I come from a long line of butchers, millers and middle-class shopkeepers who’ve embraced a protestant faith in the virtues of hard work. Both of my parents have laboured incessantly all of their lives and have entered their retirement in a well-deserved state of modest financial security.
Sadly, their über-industrious outlook on how to live life has not entirely rubbed off on me. I’m not trying to suggest that I fall on the lazy end of the work-pleasure spectrum. Let’s just say that days during which I work myself to an absolute standstill, fall into bed at night, comatose, only to wake up early the next morning to do it all again – not an uncommon occurrence for my folks – are blissfully few in my own life.
I do think, however, that through the years, I have learned a few things about how to deal with money from my parents – most of them good and a few not so great.
For starters, I reckon that a smidgeon of their work ethic has rubbed off on me – a basic understanding that making money takes a certain amount of elbow grease and that it won’t just magically fall into your lap.
I also believe that I’ve inherited an appreciation of the value of being frugal when necessary. Spending money they don’t have was never a good idea for my parents and borrowing it from others, be they banks, friends or family, was always to be approached with a good dose of caution. Keeping all things financial relatively tight and never exposing myself to major risks has meant that, on the whole, I’ve never had to deal with a devastating personal finance crisis. It’s also made me a woefully pathetic poker player.
One thing that I have always loved about my parents’ attitude towards money is the completely selfless way in which they are willing to share it with those they love. The idea of ‘paying it forward’ has been at the heart of their approach.
They helped me and my wife Sam buy our first house while keeping our home loan manageable. We’d never have been able to do so on our own. I’m baffled to understand how young people break into the housing market on their own steam and am forever grateful for my parent’s help in getting us there.
They’ve always been meticulous in making sure that both I and my younger sister were equal beneficiaries of their financial support – a crucial ingredient in keeping everyone happy. This way of investing not only in your own interests, but also in those you care about definitely runs in our family. My folks learned it from my maternal grandmother and it’s important for me to pass it on to my sons.
My mom is a master saver and forward planner. Over the years, she has made working towards a financially secure retirement an absolute priority by putting money into several annuities and similar investment vehicles. She wouldn’t dream of prematurely cashing in on any money set aside for the future. Unfortunately and somewhat worryingly, this happens to be a learning I have yet to successfully implement fully in my own affairs.
Not all of the things I’ve discovered about money by watching my parents have been entirely positive. For all their fiscal conservatism, for instance, they do have a tendency for spuriously spontaneous spending, particularly my dad. If he’s got a bee in his bonnet about something, a new hobby, say, and he comes across a gadget or a piece machinery that will enhance that new project, he’s likely to buy it immediately and without a second thought. I have that tendency, too, and definitely find myself having to hold back from engaging in dubious shopping behaviour on occasion.
Overall, I feel that I’ve managed to adopt some invaluable financial habits from my parents, but I fear that I haven’t done quite enough. I worry that I’m going to end up being the faulty cog in the perennial ‘shirtsleeves to shirtsleeves in three generations’ cycle.
The idea is that individuals in one generation work hard to bootstrap themselves from humble beginnings to financial respectability only for slackers in a subsequent generation to squander it all, leaving a new crop of more savvy clan members to pick up the pieces once again, and so on and so on.
Not wanting to be the freeloading lazybones who plunges the family fortunes into a downward spiral has definitely been a major focus for me. It’s led me to examine the reasons behind my parents’ financial accomplishments and to adopt them myself. I’m not quite there yet, but making steady progress.