what my childhood taught me about money

The Good, The Bad, And The Ugly: What My Childhood Taught Me About Money

When I was growing up, money wasn’t plentiful. Don’t get me wrong, we always had a roof over our heads and food on the table, but there wasn’t usually much more to spare.


As an adult, my Mum told us that for quite a long period of time when we were young, she would have $17 left each fortnight after living expenses and school costs were covered.


Obviously, this didn’t leave much for fun or luxuries for her or us kids. However, the funny things is, my sister and I can’t really recall going without much despite this lack of financial prosperity.


As an adult, I’ve come to realise that this is because my Mum is a typical Mum. What I mean by this is that she put our needs first, and hers second.


Consequently, despite our financial struggles, we were privately educated, were able to do extra-curricula activities, and her “holidays” involved taking us to competitions for our extra-curricula activities.


Reflecting on my childhood like this made me realise just how much my contemporary position on personal finances has been influenced by it.


As a child, our finances and debt situation was just our normal. However, as an adult, I know that there’s not much about my family’s financial position during my childhood that I want to replicate. 


I came to this realisation just after I turned 30; and it was this realisation helped put us on our current financial freedom seeking journey. Consequently, I thought it apt to share with you what my childhood taught me about money…


Always have a substantial emergency fund

As we didn’t have much money to spare growing up, any unexpected bills threw a major spanner in the works and caused significant stress for my mum.


Therefore, in addition to paying off debt this year, we’ve established a modest emergency fund to cover unexpected costs such as insurances excesses, vet bills, plumbing or other household emergencies.


This account is separate to our savings, more difficult to access, and is designed only for use in circumstances such as the above. Additionally, we make regular transfers to this account to build it up and make it less modest.


Ensure that you have income protection

My Dad was a butcher and had his own butcher shop. As a small business owner, he didn’t have an employer paying money into superannuation on his behalf or have income protection insurance. This meant that the profits from the butcher shop was his only income.


When I was 9, my Dad became quite ill and was diagnosed with cancer. As a result, he was unable to work in his butcher shop for a significant period of time. During this time, my parents tried to organise alternative butchers to run the shop. They managed to get a mate to run it for a while, but it didn’t last long. Consequently, my Dad’s income ceased and we became a single-wage family.


Being a single-wage family is difficult enough in itself. Add a severe illness such as cancer, and all the associated medical costs, to the mix, and you have a recipe for financial disaster.


Consequently, as an adult in control of my own finances, income protection through insurance or substantial cash reserves is critical in my opinion.


As I only commenced my Financial Independence journey just over a year ago, I don’t have substantial cash reserves as yet. So, I have income protection insurance, as well as death and permanent disability insurance.


I currently have insurance for 75% of my income. This means that if I were to become ill and unable to work for a substantial period of time, I would receive 75% of my income each fortnight + my superannuation contributions from my employer.


If you don’t have substantial savings, it might be worth looking into your insurance options to see if income protection insurance is affordable for you. Some superannuation providers offer income protection, death and permanent disability insurance policies which can be paid directly from your superannuation account.   So, if you don’t think you can afford these insurances from your net income, this may be an option worth exploring more.


If you own your own business, then building a substantial cash emergency fund may be more suitable. The only problem with this is having the discipline and ability to build it before an emergency strikes. So, if this is the route you choose, throw everything you can at it, as quickly as you can.


Debts won’t go away if you bury your head in the sand

One of the most prominent lessons I’ve learned from my own childhood is that no matter how hard you try, a debt won’t just up and pay itself, nor will the person(s) the debt is owed to just decide to pardon you should you just bury your head in the sand and pretend like you don’t need to pay for whatever it is you’ve gone into debt for.


… Instead your debt will go to debt collectors. Should you choose not to pay it, it will accrue interest and become larger. Should you choose not to pay that, the sheriff will be regularly knocking upon your door to try and serve you a subpoena. And, should you choose try to avoid them, they will track you down and you will end up in court, and then you’ll end up having to pay for your debt, plus interest, plus court costs.


To avoid this, follow this simple rule: Don’t buy shit you don’t have the money, or intention, to pay for!


Learn from the tightest person in your family… They’re no doubt the richest

One of the observations I made growing up was that my Grandma was tight with money. And, I mean, really tight.


She lived on a farm quite a distance from her nearest town and didn’t go to town very often. So, when we would go visit her, she would phone ahead to give us a shopping list. We would then pick up her groceries for her on our way to her house.


When we got to her house, she would go through the receipt and then pay mum to the cent. Now most people would round up to the nearest dollar, or nearest $10, as a tip. But, not my Grandma.


In doing things this way, she never owed anyone a cent, but never gave away a cent either.


This level of cheapness doesn’t sit comfortably with me. But, the woman knew what she was doing and did not die a poor lady…


So, rather than dismissing the tightest person in your family as a cheap ass-hole, take the time to study them. Then figure out if there’s anything you learn from them and implement to get your personal finances in better shape.


Collective goals are imperative

When it comes to money, being on the same page as your partner is super important. In a partnership or family, the simple fact is that there’s no such thing as “your money and my money”.


If you’re not on the same page financially with your partner and one of you just goes about living their own life, spending money on whatever they want, whenever they want without proper consultation or thought about your family unit, this is going to cause arguments and unnecessary stress and strain on your relationship/family.


Consequently, talking about money with your partner in a positive, productive way is hugely important. In doing so, you can work out what your short, medium and long term goals are. From here, you can figure out what you want to work towards and then set about achieving those goals together. 


If the idea of all your money being “ours” rather than “mine” gives you a rash, then perhaps think of ways you can do a bit of both. My beloved and I have an allocated spending account each. 10% of our income goes into each of these accounts, which we can spend on whatever we want. This still allows us to have collective goals for 90% of our income, but ensures we still maintain our independence.



We are all a product of our childhoods… And, I am certainly no exception to this rule.


From my childhood, I have learned a lot about money; from both positive and negative experiences.


I now appreciate all of these experiences as I know they’ve contributed to our current healthy relationship with money… And, for that, I am grateful to both of my parents.


Cheers, TFC.

Posted in Money Reflection and tagged , , , , .

The Flawed Consumer is a Gen Y consumer that is on a mission to achieve wealth simply by changing spending and lifestyle habits.


  1. Thanks for the article. I am new to the country and I have been meaning to look into income protection and disability insurance through super. Your article has been a timely reminder for me to follow up.

    Our finances will never be ok if we ignore it and continue working hard like a good employee. It is imperative that we need to budget, plan and really spend some time to ask ourselves what we want and what the future should be,

    • Agreed Arun! It’s one of those things we tend not to think about until it’s too late. But, future proofing is so incredibly important.

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