Blaming Parents for Financial Problems

This post originally appeared back on April 7, 2008.  I wanted to run it again today to get some additional perspective from new readers, and because frankly, I needed a break to work on a special project. One note of interest, my rant about the government bailing us out of our financial problems was a good five months before they began doing just that.

A fellow writer recently asked, “Who do you blame for your financial problems?” One of the possible answers was “your parents.” I wonder how many people really blame their parents for their financial problems. I do believe parents play an important role in teaching life skills to their children, particularly when the public education system does such a poor job of preparing students for the real world. However, I don’t subscribe to a line of thinking that parents are to blame for poor choices made by willing adults. There is plenty of blame to spread around.

Lack of Financial Education in Public Schools

There has long been a serious void in public education when it comes to “real life” studies. And in no subject is this truer than the area of personal finances. We continue to teach kids to pass exams, to recite from memory, and to conform to so-called “advances” in new teaching methods. Despite noble efforts, educators are for the most part equipping our children with the wrong skills. Don’t believe me? When was the last time you used an algebraic expression to balance your checkbook, or calculus to solve your 1040 tax form? There is a place for those skills, however I believe that place is college, where it is required of students to indicate a path of studies that may require the knowledge of these higher levels of math and sciences (such as medicine, engineering, etc.). For the rest of us, a basic introduction to personal finance topics would be helpful to prepare for the perils of the adult financial world. Upon graduation, and many times before, students will be exposed to credit cards, predatory lenders, car salesman and if they work part time jobs, Uncle Sam’s maze of tax laws. We should push for an educational curriculum that teaches youth how to be responsible citizens, with their money and beyond.

Poor Role Models in the Media

The media is full of poor financial role models. Soap opera stars who live lives of luxury, but never seem to work for it. Entertainers and sports celebrities who earn ridiculous amounts of money and lead lavish lifestyles none of us could ever afford. Trust fund babies who spend entire decades partying and living it up while waiting for their inheritance. Unfortunately, these are the role models kids are attracted to. In their eyes Warren Buffet, Bill Gates and Dave Ramsey are just “some old guys they saw on the news.” As a society, we worship these celebrities and further highlight their irresponsible behavior by portraying their lives as something we should all aspire to – something that is within reach of the average person. Young people chase this ideal by buying cars, clothes, homes, jewelry and other elaborate goodies they see their idols purchasing. Pretty soon they find themselves in a real financial crisis with limited means to undo their mistakes.

Accountability Crisis

For the last several years we have had an “accountability crisis” in this country. People refuse to accept responsibility for their own misgivings, and shortcomings. The fault always belongs to someone else. You can easily detect this line of thinking in the responses made by those with “poor” attitudes. Don’t earn enough money? “Poor man just can’t get ahead.” Spending too much money? “Well if the government would bring prices down!” Can’t afford college? “College is only for rich people.” No one ever responds, “I’m broke because I want to be.” Or, “I can’t attend college because I am not willing to work for the money to attend.” Imagine how much better off we would all be if we stopped pointing fingers and took control of our own destiny. If we quit waiting on “the government” to pay for something, or bail us out of everything, or to save us from ourselves.

So maybe your parents weren’t the best example, and you did follow the wrong crowd financially growing up and made a few mistakes. Congratulations. You are human. We have all made mistakes. What separates you from serial failures is that you are willing to learn from those mistakes. You are willing to get smart on personal finance topics by reading magazines, books and blogs. You are willing to work extra to dig out from your own financial hole and change your family tree.  Quit waiting on someone else to save you, or someone else to blame it on. Take responsibility for your financial decisions, and start making better ones to provide a brighter future for yourself, and your loved ones.


  1. Honestly, I don’t think we will ever be able to get back to a place as a society where individuals actively take responsibility for their own actions (or inactions). I feel as though I’m fighting a losing battle by teaching my own family that their are consequences for everything they do and do not do. I hope I’m wrong.

  2. I’ve been thinking about this a lot lately, especially with the whole debate about whether or not people who make more money should pay more taxes or not.

