Why is it so difficult to teach people to manage money?

[sydboy007]

http://www.thereformedbroker.com/2014/07/07/systematic-suckers/

I think this flows into the issues with savings in the sense of human mental frailty. I'd not be surprised if the same inflows and outflows of funds occurs in Australia.

 

[Tyler Durden]

People tend to follow the example set by parents/family - and that's not always the best.

Haven't watched the video yet, and I think the question involves a wide ambit for answers, but for now I just wanted to say in relation to DocK's point above, that I grew up around my mother mostly and she was a pretty bad example for prudential financial practices.

My mother's a housewife, having never worked ever since she got married, she spent most of her time shopping and buying things. She buys things she doesn't need, and makes impulse purchases, then the items just stay at home and she hoards them away, totally unwilling to sell them.

I specifically remember one time when I was young, my parents were talking about buying something significant, and my mom said "just put it on the credit card and pay it back slowly". I remember thinking at the time of hearing that "yeah, let's just buy things on credit and take time to pay it back, no rush". She obviously didn't really appreciate the impact of interest.

The other thing is, she thinks something is valuable if the price tag says it is. For instance, she might see a handbag with a tag of $1500, and I'd say "what's so good about it?" and she'd give the circular reasoning response of "it's $1500". So I had to tear myself away from that line of thinking as well.

I think I was lucky to get a decent education, otherwise I probably would still be thinking along the lines of my mother's reasoning.

 

[tech/a]

Your Mothers not as silly as you think!!

 

[sptrawler]

Haven't watched the video yet, and I think the question involves a wide ambit for answers, but for now I just wanted to say in relation to DocK's point above, that I grew up around my mother mostly and she was a pretty bad example for prudential financial practices.

My mother's a housewife, having never worked ever since she got married, she spent most of her time shopping and buying things. She buys things she doesn't need, and makes impulse purchases, then the items just stay at home and she hoards them away, totally unwilling to sell them.

I specifically remember one time when I was young, my parents were talking about buying something significant, and my mom said "just put it on the credit card and pay it back slowly". I remember thinking at the time of hearing that "yeah, let's just buy things on credit and take time to pay it back, no rush". She obviously didn't really appreciate the impact of interest.

The other thing is, she thinks something is valuable if the price tag says it is. For instance, she might see a handbag with a tag of $1500, and I'd say "what's so good about it?" and she'd give the circular reasoning response of "it's $1500". So I had to tear myself away from that line of thinking as well.

I think I was lucky to get a decent education, otherwise I probably would still be thinking along the lines of my mother's reasoning.

I doubt you were 'lucky' Tyler, it's like knowing right from wrong, it's called accepting responsibility and being accountable for your decisions.

Sounds like your dad, didn't make your mum responsible or accountable for her spending.lol
I don't mean telling her off, but asking why was that bought.
It brings on an arguement, but then at least common ground can be found and joint commitments made.
It is too easy just to say 'stuff it', rather than have an arguement, then both parties are equally responsible for the outcome.
If it was easy to become financially secure, everyone would be financially secure.
Some are unfortunate and end up poor, because of reasons outside their control, most end up where their decissions have left them.

Hope I wasn't being personal, just throwing my thoughts in, didn't mean to offend, appologies if I did.

 

[Tyler Durden]

No offence taken at all sp.

I suppose it is a cultural thing, but I have grown up in a Western culture, and I question her purchases, which can at times lead to fights. I think the way she sees it is, she is caring for us and the house when she buys something, so she can't understand why I don't like it. It's a bit like a cat bringing in a dead rat for the owner as a 'present' and the owner then shoo's the cat out of the house.

Another story is, many years ago my mom won a fridge, but at that time we already had a fridge we were using. So this brand new fridge is sitting at home, not being used. I've tried to get her to sell it, and tried to explain that if she sold it for $500 and put it in a bank, then she would have like $550 by now or whatever. However, she just dismisses it as "pffff, it's only a few percent interest, what good is that".

 

[tech/a]

No offence taken at all sp.

I suppose it is a cultural thing, but I have grown up in a Western culture, and I question her purchases, which can at times lead to fights. I think the way she sees it is, she is caring for us and the house when she buys something, so she can't understand why I don't like it. It's a bit like a cat bringing in a dead rat for the owner as a 'present' and the owner then shoo's the cat out of the house.

Another story is, many years ago my mom won a fridge, but at that time we already had a fridge we were using. So this brand new fridge is sitting at home, not being used. I've tried to get her to sell it, and tried to explain that if she sold it for $500 and put it in a bank, then she would have like $550 by now or whatever. However, she just dismisses it as "pffff, it's only a few percent interest, what good is that".

Tyler
Seriously I like your mum
She doesn't sweat the small stuff.
I'll bet there were things she did sweat and
They were important to HER.

