5 Bad Money Habits You Picked Up In Childhood—And How To Break Them

Are you a big spender or a hasty lender? Studies show that your parents are to blame.

“The money patterns we observe in childhood are the primary source driving our financial decision-making later in life,” according to Edward Horwitz, Ph.D., associate professor of behavioral finance at Creighton University Heider College of Business.

Money Habits We Pick Up From Childhood

Financial coach Christine Luken agrees. “Most of us have money narratives from our childhood years, which color our present financial behaviors,” she notes.

Below are common financial habits you most likely developed during childhood and inadvertently inherited from parents,

1. You binge-spend.

Overspending is rooted in deprivation. If your parents were penny-pinchers, you were most likely left feeling denied as they strove to adhere to a tight budget plan. Now, you can’t control yourself when it comes to buying whatever catches your fancy.

2. You feel entitled to live a fancy life.

If your parents showered you with gifts and lived a lavish lifestyle, they inadvertently trained you to live big. You expect to always have the same lush lifestyle, even if your income cannot realistically meet your needs and whims. This often leads to your becoming trapped in a non-essential debt pile.

3. You hand away money out of a guilty conscience.

Growing up, you must have seen your parents being charitable and generous, which ingrained these values into your subconscious. As a grown-up, you can’t say “no” to people who borrow money and can’t resist giving to good causes as, if you don’t, guilt eats you up. While there is nothing wrong with being charitable and generous, not keeping back enough to meet your own needs is a problem.

4. You’re reckless with money.

Money just comes and goes through your bank account. You live from paycheck to paycheck with no financial planning whatsoever. Thoughtless spending can be traced back to a lack of financial literacy. This is a common consequence when your parents themselves had a lack of financial education and were clueless about responsible money management.

5. You keep waiting and hoping for a financial savior.

This mindset is developed when your family has a financial support from a well-off relative.This “teaches” you that financial help will come when you need it. And often, it leads you to procrastinate about earning your own money and the tendency to spend instead of save. After all, your personal cash cow will take care of it.

How to break the habit?

Break the cycle by being financially independent. Live modestly. Be financially stable and secure your future through savings and investments. You can set up an account with automatic transfers to save money. You should also do your best to ensure that you don’t pass on any bad money habits yourself.

(Read: 9 Times Your Mom Was Right About Money)

According to a Pru Life UK survey, majority of Filipino children do not save their allowance. Brad Klontz, Psy.D., CFP, founder of the Financial Psychology Institute, also adds: “Money attitudes can be insidious in the sense that we may not be able to remember anything specific, but on a subconscious level, kids are very sensitive to that and pick up on this modeling.”

As a responsible parent, you must teach your children not to commit the same financial mistakes.

Explain to family members, especially to children, the reasons for being mindful with money and the benefits of saving to avoid the feeling of resentment. Going grocery shopping with your children is also a great opportunity to teach them about budgeting. As a role model, you should practice what you preach.

Making light of or not talking about money struggles can negatively affect children’s outlook on money. Certified Financial Planner Jean Marie Dillon explains that behaviors observed from parents might also be recognized as ‘harmful and choose to avoid them altogether.’ Emanate a positive attitude toward money matters and explain the essential value of money to live a comfortable life.

Sources: Daily Worth, Forbes, Well and Good, Bustle, Business Insider, Lifehacker