    My conclusion? Financial education will be one of the most important elements of this country in order to get us moving forward past this crisis. People cannot continue to live off their credit cards or payday loans. I’m sure it sounds incredibly naive to think that education can “fix” meager incomes, but I think if financial education becomes pervasive, people will at least realize they’re doing something “stupid” and think twice before doing it.

    “I’m spending 50% of my income on my rent—uh oh, I better do something quick!”

    “My credit card is charging me 22% interest—I better pay that off now.”

    “I’m going into debt like crazy! I better find a job that pays more or cut my spending.”

    Sounds simplistic but I think it would make a world of difference if everyone knew the basics, starting with “I should spend less than I make.”

  3. I’ve said this before and I’ll say it again. Please do not look to education as the answer. Though it can help some people, others just have a profound ability to deny what is in front of them. Just look at those people who declared bankruptcy multiple times. Or those “Lotto” winners that end up in exactly the same place they were before they won. There was a great show on TV with Larry Winget called Big Spender. Even when he sat down with the people he was trying to help and showed them the numbers to their face, some people STILL denied it! He was telling them that they need to live within their means — the horror of it! Unfortunately, for most, it takes a drastic reality check (like losing everything) to get them to start taking responsibility for themselves.

    I am a prime example of what can happen when you apply yourself. Having grown up in a small income household, put myself through college (in an extremely tough curriculum I might add), and basically doubling my income over the last 5 years through job changes and learning needed skills, I have little patience for those who do not take responsibility for their attitude and their actions.

  4. @Writer’s Coin and @Momma: This will sound harsh, and as you know, I’m prone to hitting people right between the eyes with ideas from time to time. What can I say, it’s a gift.

    I think in terms of long-range benefits to our country, this economic implosion of credit markets and near collapse of the banking industry will be positive for a couple reasons, but only if it is allowed to happen naturally.

    People need to feel a little sting from this mess. Those who have been living the “high life” on borrowed money do not deserve to be bailed out by taxpayers. Those of us who have been hustling, living well below our means, etc, don’t deserve to be on the hook for the mismanagement of others, including large banks and mortgage lenders.

    As parents we often refer to allowing our kids to suffer some setbacks without our intervention as “tough love.” Tough, because it is hard on us to watch them suffer, and tough because it is tougher for the kids to bounce back. They will bounce back, and so will we. But, we will not learn our lessons if we aren’t allowed to develop some of this “toughness” during lean times. As long as we continue to be “bailed out” the patterns that put us in that negative situation will never be corrected.

  5. @Momma: I share your concern. As a society we’ve gradually removed personal accountability. This has been going on for thousands of years. Each decision, however well-intentioned, has had the result of insulating adults from the consequences of their actions. Now we’re at the point where people genuinely don’t grasp cause and effect.

    When we (as a society) abandoned the never-ending cycle of tribal revenge such as is still practiced in, say, rural Afghanistan, we put something in its place: a police and legal system. We even made it illegal for a person to “take the law into his or her own hands” by making dueling illegal. Then, to avoid the abuses that came from having a group of fallible humans in a position of authority we invented the rule of law, which limited those authorities and made it possible for a person to commit a crime and get away with it for lack of proof. Punishment, if it comes, when it comes, is sufficiently delayed to not really be associated with the crime. People don’t get punished for things like stealing, they get punished for getting caught.

    We took responsibility for a child’s education away from parents and actually force them to send their children to school. Many parents therefore never teach their children about ethics, finance, reproduction, manners, or cause and effect. It’s supposedly the teacher’s job or the school’s job.

    We made it practical to not save for a rainy day. Employment “insurance” programs make it reasonable for a person to get away with not building cash reserves. In many places it is illegal for hospital emergency departments to refuse to provide service to those who cannot pay. If you have income and good credit, it’s still pathetically easy to take out a home equity loan or a second mortgage. Even a person who has just declared bankruptcy continues to receive credit card offers in the mail. So although a person might end up in debt after an emergency, they never really have to suffer. We therefore no longer fear emergencies.

