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How To Manage Money If Your Parents Never Taught You How

Save, invest, and prepare for your future—all on your own.
PHOTO: istockphoto

Tumultuous relationships with finances almost always start in the family—whether it’s overspending on luxuries, the glaring lack of a family budget, battling gambling addictions, or other behaviors. When you witness unhealthy money habits in your formative years, it can be  difficult for you to find your bearings once you’ve finally left the nest.

I had a financially unstable parent who failed to lead by example. Because they were easily tempted, money passed through their fingers like sand, leaving me and my siblings with very little for basic necessities. As a result, I’m in my near-mid-20s unlearning the bad habits I picked up from them, all in the hopes of having a veritable nest egg for when I truly need it (read: retirement). I don’t claim to be a whiz; this is a personal journey I’m sharing with you all, and the tips below are passed down from experts in the field who have it all figured out. Here’s how to plant two firm feet into your cash flow to keep it from seeping into the wrong places—and how to lead it into corners that will allow for growth and ensure your security.


Practice, however excruciating, the act of “paying yourself first.”

This is a wildly popular term in personal finance: it means to tuck away savings before you spend your money on anything else. The thing is, we don’t learn this as kids because back then, phone bills and groceries weren’t exactly at the top of our priority list. If you had a parent whom you observed spent too much on unnecessary luxuries but began to struggle days before their next paycheck, then transitioning this habit into your daily life may prove challenging. I took this mindset into my adulthood: If there’s money in my wallet, it’s there for me to spend. As a result, even when I moved into jobs with more than enough leeway for savings, I was still hemorrhaging money.

I took this mindset into my adulthood: If there’s money in my wallet, it’s there for me to spend. 

Now, I try to practice this nifty habit. During paydays, the office is usually excited, but I no longer allow myself to get too carried away. Once I receive news that "the eagle has landed," I assess the figure I’ve received and immediately transfer money for savings into a separate account. To avoid confusion, I never use this account for daily expenses. A good tip is to trick yourself into thinking that this money isn’t yours. Technically, you are saving it for someone else: future you, who will thank their lucky stars that past you had some foresight.

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Rid yourself of debt before you can begin savings.

Debt is a heavy load on your back if your primary goal is to prepare for life’s rainy days. Skyrocketing interest rates plus the stress of owing money can deter you from building savings. Why is that? When you have a large debt, the idea of paying it off little by little can be demotivating—it’s going to take me 24 months to pay this off?!—so you decide to wait for when you will receive a large sum of money (e.g. your 13th month pay) and promise yourself you’ll pay it off immediately by then. In the meantime, the paychecks you get go to small luxuries you’ve convinced yourself you deserve. But if that money had just been allocated to paying down your debt, you’d have been debt-free by the time that Christmas bonus came around. When it comes to money, we tend to defy logic to give ourselves an excuse to spend more, so it’s crucial to beat yourself at your own game.


How do we do this? It’ll take a reassessment of everything you spend your money on. To pay down a current debt I owe, I’ve dropped my twice-a-month manicures and expensive coffee habits (fast food coffee is pretty decent!). I’ve scanned my home for expensive but barely-used items and sold them. I’ve used the proceeds from my performance bonuses and over-profit incentives at work as well. I’m going to be debt-free by May 2019, and I couldn’t be prouder—I just had to grit my teeth while I forked over the money to pay off the debt every month. It’s gonna hurt. A lot. But the relief you’ll feel in the end will be priceless.

Decide what you are willing to spend big bucks on and what you’re not.

In the words of Paula Pant, a highly regarded finance blogger, “You can afford anything, but not everything.” Unless your surname is Kardashian-Jenner, you have to accept that there’s only a certain lifestyle you can afford. That doesn’t mean you won’t get to enjoy your money; you just have to channel your cash toward the thing that brings you the most joy.


As an adult, I’ve come to find that I spend the most money on seeing the world. For me, this means cutting back on clothing and beauty products.

My parent, for all their faults, just wanted me to have a great life. That’s why they insisted on getting me the nicest shoes and the fanciest toys. They failed to realize that we simply weren’t in a position to choose luxury in all aspects of our lives. As an adult, I’ve come to find that I spend the most money on seeing the world. For me, this means cutting back on clothing and beauty products. (I’m still failing miserably at not overspending on food, though. Can’t have it all.) Sit down and really think about your favorite thing to spend money on...and go ahead and do that. Then, think about where you’re willing to make budget cuts. This way, your hard-earned money goes to what you love investing in the most.

Forgive yourself if you lose your way once in a while.

This is perhaps the hardest money lesson I’ve had to learn, and one I didn’t need an expert to confirm. I watched my parent sink deeper and deeper into debt because when things got bad, they punished themselves instead of looking for a real way out. They took loans to pay off existing loans, pestered family members (which brewed resentment), and eventually turned to gambling (which worsened the problem a thousandfold). Bad money habits are habits after all; they’re gonna take more than a few failed attempts to completely unlearn.


When you’re a day late on paying a bill, or you missed your savings target for the month, don’t beat yourself up to the point of never trying again. As soon as you can, settle your dues and resolve to be more responsible next time. Over-ordered at a restaurant due to peer pressure from your friends? Go ahead and enjoy your food; it’s already in front of you. The key is to keep just the right amount of guilt: not too little that you’ll let it slide, but not too much that your day-to-day life becomes miserable.

These habits didn’t come to me easily—if I’m being honest, I still struggle with all of them. I learned to incorporate them one by one in the past two years, since I started living on my own. It’s a slow climb, but it’s a climb I have to begin now if I want my 40- or 50-year-old self to be worry-free. And you can do the same, as long as you promise you’ll start today.


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