bad financial habits? Who are some of the most positive financial role models in your life, people who seem to be least affected by our consumer culture? What do you admire about the way they handle money? How have their decisions impacted your thinking and behavior regarding money?
Continuous Learning
Understanding how your family, your personal experiences, and our consumer culture impact your financial attitudes and behavior is not a onetime proposition. We all continue to be influenced by these factors, so continue to be on the lookout for any unhealthy ways they are at work in your life. And be gentle about pointing out how they may be at work in your spouse's life. If your mate works a lot of weekends, comments like "You're just like your dad" are not likely to go over very well.
Questions such as "Who may have influenced you to work so many hours?" tend to work better.
Originally published March 01, 2011.
