How childhood shapes your money habits
Money and finances are deeply personal topics. Most people don’t talk about them openly and honestly, often going unspoken even among close friends.
Our beliefs about money are mostly formed by the time we are eight years old. It’s the people around us that show us examples of how to save and spend. We bring these beliefs into our lives and our relationships as adults. Your exposure to money as a child greatly impacts your relationship with money today. From your mindset and financial education to spending and saving habits, here are some ways your childhood may have affected your financial outlook.
Mindset: If you grew up in a household where money was scarce and frequently stressed about, you might develop a scarcity mindset, feeling anxious about finances or constantly worried about not having enough. Conversely, if you grew up in a financially stable environment where money was managed responsibly and without stress, you may have a healthier relationship with it and a more abundant outlook.
Spending Habits: Children raised in families where money was tight may grow up to be extremely frugal, avoiding spending whenever possible. Alternatively, some may overcompensate as adults, spending freely as a way to “escape” past deprivation. If you grew up seeing responsible budgeting and spending, you’re more likely to replicate those habits.
Saving Philosophy: Families that emphasized saving for the future or set up savings goals might raise children who prioritize building an emergency fund, saving for retirement, or investing. On the other hand, if money was always seen as something to be spent immediately (living paycheck to paycheck), it might be harder to develop strong saving habits later in life.
Risk Aversion: If you witnessed financial loss or were taught that investing is risky, you may shy away from stocks, property, or other financial opportunities. Growing up in a family that openly discussed and embraced investments can create comfort around risk-taking in a healthy way.
Financial Education: If you were not exposed to conversations about budgeting, taxes, investing, or debt management as a child, you might enter adulthood with significant knowledge gaps. Many adults who didn’t learn basic financial skills growing up struggle to manage their money effectively and may face financial pitfalls like high-interest debt or poor credit.
Speaking About Money: Families that were open about finances may foster children who feel comfortable discussing and learning about money as adults. Conversely, if money was a taboo topic, you might find it uncomfortable or intimidating to talk about or even think about financial matters, leading to avoidance.
Attitudes Towards Debt: Growing up in a household where debt was normalized (either responsibly, like taking out loans for education or a home, or irresponsibly, like accumulating credit card debt) can affect how you approach borrowing. Some adults may fear debt and avoid it at all costs, while others may see it as a useful tool or even accumulate debt without considering the consequences.
Early Financial Responsibility: If you were encouraged to manage your own money at a young age (through allowances, chores, or part-time jobs), you might have a better understanding of financial independence and accountability as an adult. Those who didn’t experience this responsibility early on may struggle with budgeting or financial planning.
November is Financial Literacy Month, and this year’s theme is “Money on your mind? Let’s talk about it.” Talking openly about money can significantly improve mental health by reducing the anxiety and stress that often comes from financial uncertainty.
When money is treated as a taboo subject, people may feel isolated in their financial struggles, leading to feelings of shame or guilt. However, discussing finances openly—whether with friends, family, or a financial advisor—helps normalize the challenges and provides an opportunity to share advice and support. This transparency can relieve pressure, create a sense of control over financial situations, and promote healthier money habits, all of which contribute to better mental well-being.
Never forget, you are not alone in your money struggles. If you need to talk to someone, reach out for a free counselling appointment today.