    Social “insurance” or “security” programs provide stipends for those who cannot work due to old age or disability, so that a person no longer has to rely on personal savings or the love and support of family and friends. Before the advent of these social security problems, it was important to maintain family ties and friendships, because otherwise there would be nobody to help you if things got really bad. Nowadays it’s practical and feasible to alienate our parents, siblings, children, neighbors, and co-workers. We can now be as hurtful and obnoxious to other people as we want to be, because we no longer need other human beings. We just need a Big Brother of a government to dig into their pocketbooks and take money from them to support us if things don’t go well. How we treat the people who support us is irrelevant: they will be forced to support us financially no matter how we treat them, so there’s no reward for being kind and loving, or for even getting to know them. Without this incentive, we are essentially subsidizing discourtesy.

    The great economist and social theorist Walter Williams says it best: “What you subsidize, you get more of.” As a society, we have really good intentions, but in the process of creating a systemic solution to an individual problem, we subsidize an awful lot of things that aren’t in our best collective interests, thereby turning individual problems into systemic ones. Furthermore, since human need expands to consume and then exceed all available resources, the more we create systemic institutions to help people, the greater the demand for systemic help will be. Given that our population, and the potential productivity of that population, is finite (no matter what the “alpha” hedge fund hype artists believe), eventually societies find a point at which systemic solutions are unsustainable. They bite off more than they can chew. This happened to the Meiji dynasty in Japan, the Roman empire in Europe, and possibly the Babylonians as well although evidence is limited.

    The only way we can avoid a similar fate to all those collapsed economies I mentioned earlier is to embrace the doctrine of the individual. As individuals, we can recognize that we need to take a proactive approach to our children’s educations, our own retirement security, and other things. We can accept that we can’t just leave it all up to some vague higher authority to fix our problems, and we can get to work.

    Not every person will accept individual responsibility. Many are incapable of it, and some could but won’t, because they are smart enough to realize that if enough other people do it they get a free ride, and they don’t mind killing the goose that lays the golden egg because they’ve somehow been taught that another one is just around the corner. Yet if we get critical mass (50% 1 should do it), we really can turn this economic situation around and bring in what future generations will call a Golden Age.

    I’m not suggesting that we necessarily take entitlement programs away. We will always have people with a legitimate need for those programs that is *not* self-inflicted. Besides, in a democracy we couldn’t get away with it, and the moochers are the ones with critical mass right now. Instead, I am proposing a revolution in our collective attitude, such that we manipulate the demand for those entitlement programs by seizing control of our own destinies.

  6. Dang Squeaky. That was about the most coherent, sensible comment I think I’ve ever read. You summed our societal problems quite nicely, while stating the solution as well. Well done, very well done.

    More power to the individual…less to the state.

  7. I’ll second the Squeaky for President nomination. But, I suspect she is too smart to put herself through that.

    Parents should be the ones teaching their kids personal finance. They should teach it both formally and through example. It won’t do much good to tell your kids how to balance a checkbook or be carefull with credit if they see you going through money faster than you can make it.

    We did not have a lot of extra money when I was growing up. Did not do without anything important, but luxuries were limited. My parents grew up in the Depression and learned to make do. That stuck with me. Doesn’t mean I didn’t make my share of mistakes though.

    FD made a good point about what people see in the media. It’s important to tell the kids that what is on TV isn’t real life. Point out how many of the ‘stars’ they might admire have very unhappy messed up lives.

    Finally, I agree that we need to get back to personal responsability. Few people can take better care of you than you can. And your actions do have consequenses. If you wait for someone else to make your life better or fix your mistakes, you may be in for a long wait.

  8. I think it is everyones responsibility. We can’t blame the schools, or society unless we accept blame ourselves. We must all work together to teach our children to take reposnsibility for themselves both finacially and personally. It is in learning those lessons that we can start the change.

