Shed Your Family's Money Baggage

Six secrets to lessen your financial load.

| December 20th, 2012
Shed Your Family's Money Baggage

Thanksgiving has past and now we're in full holiday swing. And for many of us, that means we’re in for some serious family time.

And mostly, that’s great! It’s a chance to bask in warm fuzzies and re-vamp our gratitude lists (not to mention eat every single bite of pumpkin pie available).

But everything can’t be fuzzies and pie. Sometimes a trip home can be a trippy voyage down memory lane. Especially when it comes to our family’s money baggage.

Believe it or not, whether you grew up just like them—or in reaction to them—the money lessons you first learned at home tend to follow us through life.

And, if your family had a few less-than-healthy financial habits, trust us, you’re not alone.

“We learn from our parents,” explains Jonathan Alpert, psychotherapist and author of “Be Fearless.” “Money is an important part of our upbringing. We model our parents’ behavior and it becomes ingrained in us. It’s difficult to break out of that.”

As much as we want our parents and families to be shining examples of how best to manage money, the truth is that they’re human, and their own approaches can be flawed.

MORE FROM LEARNVEST: Why You’re Not Actually Poor

How do we know? We asked members of the LearnVest community (whose names have been changed, because no one wants to deal with that at Thanksgiving dinner) to share their own families’ toxic money habits. Then we asked Alpert to break down the psychological motivations behind them–as well as what you can do to break free.

Because after all, as Alpert puts it: “You can’t choose your family, but you can choose the way you manage your money.”

Money Toxic Behavior #1: Living in Denial

“My mom would literally let three weeks of mail pile up in the mailbox and drive right by it rather than face the music and open her bills.”
- Marian

What Causes It: “This is classic avoidance,” Alpert says. “It’s the mind’s way of avoiding that which it anticipates will be uncomfortable or anxiety-provoking.” He explains that the problem with this particular coping strategy is that it only provides a very temporary relief, while doing nothing for overall stress and anxiety.

How to Shake It: Get motivated by the outcome rather than the process, says Alpert: “Think how you’ll feel once you clear the bills off the table,” he says.

Another method for tackling this sort of financial denial is automating every money step you can. For example, set up regular retirement contributions and standard bill payments (that is, for the bills that don’t change every month, like rent or mortgage), which will save you on late fees that will surely result when you choose to ignore what’s happening with your money.

Money Toxic Behavior #2: Embracing Debt

“I grew up as a kid without the concept of building wealth–debt was just the norm. It was more of a question of how much did you owe, and how much could you afford to pay off that month. Because of certain circumstances, my family never got ahead of their finances, or understood the idea of using money to help you make money.”
- Susan

What Causes It: “Living paycheck to paycheck and surviving has become the norm over the past few years,” Alpert says. “People are feeling defeated, unable to see the future and stuck in a perpetual cycle of work and paying the bills.”

How to Shake It: Before getting ahead of your finances, you need to start catching up. Start putting as much as you can afford (even if it’s only $10 each week) away to pay off any bad debt like credit cards and car or consumer loans, and start shoring up an emergency fund. When you’re debt free and have a little financial cushion, then it might be time to turn your attention to investing. Think $10 investments aren’t enough? Think again–just ask this woman, who turned $10 stocks into $60,000. It might take some time to get ahead of your money, but the most important thing is that you start right away.

Money Toxic Behavior #3: Throwing Budgeting to the Wind

“My mother has this idea that money just kind of appears. I don’t think I’ve ever heard her use the word ‘budget.’ I would always watch her go crazy over some glass bowl or piece of art, and spend an hour talking about how expensive it was and how she shouldn’t buy it … and would inevitably give in and buy it anyway. So when I got out in the real world, I just ball-parked everything. I was overspending every single month without even realizing it, because no one had ever told me to actually track my income and expenses! “
- Amy

What Causes It: ”A lot of people use buying as a way to provide comfort in the same way that people might overeat–as a way to feel fulfilled,” says Alpert. They buy lavish and luxury items they don’t need to make them feel complete or special.”

How to Shake It: We don’t need to explain that money doesn’t just “appear,” but seeing where all your dough goes is also one of the best ways to avoid mindless spending. By consistently tracking your earnings and expenditures in the free LearnVest Money Center, you’ll get a sense of how much you really have to spend on what.

In fact, in your Financial Inbox, your areas of spending are sorted into Essentials, Priorities and Lifestyle costs (according to our 50/20/30 rule), and you can track your spending trends over time, so you can easily see where you’re on budget—or going over, whether what leads you astray is a glass bowl, new shoes or a dinner out.

MORE FROM LEARNVEST: $25,000 in Debt: How I Paid Off My Credit Cards in Two Years 

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