How my past experiences shaped how I view money

It shouldn’t come as a surprise to you that I am very passionate about money. What you probably didn’t realize is my passion started when I was a kid. Below are some personal stories about how my past experiences have shaped how I view money today.

 

The lack of allowance

Growing up my parents didn’t give my brother and I any weekly or monthly allowance. Instead, they would leave some coins and bills in a known location that my brother and I could take whenever we needed money. Whenever one of us took out money from the “money stache,” we were obliged to tell my parents how much we took out and what the money was used for.

Meanwhile, many of my school friends had a weekly allowance. Occasionally I would feel jealous of them for having spending money because they could buy treats at school. Most of these friends earned an allowance by doing chores at home. When I discovered this I asked my parents why I wasn’t getting a weekly allowance and demanded for an allowance based on number of house chores I did each week.

Each week, I would do chores like washing dishes, vacuuming, and taking out the garbage to earn a small amount of money. The attractiveness of the weekly allowance soon faded away as the money stache disappeared. Somehow the money stache just made more sense. I also later realized that these chores were family contributions/responsibilities rather than a way to earn a weekly allowance.

So we went back to the money stache and I grew up without an allowance. I could recall a few tough lessons that my parents gave me along the way about my spending choices. This was especially true when money was used to buy silly and unnecessary things. My parents would always make a point that I needed to be smart with spending hard-earned money. As a teenager my brother and I would continue to tell my parents whenever we took out money from the stache but they eventually stopped asking for the specifics. They trusted us and ultimately that had made my brother and I realize the importance of taking full responsibility with money.

Speaking of allowances, do we give Baby T1.0 and T2.0 allowance when they are older? Mrs. T and I haven’t quite gotten this figured out yet. As you can expect, I am a bit biased because of how I was raised.

 

Losing money for the first time

When I was 7 or 8 my mom decided that I was old enough go to the nearby grocery store to purchase a few items without her presence. She sent me away with a $500 NTD bill (~$22 CAN nowadays but it was probably worth a lot more 25+ years ago). At the time, I couldn’t believe I was given a $500 bill, the largest bill I had ever held in my hands as a young kid. I was very proud to be deemed responsible enough to hold on to such large sum of money.

I put the bill in the right pants pocket and every few minutes I would put my right hand in the pocket to check that the bill was still there. Never had held a $500 NTD bill by myself before, I was afraid that I would lose it if I didn’t hold onto it tight.

When I got to the grocery store, I grabbed whatever that I needed to buy and went to the cashier. When it was my turn to pay I reached into my right pocket only to find that the bill was not there!

Shocked and stunned I checked again. The bill was not there!

I checked again. Then again. Then again.

The $500 NTD bill was still not there.

My biggest fear had come true. I had lost the $500 NTD bill!

I came home extremely upset having lost such big amount of money.

And that, was my first experience with losing money.

I learned that I needed to be more careful when handling money. Losing money sucks, but I also learned there are more to life than just money. Life goes on whether you have money or not.

 

Realizing the power of compound interest

Growing up, I had a piggy bank where I could put lose coins I found around the house. When I was around 10 years old, my parents helped me open a bank account where I would deposit these lose coins regularly, along with any birthday money and Chinese New Year red envelop money.

Thanks to higher interest rates in the early 90’s, the value of my bank account would grow slightly whenever I went to the bank with my account book to check my account balance.

And that’s when I realized the power of compound interest. As a kid I would calculate how much interest I would gain over a certain period of time and what my account balance would look like if I were to regularly deposit a certain amount of money.

I calculated all this data by hand and my fascination with money, compound interest, and investment was born.

 

Stealth wealth Jedi in training

When I lived in Taiwan I had two very close friends from elementary school. One of them would always have the latest and hottest toys. He had multiple gaming consoles ranging from Super Nintendo, Sega Genesis, and Gameboy. He also had many games to go with these gaming consoles. On top of that, he would have many of the hottest toys at the time. Whenever we hung out, I would get very jealous of him and imagined what it would be like to be him.

The other friend, on the other hand, didn’t have all these fancy toys. Rather than sitting in front of the TV and playing gaming consoles when we hung out, we played games outside and got our hands dirty.

I had always thought friend #1’s family was rich. Given he had all the fancy toys and his parents had nice cars (I think they had a few Mercedes-Benz). They also had multiple TV’s and a number of computers at home. Furthermore, when Dragon Ball manga was popular in the 90’s, this friend of mine would always have the latest volume to read.

