Editor’s Note: This is a guest post from Jeff Rose.



I work as a financial planner, a money blogger, and a personal finance writer.

But by all rights, I should not have the career and financial stability that I do.

That’s because my parents were bad role models when it came to teaching me how to handle money. Not only did my mother and father each ruin their financial lives through filing bankruptcy (twice in my father’s case), but my mother also lost her shirt investing in Las Vegas real estate right before the housing collapse. To top it off, neither of my parents saved anything for retirement. For quite some time, I followed their examples without realizing how damaging it could be.

So how did I overcome the negative financial lessons I grew up with?

I can tell you it wasn’t easy. Your parents are your first and most influential teachers, and many of the lessons they impart are subconsciously taught and learned. It can be very difficult to reverse those lessons once you reach adulthood — but it can be done.

My struggles to overcome my parents’ negative financial lessons have shown me that there are several important steps to becoming financially stable after a tough financial childhood:

1. Change Your Thinking

“Debt is just a part of life.”

“The tax refund just came in. Let’s go on a cruise!”

“It’s impossible to ever get ahead.”

Have you ever heard any of these statements from your parents — or from your own mouth?

These are the sorts of thoughts that many individuals who grew up in less-than-ideal financial situations may be clinging to, because it is what they learned at Mom and Dad’s knee. And the fact of the matter is, it can be extremely difficult to even recognize that your thought patterns and habits are in any way unhealthy (or unwealthy).

So how do you break free of the poor mindset? How do you change your thinking?

It starts with observation. You may remember the first time you went to a friend’s house as a kid and realized that their family was really different from yours. This realization may have been as inconsequential as noticing that your friend’s family put ketchup on everything from scrambled eggs to roasted turkey, or as life-altering as realizing that some people really do have money set aside to handle life’s emergencies.

Observing that your friends have different rules and habits and expectations than you do is disconcerting when you’re a child. It makes you question what you think of as normal.

Unfortunately, for many people, adulthood doesn’t change that disconcerting feeling. Instead of learning from friends’ different habits, you might instead fall back on resentment or excuses. You might assume that their financial lives are different or better because they have more than you do, and so you can’t possibly emulate what they do.

Instead of living on assumptions you made in childhood about what is possible and impossible, let yourself question your own habits and mindsets. It’s uncomfortable, which is why it can be so difficult to do, but it’s ultimately freeing. By questioning the basic mindset you have about money, you’ll be in a position to restart your own financial education, using positive role models this time around. Which leads to…

2. Find a Mentor

Changing your thought patterns is an important start to overcoming money struggles. However, the learning curve when it comes to finances can be awfully steep, and realizing just how little you know when you are working to change your thinking can be enough to overwhelm you. How do you know where to start in getting your financial house in order? How do you decide between competing financial goals?

This is where finding a good mentor comes in. You might find that joining a site like or Enemy of Debt, or reading a book by a respected financial expert such as Dave Ramsey or Liz Weston can be a great start in finding the right path to financial stability.

From there, it’s a good idea to seek out more of a personal relationship with mentors who can help you make the decisions that will improve your life. One way you can do this is to start seeing a financial planner — something that I (of course) personally recommend. However, it’s also possible to simply seek out the expertise of individuals who know about the aspect of finance that you need help with.

Money is often a taboo subject in polite conversation, but often we’ll throw the baby out with the bathwater in trying to mind our manners. Professionals generally love to talk about their field of expertise, and asking questions of loan officers, insurance adjustors, financial planners, and entrepreneurs is a great way to learn — and make your new acquaintance feel gratified at your interest. Liam has the right idea in taking on mentors wherever he can find them.

3. Plan Ahead

When you get right down to it, most poor financial decisions are reactive, rather than proactive. That’s the case whether your bad role models were chasing stock market gains or investment schemes (because they’re reacting to a sense that they must act now), or they were scrounging money because they were unable to set any aside for the 12-year-old family car’s inevitable breakdown. In either case, the reactive response means that money will be wasted and stress levels will go up.

An acquaintance of mine grew up with two financially reactive parents. When things hit the rails, his mother would pull out the credit cards to pay for the emergency, while his father would decide the “answer” was to take whatever money he could get his hands on and invest it in tin mines in Bolivia or other get-rich-quick schemes. Needless to say, between the debt and the waste of money on impossible investments, my friend grew up in a much more financially strained environment than he had to.

That kind of situation is the exact reason why every finance expert, financial planner, personal finance website, and your wealthy Uncle Bob all tell you to have a healthy emergency fund. Planning for life’s inevitable emergencies allows you to take them in stride, rather than react in panic mode.