You know I find the little picture people just can't see the BIG picture.

 

[sptrawler]

No offence taken at all sp.

I suppose it is a cultural thing, but I have grown up in a Western culture, and I question her purchases, which can at times lead to fights. I think the way she sees it is, she is caring for us and the house when she buys something, so she can't understand why I don't like it. It's a bit like a cat bringing in a dead rat for the owner as a 'present' and the owner then shoo's the cat out of the house.

Another story is, many years ago my mom won a fridge, but at that time we already had a fridge we were using. So this brand new fridge is sitting at home, not being used. I've tried to get her to sell it, and tried to explain that if she sold it for $500 and put it in a bank, then she would have like $550 by now or whatever. However, she just dismisses it as "pffff, it's only a few percent interest, what good is that".

Yep, I grew up in a family where dad went to work and pi$$ed it up on friday. Mum had four kids at home and struggled to make ends meet, so she thought WTF and spent whatever was left.
The result was all hell broke lose when the ends didn't meet. It wasn't pretty.lol

I thought, I'm f####d if I'm going to live the rest of my life, like that.

By the way, most new fridges have sh*ty chinese compressors, that last 3 to 5 years.
The fridge she kept is probably running an aussie compressor that last 20 years, don't let her give it away.lol

 

[Julia]

I doubt you were 'lucky' Tyler, it's like knowing right from wrong, it's called accepting responsibility and being accountable for your decisions.

Agree. Good for you, Tyler, in learning from your mother's lacksadaisical attitude. It's not easy to go against a parent's behaviour.
It's obvious you have a thoughtful approach to life. You've probably started more interesting threads on this forum than anyone else. Sounds to me like you're absolutely on the right track.

PS. Totally disagree with Tech/A on this.

 

[tech/a]

PS. Totally disagree with Tech/A on this.

Thats ok Julia

My father once said to me.

"Son---you have no respect for money"

He was right!!!

 

[Julia]

I guess I'm just really surprised at your comment about Tyler's mother, Tech. Over now many years and many of your posts I've had the clear impression that, yes, you take risks, but they're mostly carefully calculated, and the very fact that you've shared with us your recovery from being in a difficult financial position some years ago indicates someone who appreciates how to manage money.

I also find it hard to believe you could run a successful business without good money management.

 

[Vixs]

It depends on your desired lifestyle Julia.

If what you want is still too expensive, you don't have an expenditure problem - you have a revenue problem!

That's what I tell my wife, anyway... She's the saver and the fiscally responsible one...I had to chop up my credit cards and hide money from myself.

Nearly turned the leaf on that one though - not long until the bank will be paying me interest instead of me paying them!

 

[luutzu]

It depends on your desired lifestyle Julia.

If what you want is still too expensive, you don't have an expenditure problem - you have a revenue problem!

That's what I tell my wife, anyway... She's the saver and the fiscally responsible one...I had to chop up my credit cards and hide money from myself.

Nearly turned the leaf on that one though - not long until the bank will be paying me interest instead of me paying them!

Even if the bank is paying you interests, it's still having one over you

 

[luutzu]

Haven't watched the video yet, and I think the question involves a wide ambit for answers, but for now I just wanted to say in relation to DocK's point above, that I grew up around my mother mostly and she was a pretty bad example for prudential financial practices.

My mother's a housewife, having never worked ever since she got married, she spent most of her time shopping and buying things. She buys things she doesn't need, and makes impulse purchases, then the items just stay at home and she hoards them away, totally unwilling to sell them.

I specifically remember one time when I was young, my parents were talking about buying something significant, and my mom said "just put it on the credit card and pay it back slowly". I remember thinking at the time of hearing that "yeah, let's just buy things on credit and take time to pay it back, no rush". She obviously didn't really appreciate the impact of interest.

The other thing is, she thinks something is valuable if the price tag says it is. For instance, she might see a handbag with a tag of $1500, and I'd say "what's so good about it?" and she'd give the circular reasoning response of "it's $1500". So I had to tear myself away from that line of thinking as well.

I think I was lucky to get a decent education, otherwise I probably would still be thinking along the lines of my mother's reasoning.

Be kinder to your parents.

There might be a handful of reasons to disrespect your parents, maybe... them not thinking or behaving to your liking ain't one of them.

I'm a Psychologist so I can say this: your mother's shopping habits could be what they call shopping therapy.

I'm sure you also think you raised your own self up too, put your own self through schools and uni to get that "decent education". But behind every day of your life to at least your first paycheck is your mother's sacrifices and generosity - she could have just send you off to some childcare place or abort you and keep working, not feeding you or buying you things so she could afford more for herself.