On the other hand, I had always thought friend #2’s family was more on the poor side due to the lack of materialistic things they had at home.

As a kid I began to judge and preferred hanging out with friend #1 because he had all the fancy things.

Then one day my dad sat me down and told me that friend #1’s family was struggling financially and friend #2’s family ran an extremely profitable business.

I was shocked and wondered how that was possible.

“Just because you have money it doesn’t mean you need to show off. There is more to life than materialistic things.”

I didn’t realize what that meant until much later when I saw my dad retiring in his early 50’s. How did my dad manage to achieve this despite being the head of a single-income family?

Stealth wealth.

My parents didn’t own multiple cars or change their car often. We grew up with only one car in the family and we drove each car for as long as we could. They regularly purchased second-hand clothes. We didn’t have any fancy gaming consoles or fancy toys. The fanciest toys we had were Lego blocks which my brother and I would play with for hours each day. We didn’t get a computer at home until I was in high school. For summer vacations where we drove across North America, we would set up camps in local RV parks rather than staying at hotels.

Thanks to my frugal upbringing, I understood what stealth wealth meant and the importance of it.

 

Wrapping Up

There no doubt that my past experiences have shaped how I view money. I truly believe that all of these experiences have allowed me to have a positive outlooks about money. Do I want to lose all these experiences and have no past?

Absolutely not.

We are who we are today because of our past. We need to learn from the past and make positive future decisions.

Dear readers, do you have any past experiences that shaped how you view money?

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22 Comments

  • Reply
    Liquid
    April 24, 2017 at 10:31 am

    Meanwhile, on that fateful day, someone was ecstatic when they found $500 NTD bill on the ground lol. You learned an important lesson and made someone else the happiest person in the world for a moment. They say everything happens for a reason. 😉 Congrats to your dad for retiring early. Mine’s a workaholic and likes to keep busy so he’ll probably continue working into his 70s just for fun haha.

    • Reply
      Tawcan
      April 24, 2017 at 1:17 pm

      Hahaha that’s a good way to put it. 🙂

      FI vs. working till 70’s, one isn’t better than the other. It really depends on your personality.

  • Reply
    RN
    April 24, 2017 at 2:47 pm

    I like what you said about stealth wealth. I am careful not to portray myself as wealthy with expensive clothes. Instead, I wear regular clothes. The point as you mentioned, even if we have money, keep it to ourselves and live simply. We don’t want to attract unwanted attention.

    RN

    • Reply
      Tawcan
      April 26, 2017 at 11:47 am

      Avoiding unwanted attention is a great idea. 🙂

  • Reply
    B Moore
    April 24, 2017 at 3:08 pm

    My family lived on a pension when I was growing up. At the end of each month, my dad got his pension cheque in the mail. Dad or mum would then get the bills out that needed to be paid for the month and dad would write down each bill, it’s amount and deduct it from the cheque amount, leaving a balance at the end. All the bills went into envelope and as a kid I was entrusted to take that envelope to the bank. At the bank, the teller cashed the cheque, paid the bills and put the remaining cash in the envelope which I took home. What was in the envelope was all we ever had until next month. So I learned that there was a limit to what we had and therefore what we could spend. Somehow my parents always got to the end of the month with a bit of money still in the envelope. Thank God for a government pension.

    • Reply
      Tawcan
      April 26, 2017 at 11:49 am

      That must have been an interesting upbringing. Sounds like the envelopes have taught you a lot about saving and how to budget your expenses.

  • Reply
    K. McGarrett
    April 24, 2017 at 8:12 pm

    We came to Canada as immigrants when I was 5 years old. I realize now that we were quite poor but at the time I didn’t notice. Kids don’t really care about those things, at least not until they are teenagers. But then you have other things to feel self-conscious about like acne and big ears, etc. It made to feel, as a parent, that love and attention were the most important thing – and reading every day!

    • Reply
      Tawcan
      April 26, 2017 at 11:50 am

      I don’t think as a kid you realize if your family is poor or rich. Kids don’t really care about these things as long as they can spend time with their friends and parents.

  • Reply
    Divnomics
    April 24, 2017 at 10:55 pm

    Interesting to see how much influence past experience has on the view on money. I recognize the bit about stealth wealth (although in a different setting) and how I didn’t understand why we hadn’t any of the ‘fancy’ stuff as much as others. My parents were both working and a decent income, but chose to get out with us to museums and do stuff, and if we wanted to have something like a tv, we had to buy one of our own. Unknowingly I grew up learning how to be frugal.

