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 daughter 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?
We are totally the products of our upbringings! I say you learn the most about money from your parents but then you also learn from experience. Case in point: Me. I was very fortunate to have the financial responsibility ingrained in my brain from my father. When I was 4, my parents split and my mom squandered away her “half” of the family money, while dad lived off of his (she got the house) and was very frugal and we got by while he worked a bit and delicately used his savings.
As things got better and I got to college, he and I lived comfortably. Through scholarships I paid for my undergraduate education, but he generously contributed to my graduate education. He set a foundation for me and even gave me a much needed boost- but I learned the most when I made my own mistakes and truly learned how much it costs to live in a city while working part time and going to graduate school.
I appreciate every little bit he helped me with along the way now. I realize how hard he’s worked because now that I earn on my independently- I know the value of money and how much (or little) it can get you!
I know I made mistakes and he was there to help me out and I didn’t learn much (I earned an income but if I overspent, he would chip in), and now that I’m older and want to be responsible for myself, I realize that if I go on a shopping spree I don’t want to burden him with my foolishness so I have learned to be careful!
BTW- I loved Confessions of a Shopaholic, great picture to use!
This has been the most thought proving think I’ve read in a while. I was writing up a comment and it ended up getting so big that it turned into a blog post instead. Head on over to Sterling Effort to see my somewhat roundabout thoughts on the subject
Thanks again for getting me thinking 
Great post which highlights a dilema for lots of parents. It’s a tough one! As a parent of a young child I’m acutely aware that if I don’t start saving for their university education now it may ultimately even rule out higher education as an option for them. On the other hand having had to work through university myself I did feel it gave me a better appreciation of what I was working towards. If I could get to the point where I could fund their essentials (rent, food, books etc) and leave them to earn money for the other aspects of Uni (e.g. drinking) I’d feel I’d put them off to a good start.
I can identify with this sotry. I have a daughter who just turned 18 and she will be headed to college this Fall. I have a college fund for her, but she certainly doesn’t seem that motivated.
I agree with JaseP — it’s best to give university students money for the bare essentials, like rent and a small grocery stipend, but make them earn enough to cover other things, like their electricity/gas bills, their mobile phone, their clothes, etc. This way they still learn to budget and care for their money.
I think parents have the best chance at influencing their kids about money if they start working on it way before they’re teenagers. By the time they hit high school they want to practice doing things without parental approval, so instruction at that age on how to handle money is way less likely to stick.
That said it also depends on the kid. Some parents don’t need to do very much to produce financially responsible children. Example: my parents didn’t directly teach me about money. I was always highly encouraged to save any gift money I received and I got some lectures about money, but other than that nothing. Aside from amassing more college debt than I needed to, I’ve never had problems with money… never been tempted to run up my credit card. A similar upbringing in other kids might have produced spendthrifts. My brother certainly leans that way, although as far as I can tell he doesn’t actually have any credit card debt.
Hi FruGal. I live here in the USA but grew up in London
My parents are english and continue to live there in the UK. Anyway, growing up, it seemed as though we were always broke. I mean, we were in fact poor. The girl in your article doesn’t realize how lucky she is because the lack of money in my household meant that university was out of the question for me, something that I’ve never gotten over! My mum didn’t work and my dad worked at a lower paying job so money was scarce. The problem was that no one ever discussed personal finances. All I ever heard was that we had too many bills, not enough money to pay them and no other solution. Consequently, when I left home in my 20s, my money management skills were completely non existent. I racked up debt and hoarded stuff to make up for (among other things) hardly ever receiving the things I really wanted growing up. I learned about personal finance the HARD way. After hitting rock bottom twice financially, the most recent in 2007/2008, I finally learned that I had to do things differently. It took a very long time to learn that lesson but that’s what happens when household finances are treated as a secret shame and not shared or used in an educational way with the children living in the household.