Financial Lessons Learned Through Parents

Canadian Dream had a post called “Parents Influence Over Their Kid’s Money.” Part of it reminded me of my own experience:

The other thing my parents did for me that really hit home was during my second year of university they stopped paying the bills. They had decided to buy a cottage instead of funding the remainder of my education. So they co-signed some loans and I was now living off debt to pay my school. I hated it, but it taught me to pay attention to my spending. Needless to say I reduced my spending at school by 10% the next year and I started paying down the debt with every dollar I could after leaving school.

This reminded me of a similar event in my life. My parents had bought some Canada Savings Bonds for me when I was a kid, as a college fund for me so I would not have to worry about paying for university. When I was maybe 12 my parents wanted to buy a cabin at a nearby lake as an investment/rental property. In order to afford the down payment, they cashed in those Canada Savings Bonds. So when I went to university, I was on my own. It turned out I had a scholarship anyways that covered most of my tuition but I had to pay for everything else. My parents bought me a $2000 used car right at the beginning of university and besides that I was on my own for any vacations I wanted to take during my summers, any “toys” I bought, gas, car insurance, textbooks, and everything else. So I worked part-time through most of university so I could pay for everything and have some money left over for long-term savings as well. So my situation was not the same as most as I had no debt. It wasn’t a case of either my parents supporting me or going into debt. It was a case of finishing university with only a little money leftover vs. having a lot more leftover or spending more, and not having to work (had they had not cashed in those bonds to buy a rental property, but instead given them to me). There is no guarantee that they would have given me those bonds. I had a scholarship so I didn’t really need them, but you never know. They had earmarked those bonds for my time in university so it might have gone to me in some way, maybe it would have gone toward an unnecessarily larger car, a more expensive vacation than the cheap ones I did (mostly camping), or toward my other expenses, meaning I would not have had to work. In hindsight I was so glad that after high school I was basically on my own. I worked hard at my part-time job as a grocery store clerk on weekends, tutoring in math, and my job at a local movie theatre and learned that the only way to make money is through hard work. Like “canadian dream” above, “it taught me to pay attention to my spending.” It is best to learn those simple lessons as early as possible.

While I was in high school I was always a little bit annoyed at my parents for cashing in those savings bonds. I had heard about other people having a “college fund” and I was annoyed that I didn’t have one, or rather, at the fact that they cashed them in for a cabin we rented out and never used. But later on I realized that not having a college fund is one of the best things they did for me. Cutting me off from their finances early on was great as it allowed me to become financially independent and to learn how to look after my money. It forced me to make more mistakes early on, mistakes that I learned from. More recently, over the past few years my wife’s parents have mentioned that they want to help pay down my wife’s line of credit leftover from school. We have been refusing their offers of help because we think that paying down this massive debt on our will be a great experience, like preparation for having a mortgage or a car loan (actually this line of credit debt makes me NOT want to ever have a car loan). We have done an excellent job so far at maximizing our RRSPs, while at the same time paying down our debt as much as possible. In order to do that we have had to limit our expenses in some areas, live in a place that is a bit smaller than we would have lived in otherwise, and live without that fat wad of cash that is currently getting sucked away to interest every month. But we’ve already learned a huge lesson, about the burden and cost of debt, and we’ve figured out what our priorities are as far as expenses go.

So, what did you parents, guardians, or other do financially to you that you didn’t like at the time, but that in hindsight, now seems like a blessing?