    • Reply
      Tawcan
      April 26, 2017 at 11:50 am

      Unknowingly learning how to be frugal is the best way to do it IMO. It becomes in your blood and second nature.

  • Reply
    FI3000
    April 25, 2017 at 4:05 am

    I also grew up with very frugal parents. My mom stayed home with the kids, we had no cable, always bought used cars, all food was homemade the only time we’d go to a restaurant was if it was someones birthday (and that was part of the present). Definitely programmed the frugality into me. My only regret is that because my parents were so debt adverse it took me a long time to realize the financial benefits using some leverage to boost investment gains.

    • Reply
      Tawcan
      April 26, 2017 at 11:52 am

      Focusing on being frugal is great but if you don’t know how to invest the savings, then it’s no good in the long run. I think being frugal is a good start but one must learn to how invest properly rather than just putting these savings to GICs and earn pennies.

  • Reply
    Dividend Reaper
    April 25, 2017 at 10:32 am

    I feel like you’re getting at the greatest question of all: how do we teach our kids to handle money better? That being said, I feel like your collection of stories hits the nail on the head. I also had an allowance as a kid. I however never have a money stash. We were relatively poor and didn’t have the means to get much on the table. This caused my brother and I to come up with unique ways to earn more. For me, it meant walking to the grocery store to buy a pint of lemonade mix to sell lemonade to golfers at the nearby course as they reached the halfway point through their play. For my brother, he befriended kids who had well off families and lived vicariously through their parents spoiling him when he was a guest at their houses. Now that we’re older, I am great at handling my money. My brother on the other hand has learned the hard way for many years and is now finally developing a good relationship with cash and getting out of the debt hole that he created. What it really boils down to it seems is teaching that money is finite. Teach that it can be earned or saved but should not be freely given. Thanks for sharing, Tawcan.

    • Reply
      Tawcan
      April 26, 2017 at 11:55 am

      You and your brother are definitely smart in getting the best out of your money situation. Past experiences definitely shape who you are today.

  • Reply
    Amber tree
    April 30, 2017 at 12:06 pm

    And here I thought that giving an allowance to my kids is the right thing to do… Thx for showing an alternative to us.We will have to think this through!

    • Reply
      Tawcan
      May 1, 2017 at 2:30 pm

      It’s a tough one for sure. We haven’t decided on which approach we’ll do yet.

  • Reply
    Mr. Tako
    May 1, 2017 at 9:18 am

    I haven’t decided if I’m going to give my kids an allowance either. I suppose the idea is that it’s supposed to mimic real life, but I never had an allowance either.

    I like to think I turned out OK in the money department despite not having an allowance either! 😉

    One of the things I think it taught me is how precious money is…because I had so little.

    • Reply
      Tawcan
      May 1, 2017 at 2:31 pm

      I don’t know if allowance mimics real life… I certainly don’t get allowance today, do you? 🙂

  • Reply
    Andrew@LivingRichCheaply
    May 1, 2017 at 10:48 am

    Awesome about the bank account…my parents did the same for my sister and I. My mom would ask us how much we wanted to put into the account when we got money from birthdays, Chinese New Year, Christmas, etc…and I would voluntarily put money in it and was excited to see the money grow. Interest rates were definitely a lot higher back then. As for my experience with frugality, I definitely had that ingrained in my mind by my parents and that has shaped my view. Surprisingly, it can shape your view in different ways because I know people who grew up the same way with frugal parents and live the opposite lifestyle because they want to make up for their “deprived” childhood.

    • Reply
      Tawcan
      May 1, 2017 at 2:32 pm

      That’s very true about “deprived” childhood. I didn’t feel that my childhood was deprived, so that’s probably why I turned out still quite frugal. Living in either end of the extremes is no good.

  • Reply
    FullTimeFinance
    May 1, 2017 at 4:56 pm

    The money Stacie concept is interesting. Can you write more about how your parents introduced that concept and how you felt about it?

    • Reply
      Tawcan
      May 2, 2017 at 8:09 pm

      I don’t remember how my parents introduced the idea but as far as I can remember, they have always put some money in a drawer that we are free to take out. I actually really like the concept because the responsibility lied on me and my brother whenever we took out money from the stache.

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