When I think back to my childhood, I don’t remember my parents ever teaching me any lessons about money. They never sat me down and taught me about compound interest or credit cards or how to invest my money.
I never knew how much my parents made each year until they had to fill out a FAFSA form for financial aid.
My parents actively kept that information from me and my sister because they wanted us to focus on our job – being students. Study hard, get good grades, get into a good college, graduate, and get a good job. We focus on our job, and they would focus on theirs.
But the funny thing about life is that I learned more by what I saw than what my mom explicitly taught me. And the irony of growing up is that I spent my childhood rebelling against my parents only, through behavioral osmosis, to become them when I got older!
Many of the things I learned about money came from seeing what my mom did – and I wanted to share a few money and life lessons I learned over the years.
Save for something specific.
The easiest way to motivate yourself to save money is to save for something specific. Whether it’s a vacation, a gift, or an emergency fund – saving for something makes it a tradeoff when you are about to spend money.
My parents have always been frugal. It would frustrate me because as a kid, I had no concept of frugality. We see something, we like it, and we want it. Our parents tell us no, and then, we get upset. It happened in our family as it’s happened in practically every other family going back to the beginning of time.
As we got older, and my parents started explaining more of their decisions to us, it started to make sense. As immigrants with no family locally and a small social safety net of other first-generation immigrants, we needed savings to protect us.
We didn’t have family nearby to bail us out – our family was thousands of miles away in Taiwan. My parents are the first of their respective families to come to the United States. Saving money was about protecting us as a family, and that made sense.
Once that goal was accomplished, it was about saving up to travel home to Taiwan.
Every four years, we would fly back to Taiwan to see family. The flights were incredibly expensive, and it would cost thousands of dollars for flights alone. My dad would save up his vacation days, my mom worked for the school system and had summers off, and we’d go for four weeks over the miserably hot and humid summers.
These trips were the only times I’d be able to see my grandparents and many of my aunts, uncles, and cousins. These were very special trips for us, and we looked forward to them.
By making saving about trades, it was easier to accept as a kid. “We can’t buy this game, because we have to save up for a trip to see your grandparents in Taiwan” is a better answer than, “We can’t buy this game because we can’t.”
Of course, as a kid, I would rather have the game, but at least I understood there was a reason I couldn’t have it!
There isn’t a culture of negotiation in the United States like there is elsewhere in the world. If you go into Macy’s, the price is the price.
It’s similar in Taiwan: You can’t negotiate in a department store there either, but there are tons of street markets and smaller shops where negotiation is expected. I don’t think much negotiation happens at farmer’s markets here!
My mom treated negotiation as a sport. She wasn’t going to negotiate where it wasn’t expected, like in a restaurant, but she thrived with street vendors at the various night markets in Taipei. Watching her negotiate was like watching a coordinated dance between her and the shopkeeper – it was also fun to see her get excited about it.
I learned all the tricks – everything from offering compliments to the shopkeeper to mentioning blemishes on the merchandise to buying multiple items and being willing to walk away. I was a mere apprentice, but I soaked it up like a sponge.
Here’s a tip I learned that you probably won’t see anywhere else: Many of the vendors sell the same products, so you can do a little market research by having short negotiations with several vendors. You can use this to find out the lowest price possible based on how much profit they’re willing to give up and negotiate accordingly. Oh, and vendors will never get offended – they will always be willing to make the sale no matter what. It’s just business.
The hardest part about negotiation is being comfortable with negotiating. If you find it difficult, find some very low stakes places to practice your negotiation skills, so that it doesn’t matter if you fail. Get used to the dance, and you’ll shine when it’s important.
Framing is important.
Along the lines of negotiating, I realized early on how important it was to properly frame a situation.
We had a weekly ritual where we’d go out to dinner and stop by the local comic book shop. I used to love comic books, and this was one of the highlights of my week. I would get this feeling every time I walked into Fourth World Comics in Port Jefferson. I loved that place. I loved the colors, the smell of the comics, the crinkling sound of the plastic, and the feel of the place.
I’d even get those feelings when I got little announcement mailers they’d send to our house. I ate it up.
As you could imagine, when we went on our month-long trips to Taiwan, I was missing out on four trips to the comic bookstore. The guys at Fourth World Comics were great, though, and I remember one time they offered to hold comic books for me until I returned.
That’s when I learned about framing because when I came back, I asked my parents for enough money to buy four weeks of comic books. They immediately said no. If we had gone every week, they would’ve been fine with spending like $5 a trip. By waiting a month, I was now asking my parents if I could have $20 to spend on comics books. That was an instant no.
It’s a classic case of the anchoring bias – they expected the trip to cost $5 like all the others, and I showed up wanting $20!
It was a sad day, and I could sense the owner felt bad for me. Bad framing, Jim.
My parents never said it out loud, but there was always a sense that our money was pooled. I didn’t get an allowance when I was younger, but if there was something I needed, my parents found a way to get it. If they didn’t agree that I needed it, which happened a lot, then I didn’t get it.
But as a kid, I never had money that was “mine.” Even when I went off to college, my parents made sure I had money for tuition, room and board, and books, but any money I made on a work study or odd job was put into that pool. I had spending money, that wasn’t the issue, it was that what I made wasn’t really mine. It just went into the pool of money that belonged to the family.
This idea of family extended to beyond the immediate family. I saw this with money but also with financial support. My parents were sponsors for many of our relatives that would come to the United States.
For some of my cousins, they would live at our house for months, while they got their footing. This was easier after we went off to college, but the support was always there.
It was less about the money, though that certainly helped, and more about providing that social support system my parents didn’t have when they came to the United States. It’s scary going someplace where you barely speak the language, know no one, and your family is half a world away. Being able to provide that support to the next generation was an important role.
Price vs. Value
The price is what it costs to buy something, and value is what you get from it.
When you don’t have much, you tend to buy what is cheapest. As a kid, you grow out of clothes so quickly that you buy the cheapest stuff for daily wear. As we got older and stopped growing so quickly, my parents started getting us clothes that were higher quality. My mom loved taking us to Marshall’s, where you could get last season’s name brand clothes at a big discount. We would get Ralph Lauren polo shirts for like $15 or $20. (As an aside, we once went into the Ralph Lauren store on Rodeo Drive in Beverly Hills, and the prices blew my mind!)
If you have the means, there are many areas in life where it’s better to pay for quality, even if it costs more. That doesn’t mean you pay the listed price. You still need to comparison shop and negotiate, but looking for the lowest price isn’t always the correct answer.
By buying quality, you are making an investment upfront in something that will pay small dividends over time. Buying a high-quality mattress can be a big shock to the budget, but that’s something you’ll spend thousands of hours in – and you know what they say, you can’t put a price on a good night’s sleep.
I learned a lot more than money lessons from my mom, and I hope you could take some of these and use them in your life.
I have one ask – what lessons did you learn from your mom? We come from different life experiences, and I’d love to read what your mom taught you – we could all use a little more motherly advice in our lives!
Love you, Mom!
Jim Wang is the founder of personal finance blog Wallet Hacks. He uses his engineering background to demystify complicated financial topics to help you achieve your goals. Jim has been featured in The New York Times, The Baltimore Sun, Entrepreneur magazine, and more. He lives in Maryland with his lovely wife and three children.