We learn a lot from our parents. Life lessons and skills but also their mannerisms and habits; both good and bad. If your parents have poor spending habits, is it more likely that you will?
Watch and Learn
As a child, I learned how to avoid creditors. In fact, I normalized the fact that creditors called the house at all. I was not the only child to have learned this behavior. My mother’s spending habits have been passed down to my brother. He is in his mid-40’s, yet his credit score is still suffering from the years he spent paying the minimum balance; something he learned from our mother.
Having parents with money troubles is difficult for three major reasons:
You are without support. I am not referring to financial assistance, but simply asking my mother how to negotiate an interest rate is not an option. Asking her to help me set up a budget is futile. This makes it very difficult to learn new habits.
They can drag you down with them. It is a very odd emotion I feel when my father asks me for money. I know it is slightly embarrassing for him so part of me feels obligated. However, I am not in a position of having a ton of disposable income and have to make sure that I do not get too far under while trying to help my father out. I know his goal is not to put me in the same situation as him but if I am not careful, it could happen.
You have less access to money. The temptation of credit is greater because you cannot simply ask your parents for money/to buy you something. To keep up with peers whose family’s are in better financial situations, you will be tempted to use credit to keep up the appearance. This is likely how your parents got into debt in the first place.
How To Overcome Family Debt Problems
1. Educate. If you are reading this, that is a step in the right direction! You need to be pro-active by educating yourself about personal finance, interest rates, savings accounts and balancing a budget. Use personal finance blogs, books or any other informative guide you can to best assess the direction you should take.
2. Resources. If you cannot use family as a resource, take advantage of the other resources you can use. This includes emailing blogger’s for advice or more general information and chatting with close friends about how they learned about investments. Try to gather as much information as you can from the sources you trust.
3. Support. Have a friend remind you weekly to check your budget. Find a positive person you trust talking about your money issues with, to help support you emotionally as you get started. While being in debt is a financial problem, it has a huge emotional affect on one’s life. Having someone to talk to about it will be very helpful.
4. Confidence. You will not always be in debt, if you do not want to be. It is possible for you to pay it off. Don’t believe me? Take a look at several of the personal finance blogger’s who have dug their way out of hundreds of thousands of dollars of credit card debt! With a plan it is possible. You also need confidence to negotiate payment plans, interest rates and contracts. The more you learn about those topics, the more confidence you will have in knowing when company’s are taking advantage of you.
5. Patience. Although it might have taken you less than a day to spend all that money, it will definitely take you a while to pay it all off. It will be difficult at first because the improvement is a slow one. However, when you pay off your first high-interest bill, you will feel great, I promise! Having support is key for you to continue being patient instead of losing all hope.
6. Think Long-Term. Credit Cards have always been about the “now”; that is the entire idea of credit. So while you may be very happy right now, in a few years you will become miserable. If your parents were in credit card debt, it should not be too difficult for you to see how unhappy they were buried under bills, even if it made for a comfortable lifestyle. Always remind yourself of that and keep thinking of your long-term goals. Sacrificing to pay more than the minimum payment may not be fun now, but it will lead to many more years of less-stress and better investments.
Readers: Have you been influenced by your parents’ spending habits?