More About the F Word

Finances=Moving Towards Fabulous

Yesterday I wrote about personal finance and the emotion it evokes.  Last evening a friend and I were chatting about this and we explored further how our childhood affects the way we think about money ( and a lot of other areas).  When we marry we bring those things with us and don’t even realize it.  I’ll explain.

When we are children our parents probably just did what they did without explanation.  This spills over into many areas but for now we will stick to personal finance.

Our parents bought vehicles, groceries and even a home with no explanation of how they did this financially.

Chances are they didn’t sit us down and say, “We are going to get a different vehicle.  I have explored the options and have decided to lease one for 5 years because…” or “At this time we are going to get a new vehicle.  I am selling our car to the kid down the street for the following amount.  I am then going to the dealership and putting that amount plus the blank amount of dollars from the savings account I’ve designated toward the down payment of a brand new car.”

In our home, at least, one day a new car would just be there.  I had no idea of how it was purchased.  I do know I wish I had the 65 Cherry red mustang my dad bought brand new.  It looked like the following (without the dice hanging off the mirror).  It was a SWEET car .

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Eventually of course we are the ones purchasing the car.  Perhaps our parents give us a little advice but, for the most part, we may remain relatively clueless as to the best away to go about such a purchase.

That is an extreme example.

Day to day purchases just happened as well.  We may have seen Mom pull out her checkbook to buy groceries or Dad pull out a $20 to fill up the gas tank (we wish) but we didn’t really understand the process of budgeting or saving.  Maybe we just knew sometimes there were more goodies in the pantry then in months past.

Credit cards may or may not have been used.  I remember my Dad and I talking about this once.  He said our washing machine had broken and they went to Sears, opened a credit account and purchased the washing machine.  He said when he realized how much the credit charges were they paid it off as quickly as possible and cut the card up.

I believe most people of that generation viewed debt and/or credit as a spawn of the devil (figuratively, of course).  They realized that they didn’t NEED the shiny new object, especially if they couldn’t purchase it with (gasp) cash.

Perhaps your parents divided each paycheck into segments using the envelope system.  A designated amount went into separate envelopes.  Some money went into the food envelope. Cash went into the utilities envelope.  Fuel. Hopefully you get the idea.  If there was no more money in the food envelope then there was no more money.  No borrowing from the utilities envelope.  You just ate mac and cheese again.   Chances are, though, that Mom kept a close eye on the amount of money in that food envelope and when she went to the grocery store she knew what she could afford and what she couldn’t.

For the purpose of this illustration let’s just say that the wife grows up in a family where credit is never used to make a purchase. Money is saved in an envelope until there is enough to buy the desired item.  However, let’s say that the husband’s family used credit cards to buy things and paid the finance fees every month.

The way the two families handled money is going to show up because, perhaps the wife wouldn’t even think about buying something unless she had saved the cash.  The hubby is going to think it is “normal” to whip out the plastic.  An impasse is reached and the situation can become heated.  If, however, the couple had discussed this before getting married there would be no surprise when such a situation arises.

Will there still be emotion and strong opinions?  Oh yes.

Will it take multiple “discussions” to come up with a plan?  Yes.

Is this process fun? No.

Is it crucial? Yes.

Is it fun? No.

I am going to be unrelenting about this because, believe it or not, I am learning something here.  I am reviewing things I know.  Maybe I actually will come to like this finance stuff after all. There is certainly a whole lot more to cover.

It’s your turn.

Would you like to add your two cents?  (Sorry.  I couldn’t resist).

 

photo credit: cindy47452 via photopin cc

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