It’s the time of year to celebrate mom and dad! With Mother’s day just behind us and Father’s Day right around the corner, we can’t help but think about all of the life lessons taught by mom and dad, many of which revolve around money.
Similar to our grandparents who grew up in the midst of the 1929 stock market crash, millennials have a unique outlook on money simply because we have seen the worst of the worst. We watched the stock market crash and the housing market drown. Due to all of this turmoil we saw our parents saving more and cutting back on spending. It was a hard-knock life back then, but as a result, our generation is more likely to have a savings account for emergencies. In fact, 49% of millennials say the economic downturn changed the way they viewed saving.
The last recession clearly impacted the way millennials handle money, but money matters still rely heavily on good ol’ mom and dad. According to Andrew Plepler, Global Corporate Social Responsibility executive at Bank of America, “research shows that parents remain the strongest influence on the money habits their children develop and practice as adults.”
The proof is in the numbers: 58% of millennials believe their parents had the greatest impact on their financial habits, and 8 out of 10 millennials agree that their parents have influenced their financial habits at least to some extent. In second place, 33% of millennials say they have learned the most lessons from their own financial mistakes.
Perhaps the most important lesson of all is saving and starting early. The majority of parents teach their children to save and as a result 68% of millennials have savings.
71% of millennials agree that their parents did an “excellent” or “good” job teaching them about money, and 29% of millennials said their parents did a “fair” or “poor” job teaching them about money. Of those that say their parents did a “good/excellent” job, 48% have a monthly budget and 74% have something in savings. Of those that said their parents did a “poor/fair” job, 37% have a monthly budget and 55% have savings. What your parents did or didn’t teach you about money clearly impacts the likelihood you have savings and are sharp with your dough.
Parents can teach their kids all that they want about money but they also lead by example. If your parents overspent and lived a lavish life you are likely to overspend, too. If your parents counted pennies you might grow up to be tight with your purse strings too, or you might go into major debt buying all of the things you felt deprived of growing up. If you were a spoiled child you might overspend, thinking you still deserve everything you want, especially now that you work every day!
The only way to improve your financial picture is to own up to what type of person you are in regards to money. Address why you are the way you are and then find ways you can improve. If you have kids, or plan to have kids, you want to set a good example as well as teach them about money. Even if they roll their eyes, moan and groan, in the end it will be worth it. When they grow up they will appreciate you teaching good habits for a financially secure future.