The 4 Bad Money Habits We Pick Up From Our Parents (And How To Break Them)
Bad with money? Blame your parents. According to researchers, our bad money habits are the result of generational patterns. Here’s what you can do to break them.
"My friends tell me I’m stingy, but it’s just the way I am,” says Kate. A project manager at an IT firm, Kate earns a good wage and can afford a comfortable life, but she isn’t living one. Like Mark Zuckerberg, she only has a few outfits one rotation. Unlike Mark Zuckerberg, she hardly ever buys anything for herself.
She feels guilty whenever she goes out with friends and spends. And she still lives in the same dingy little apartment she’s been living in since she was in university, even though it’s a dangerous part of town and she can easily afford to move.
Kate says that her stinginess is just part of her personality, but according to financial psychologist Brad Klontz, it’s a lot more than that.
“The No. 1 lie we tell ourselves about money is that our financial problems are the result of us being crazy, lazy, or stupid," Klontz tells Business Insider. “It's actually totally predictable based on where you grew up and what you were taught.”
Wrong Money Habits:
Your parents may have passed on a healthy way of handling and relating to money, but many of us have picked up some bad money habits from our parents. According to a 2011 study led by Klontz, these are the common bad money habits we pick up from our parents:
1. Money Avoidance
According to the research, people with money avoidance tend to think that good people shouldn’t care about money and that having more than you need is wrong. They also tend to think that rich people are greedy and that most rich people earned their wealth by taking advantage of others.
2. Money Worship
On the other side of the spectrum are the money worshippers, who believe that money can solve all their problems. These people are never satisfied with what they have, and they also believe that you can’t trust people around money.
3. Money Status
These people believe that their self-worth equals their net worth. Therefore, poor people don’t deserve to have money because they’re lazy. They believe that good people will always have money. They also put a lot of effort into appearing that they’re well-off.
4. Money Vigilance
People with money vigilance are overly secretive about their finances and tight-fisted when it comes to spending. Think Scrooge. Or Kate. Though these people are financially secure, they don’t let themselves actually enjoy their money.
According to Klontz, a financial psychologist and lead author of the study, the first step to overcoming these bad money habits is being aware of them. Ask yourself:
- What three things did your parents teach you about money?
- What is your earliest money-related memory?
- What is your most painful money-related memory?
- What is your biggest financial fear?
“Addressing these can uncover deep-seated patterns,” Klontz tells LifeHacker. “For example, if your parents never talked about finances, you may have interpreted that as meaning that money is unimportant. Whereas people who grew up with spendthrift parents who modelled excessive buying are at risk of inheriting the attitude that more stuff will make them happier. They’re likely to use money as an emotional Band-aid.”
Once you identify your money habits and how they’re affecting your finances, you can start taking steps to change for the better.
READ: How To Save Money: 5 Must-Know Tips To Kickstart Your Savings Account