Our web site is all about saving money around the home and how we can do things ourselves. I read an article recently that discussed the reasons that we spend money and it occurred to me that if we were able to manage the urge to spend money better we would probably be able to save more money for some of the things we consider higher priorities in our life.
So I decided to write this post based on some of my own experiences. The basic premise is that your child hood experiences with money often have a huge impact on how you manage money as an adult.
Your childhood spending habits have more impact on your spending habits as an adult than you know. If you were careful with money growing up, then today you are probably the same way as an adult. On the other hand if you spent every cent that you earned or were given as a teenager, then there is a really good chance you are still doing the same or close to it. Old habits are hard to break for many people and this is one that can have significant impacts well into your late adult years. There are lots of other examples we could discuss. Each person needs to examine their own experience as a child growing up to determine what is influencing their spending habits the most.
There are lots of theories about why this phenomenon is true, however the reality is that you are still spending all of your money every pay check. Taking control of your finances and managing your money so that you have funds for some of the things you need or want to do later in life is in your best interest. In the writers situation, we never had a lot of money and to this day I hate to part with a cent and I am very upset if I feel that I am getting ripped off.
You also need to focus on why you do some of the things that you do. For example if buying something new makes you happy, then you need to give some thought about how to control these feelings and the reasons why you spend this money. Not having nice new things as a child might drive you to buy lots of new things as an adult. Having your allowance stolen, might mean you feel you need to spend it before it is gone. These are all child hood experiences that sometimes carry through into our adult years and we need to understand them and get control of them.
We did the usual thing with our kids. This included giving them an allowance and we gave them pretty much everything they needed or wanted. We did not give them a TV set in their bedrooms or a cell phone or a car when they were teens. We wanted them to make these purchases themselves and in doing so set their own priorities. They tend to make different decisions when they have to balance their own decisions about how they are spending their money vs. their parents.
We also taught them about saving and how their money could increase through generating income. We bought shares in their names for them and for every birthday and Christmas we would add more shares. I also talked to them about the 10% rule of saving 10% of their income. As a result they added to the purchase of shares and now they both have a nice little nest egg and the 10% rule continues to be followed for them.
There us another habit from my child hood that continues to this day and a reason why I am making posts to this web site. My family always would try to repair something that broke first before throwing it out and purchasing a new item. In fact it became a challenge to see if an item could be repaired instead of throwing it out. Of course you always need to evaluate whether it costs more to repair vs. buy new!
There is the question of Need vs. Want. We all think we need things. However most people when they really looked at something they are considering purchasing, might have to admit it is something they want vs. need. If it is something you want, then there is a decision to be made. Can you do without that item? Or can you delay spending the money on that item? If you answer the question honestly, you may be able to save yourself a great deal of money.
Let us know your thoughts and comments by leaving comments on this post. Additional ideas are also welcome as well if they will help our readers get control of their finances and savings.