Is it better to learn about money the hard way?

The other day, having had enough of my own company, I was working on my laptop in a coffee shop, when a father and daughter sat down in the booth opposite me. I could clearly hear their conversation and – as you need both hands to eat a cupcake – I was idly listening to their conversation instead of writing.

The gist of the conversation was that the father and daughter had come together directly from the bank, having just opened up an ISA in her name. From what I could tell the father had made the maximum annual deposit (£5,340) into the ISA for the daughter with his money and was giving her a serious talking to about the things that the money could and could not be used for; i.e., shopping bad, university good.

The girl was around 17, probably just about to start university, and was very nonchalant about the quite generous deposit her father had just made into her account. She probably had no concept of the fact there are university students around the country right now who would give their eye-teeth for a fraction of that generosity; and while apparently listening dutifully to her father’s speech, I could fairly hear her mind ticking over as she calculated how many trips to Topshop she could wrangle out of the cash.

It got me thinking about whether the way you learn about money as a young adult affects the relationship you have with it later on. If you have parents with money – or even just parents who are generous with their money – are you less likely to take money matters seriously? And vice versa, if you come from a home where money was tight, are you more careful with debt and credit cards because you know that there’s no one who will be able to help you if you make a mistake?

I think it’s interesting because the man in the coffee shop was doing what he thought he was best for his daughter’s future, but I wonder if he was really doing her any favours in the long-run.

What do you think? Is it better to learn about money the hard way? Or do you think that your money habits aren’t influenced at all by your background?