I know of mothers who divorced their husband, break the bonds between father and children... all for no other reason than because her new husband has more money. There are mothers who tell their daughters to divorce their husband, send the grandchildren to the guy's parents or wherever and go for the boss with more money than a tradie.

Your education hasn't started yet.

 

[Judd]

+1 we should probably start a thread, phrases that should wave a red flag.

Trust Me

Why?

You can't go wrong

But if anything can, it will.

Yes, I was being a bit tongue in cheek but there are probably elements of truth in some of those bons mots. One of my favs is:

"Oh, but I thought...."

Apparently not, at least not in the way I think.

Was a phrase continually used by a lady I once worked with who, despite having a degree, was absolutely hopeless at any form of calculations to such an extent she could not perform percentages. I had to review every bit of her work and correct those mistakes. Five years of bemusement with a touch of frustration thrown in. Yes, she was very bad with money management as well.

 

[Tyler Durden]

Be kinder to your parents.

There might be a handful of reasons to disrespect your parents, maybe... them not thinking or behaving to your liking ain't one of them.

I'm a Psychologist so I can say this: your mother's shopping habits could be what they call shopping therapy.

I'm sure you also think you raised your own self up too, put your own self through schools and uni to get that "decent education". But behind every day of your life to at least your first paycheck is your mother's sacrifices and generosity - she could have just send you off to some childcare place or abort you and keep working, not feeding you or buying you things so she could afford more for herself.

I know of mothers who divorced their husband, break the bonds between father and children... all for no other reason than because her new husband has more money. There are mothers who tell their daughters to divorce their husband, send the grandchildren to the guy's parents or wherever and go for the boss with more money than a tradie.

Your education hasn't started yet.

Hi luutzu, not disrespecting my mother or father at all. I was just trying to provide an insight into the mentality I had to grow up with when it came to money.

 

[Value Collector]

Hi luutzu, not disrespecting my mother or father at all. I was just trying to provide an insight into the mentality I had to grow up with when it came to money.

I think the views you described are pretty common, you wouldn't be able to tell from my attitude to finance now, but I got a credit card as soon as I started working full time, the first thing i bought was a tattoo and a bottle of bourban,lol I then paid it off with minimum payments

 

[cynic]

Recently my bank was kind enough to inform me that if I only made the minimum monthly payment, the closing balance on my credit card could be fully paid in approximately 113 years and 8 months!

 

[cynic]

...I'm a Psychologist so I can say this: your mother's shopping habits could be what they call shopping therapy.
...

There's a lot to be said for retail therapy, provided it doesn't become an addiction and is kept to an affordable level.

A couple I know, both earning a healthy income, had to sell their house in order to relieve themselves of debt. A sizable portion of this debt was attributable to one person's compulsive shopping habits.

On the subject of psychology, there tend to be a lot of "qualified" people about these days, which leads me to wonder how it is that there are so many people in the world whom don't have the slightest notion of their own agenda and the manner in which it influences their perception, demeanour and resultant behaviours.

Some(not all) psychologists seem to be terribly deficient when it comes to self awareness, which leads me to seriously question their ability to assist and/or guide their clients.

 

[luutzu]

Hi luutzu, not disrespecting my mother or father at all. I was just trying to provide an insight into the mentality I had to grow up with when it came to money.

Sorry, i probably misread what you were saying.

I agree with Julie and trawler that it's good we learn from our parents - imitate the good and try to avoid what we think is wrong. Sometime we could take that too far and disrespect our parents because we know more than they do or think differently.

 

[luutzu]

There's a lot to be said for retail therapy, provided it doesn't become an addiction and is kept to an affordable level.

A couple I know, both earning a healthy income, had to sell their house in order to relieve themselves of debt. A sizable portion of this debt was attributable to one person's compulsive shopping habits.

On the subject of psychology, there tend to be a lot of "qualified" people about these days, which leads me to wonder how it is that there are so many people in the world whom don't have the slightest notion of their own agenda and the manner in which it influences their perception, demeanour and resultant behaviours.

Some(not all) psychologists seem to be terribly deficient when it comes to self awareness, which leads me to seriously question their ability to assist and/or guide their clients.

Yea, from stories I've heard, a lot of addictions - like gambling, shopaholic -ism [?], though yours the first I've heard of a shopaholic... but a lot stem from people trying to do something to temporarily distract their current unhappy/depressive state and it got out of control.

Sometimes we just need a sounding board, a friend to talk our troubles over.. but for different reasons couldn't and so tend to get into things that later prove destructive. That's my analysis anyway

I think a good counsellor/psychologist doesn't guide their clients... they only assist in being a good listener and let the person talk and bring up suppressed feelings and memories, and in the process, the client themselves figure out their own solutions... Most often, after realising the causes of their current state, most people will start to feel better, would start to realise the issues.