How Your Parents Screw Up Your Money Beliefs (And How To Reform Them)

Personal finance influencers always complain that we are not taught how to manage money in schools.

That’s true. Schools teach a fixed curriculum; they don’t teach you skills.

Because schools don’t teach us money habits, we go through life not knowing that our money beliefs are an area we could do better in.

Many of us don’t know what healthy money beliefs look like.

So when we see someone’s “bombastic displays” of their wealth, we immediately curl up into ourselves. Jealousy may also be born here.

And because we are so unaware of our money beliefs, we never care to work on them.

Well, my kind therapists supported me as I worked hard to uncover why money management was difficult and alien to me.

This article distills some practical wisdom about personal money management that I learned in therapy as I worked to peel away my toxic money beliefs.

Without further ado, let’s jump right into it.

How parents coach the scarcity mindset into us

Earlier, I used to be scared of spending even 1 rupee on needs and wants. That was because I grew up in a household where I was taught the value of money. Or so I thought.

Really the only thing my parents taught me about money is that money is a scarce resource and that we were always running low on money.

If I wanted to buy or acquire something, I was met with an “oh my god! That’s so expensive” reaction from my parents.

Sometimes, they told me a different less expensive way of achieving the results which I didn’t like at all. Or they completely denied the expense and said “you don’t need it”.

The only way to enjoy life was to buy things and the only way to buy things was to earn my own money and use it to buy whatever I want. I became financially independent. I knew the value of earning my own money — my parents wouldn’t buy me things that I wanted so I had to earn my own money and use it my way.

But I was not culturally independent. I was only taught it’s important to earn your own money, but I was not taught how to manage my money in an efficient way to enjoy my life.

The reasons my parents gave to deny my needs and wants had a lot of variety.

So, I always thought we never had enough money for even basic wants. That’s how the “scarcity mindset” took hold in me.

Culturally speaking, I was still following my parents’ script of handling money which included beliefs like: “Money is a very scarce resource”, You don’t deserve to spend on your wants and luxuries”, and so on.

The result?

Money became less like a resource and more like a secret forbidden treasure that was meant to be conserved for an emergency. I could never spend it even if, in reality, we earned quite well to comfortably support our family of 4.

How a scarcity mindset with money affects you

You cannot spend on your wants because your parents taught you that wants are not important to spend money on and that you don’t deserve luxury.

So when you do plan to spend your money that’s not an immediate psychological need, your mind starts to reason with you: “Oh you don’t really need it” or “you can do with something cheaper” or “maybe you can buy this next month”.

And then you keep postponing that expense until you forget about it or the want becomes an urgent need that you absolutely cannot avoid.

How I began shedding my scarcity mindset with money

Thankfully, these days I live alone. Both my parents rest in heaven (I certainly hope so 😜). And thanks to my wonderful therapists in about 5 years of therapy, I have shed a lot of fear and anxiety generally in life. That means my fear and anxiety around money are also getting resolved to some extent.

As I am uncovering these harmful money beliefs, I am also earning comfortably. And there’s also a little bit saved in the bank as my emergency fund. I have no reason to call myself poor anymore.

As a result of these wonderful coincidences, I feel psychologically safe with my money. I can see now, that my toxic money beliefs were passed down to me by my parents. I imagine that must be the case with a lot of Indian — or indeed Asian — families.

What it means to shed your scarcity mindset with money

My beliefs around money have now evolved.

So here are a few things that I have realized about money in the past few months:

• Money is a finite resource. You can have a lot of it or you can have it little. But you can never take money for granted and assume your money will never run out.
• Attach a broader meaning to your purchases that’s more than the money you spend on these purchases. So, for example, if I am spending money on an expensive new mattress, it’s not just an expense. I am doing it because I want to get good sleep. Spending a lot of my money on just a mattress is worth it because I have had years of my life ruined coz of sleeping on a bad mattress. I value my sleep and decent uninterrupted sleep is crucial to keep my health and well-being balanced. If I understand the meaning behind the expense, the expenditure starts to make a lot more sense.
• If you are making a big purchase, ensure that the returns you get with the object you buy are worth it. Also, ensure that you can maintain the object you buy with that money in a good operable condition. That way you are getting your money’s worth FOR A LONG TIME and you feel good about making a big purchase. That way you can say to yourself “Yes, I spent a lot of money on these things, but look at HOW MUCH I got out of it too!”

This article was written by Navin Israni. If you like what you read and want to read more such practical life advice, tap that “Follow” button here on Medium. If you want to work with Navin, get in touch with Navin on LinkedIn.