LOUISE FAIRSAVE: Parents on money
WITH MOTHER’S DAY passing during May and Father’s Day just passed, let us consider how our parents have influenced our financial life.
What lessons have we learnt?
“I can’t remember my father teaching me anything about handling money. My father was never around, anyway. Their time was different to mine. It would be very little they could teach me because we were so poor growing up.”
This was the first response that I received to my question, “What did your parents teach you about money and investing?”
I gauged that the respondent was about mid-fifties. He was self-employed. When I questioned further, he was able to realise that he had learnt some financial lessons from his father – at least, what not to do with his own children. For sure, his father was the breadwinner in the family whereas his mother managed the household finances.
On the other hand, his mother had taken him to open his first bank deposit account at 15 years old. But even before that, she had introduced him to piggybank saving. His mother had also taught him to give part of his savings to the little mission church in the village. This important giving ritual was part of his early training.
He also remembered that his mother had started giving him a regular small allowance from the time he entered secondary school. Before that, any money that he had received was occasional or was given as gifts from relatives and friends of the family. It was from his regular allowance that he was encouraged by his mother to save. The motivating prospect was that with enough savings, $10 at that time, he could go into Bridgetown and open a bank account.
For him, having his very own bank account was exciting. He vividly remembers that bus trip to Bridgetown with his mother and the fine details of that transaction at the bank. It was a very important step in his financial life. He felt like he had become a real citizen after opening that account and grasping his very own passbook. He still holds that account at that bank on Broad Street.
He also recalled the example his mother had set through her scrimping and saving to make ends meet. Such economising was a necessary tool of survival in those days.
Another respondent, in her early 30s also said “nothing, really.” Her father had died before she had grown up. She did not believe that her mother had the kind of exposure to teach her about handling money. Her mother had been very careful with money. The daughter did not feel she followed that example too closely as she enjoys spending.
Deep reflection and remembrance will eventually cause most adults to point out the various examples that were set by their parents, good and bad examples. There is a lot learnt. Most of it was about saving. Some of it was about avoiding debt. Very little of it was about investing.
That is really the next big hurdle – really understanding the basics and the important role of investing and passing it on to our children. If we want our children to adjust successfully to adult life, we need to take the time to ensure they know the basics of money management. This is just a clarion call for you to help yourself and your children as early as possible. They will surely thank you in the best way possible – by their greater likelihood of being financially independent, and maybe even giving back to you in later years.
• Louise Fairsave is a personal financial management adviser, providing practical advice on money and estate matters. Her advice is general in nature; readers should seek advice about their specific circumstances.