But planning ahead does more than just shield you from the sorts of bad decisions my friend’s parents made. It also allows you to have the life you dream of, rather than feeling like your life is about constantly putting out fires. You can plan for your vacations and treats — not to mention your retirement — instead of simply allowing things to happen to you. You can take the time to really think about what to do with a windfall, instead of just reacting to the pleasure of suddenly having money. You will be in control of your money, instead of vice versa.

Unfortunately, the tough part about planning ahead is finding money to put aside for the future. If you’ve grown up with a mindset of scarcity, you may feel as though your every dollar is accounted for, and that any extra cash you have needs to be spent right away or else it will “disappear.” If you’ve grown up with parents who taught you to live beyond your means, it can be next to impossible to turn off the spending habit, since you feel as though you deserve all the material things you want.

The trick is to start small and automate. Even if all you can budget for is $20 per paycheck to go into your emergency fund or your investments, that’s better than nothing. Automate that bad boy, so the money comes out of your check without you having to do anything, and it’s less likely that you’ll feel it. Up the savings by a little bit once you’re used to your reduced take-home amount. Soon, you’ll be in a position where you are ready to face a life emergency or plan for something special, without having to whip out the plastic to pay for it.

4. Get Over Yourself

Parents love their children and are proud of their every accomplishment. That is absolutely as it should be — but sometimes it’s carried a little too far. For instance, the mother of a friend was horrified that the first post-college job interview my friend landed was for a cashier job with Target.

Yes, my friend had just received a Bachelor’s degree from a prestigious school. But the economy had dried up, and there were next to no openings in her field. Rather than simply do nothing, she decided to take whatever position she could find in order to keep money coming in. She knew her student loans weren’t going to pay themselves.

Something that many parents have inadvertently taught their children is that they deserve some specific role in life, some specific job, or some specific standard of living. But just because you or your parents feel you “deserve” nothing less than the best does not make it true.

It’s a far better attitude to recognize that you have to do your part to make your way in the world. The world will not hand you things just because you have a great degree, a brilliant mind, or proud parents.

Understanding that there is no job that is “beneath” you and that there is nobility in any kind of work that you do to support yourself (and your family) will go a long way to not only making sure you stay afloat, but also help you feel content with your life. By accepting that sometimes you might have to man a cash register, wait tables, or dig ditches, you keep your life entirely within your own control.

Refusing to accept anything less than the specific job you trained for (or the one you feel you deserve) means that you are stuck waiting for the world to provide for you. That’s a recipe for frustration and financial ruin.

Eliminating this sense of entitlement is just as important for the other side of the financial equation: spending. You may feel as though you deserve the 4,000-square-foot house and a luxury car — but true contentment comes from living within your means and recognizing the difference between wants and needs.

5. Learn to Say No

Of all the lessons we pick up from our parents, one of the hardest to come to terms with is the lesson on what family owes each other.

For many families, pulling together in tough times is an important part of the family dynamic. And while there is nothing wrong with that when everyone in the family is actually pitching in, the lesson is often more about bailing out a family member who seems bent on self-destruction. If you see your parents pay for your aunt’s rehab over and over again, you grow up thinking that your family is your responsibility — no matter how much they may screw up.

But that sense of responsibility can end up ruining your finances, too.

I experienced this first-hand when my mother decided to invest in real estate in Las Vegas back in 2004. Her credit wasn’t stellar, so she asked me to co-sign the loan with her. Telling her no was one of the hardest things I’ve ever had to do. She felt like I had a responsibility to help her, and it was very difficult to ignore that sense of responsibility, even though I was trying to build my own life at the time.

But we all know what happened in Las Vegas: the market collapsed and all those real estate investors — my mother included — took a major bath. Had I co-signed the loan as she asked, I would have been right there with her.

One of the worst feelings in the world is the sense that you have disappointed your family. You may feel like you owe your parents (or your children, or your siblings, etc.) because they have been there for you many times. But there is a big difference between emotionally supporting your family, and financially enabling them. Learn that difference, and recognize when you need to say no in order to protect yourself. Your family does not love you only because they think you have money they can borrow. So they won’t stop loving you because you say no.

Remember, your responsibility to your family is to love and honor them, not to bail them out.

Living Your Own Life

We grow up thinking that our parents have all the answers, and it can be a rude shock to realize that they are just as fallible as everyone else. While your parents have done everything they can to prepare you for the world, sometimes they themselves might not have the necessary skills to impart to you.

That’s why it’s so important to educate yourself as an adult. You can keep all the important lessons your parents got right, and relearn those that they faltered on.

They ought to be proud to see you succeed, even if it means your life looks different from theirs.

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Jeff Rose, is a Certified Financial Planner and Iraqi Combat Veteran. He is also the author of the recently released book, Soldier of Finance: Take Charge of Your Money and Invest in Your Future.