  9. I about jumped out of my chair when I read your suggestion of putting algebra and calculus off until college. BUT, I wholeheartedly agree that a personal finance course should be required in high school. I have already suggested this several times to our school board, and it is being considered. A 18 yr old kid should see the graph that shows how much money he could have at age 60 if he puts just $1000 a year away in a good index fund. They will also figure out how much it will cost them to pay off four years of a $40K /year college, which may either force them to lower their college expectations, or force the universities to come up with much better financial aid (which some like Princeton and Yale are doing this year).

    But I also think that the media is terrible at promoting exactly the opposite of frugality. It’s so attractive and fun to spend money, whether you have it or not. That’s why I’ve started spending my time with blogs like yours, and starting my own. At least I can feel like there are some kindred spirits out there!

  10. You know, I do sort of agree about the lack of financial education but on the other hand…we just got involved in our school district’s budgeting process and man oh man…they have no money to speak of!!! I think we need to strip our schools down to the bare necessities to deal with the financial short fall and stop thinking we need to have top notch every thing for everyone. Prarie school mentality would be nice – a simple classroom with basic supplies (no need for 200 glue sticks people!!!), a white board, teacher and students. Let’s focus A) on the basics like reading, writing, and math and B) on cultivating creative problem solving. A will keep us knowing what we absolutely need to know and B will allow us to figure everything else out and keep our next generation WAY ahead of the rest of the world.

  11. Thanks…

    I’ve got my hands full at the moment; I’m killing a mortgage.

    Post-mortgage, I may volunteer for a public office if it’s done Athenian style. That means I’d have to do it with no pay, on a part-time basis, and for only one term. This is what is meant by “public service” as opposed to “elected public employment”.

  12. @Gretchen: Amen! What it really boils down to is we are not creating a generation of thinkers, problem solvers. Kids are taught to take tests, recite information and mostly useless facts, but rarely area asked to apply anything.

  13. “I think in terms of long-range benefits to our country, this economic implosion of credit markets and near collapse of the banking industry will be positive for a couple reasons, but only if it is allowed to happen naturally.”

    You are 100% correct, sir. I want to see blood spilling in the streets, and all of the Americans with Super-Mega-Family-Pack-Sized mortgages to be foreclosed from their air-conditioned (or, gas-heated, as it is already November) palaces in the cul-de-sacs, and instead living in tiny, one-room, cardboard shacks in urban slums, and shopping at Aldi and Goodwill!!

  14. I also think it is deeper than teaching finances. It’s about teaching responsibility, and about self-image/self-confidence and being able to say NO to peer pressure (or ads)

    Teaching responsibility may not be possible – I think one learns that from example. That could be at home, but also at school, church, social organizations, sports, culture events, etc.

    Those who are responsible are not usually the ones who are over extended nor in over their heads. Those who are secure in themselves are able to say NO to peer pressure and to ads to own flashy things that one can not afford.

    I think a lot of the ‘purchases’ are to try and artificially build one’s ego up, to make up for something perceived as lacking.

    Ok, so this probably is making no sense at all.

    But if one is responsible and self-sure, one is not usually the one needing a bailing out because they over spent on flash and bling.

    The need for some teaching of finances is urgent. But so is the need for people become responsible savers/spenders.

  15. I really think it only started with my parents, who perhaps didn’t teach me enough. From there it went on to my lack of financial education in school, and finally, and mostly – my own desire to start out life in the same situation as my parents lived at the time – only they had been working for 20 years to get there. I also think advertising played a big part – there is a push in the advertising field to not only make you think you need their product, but to make you think you can afford it. The credit industry is a major player in that message. I’m probably in the first generation to grow up with easy credit everywhere!

    So I guess what I’m saying is that there was a lot of influence in my life to use money in a particular way. Does my ignorance and my lack of self-education mean I can blame them for my poor financial decisions? Absolutely not! I’m responsible for myself, and I’m the one that got myself into the mess I did (and occasionally still do!)

  16. I agree with Marci, too, about people using money to buy self-esteem, although I don’t think that’s the whole issue.

    My parents didn’t teach me to save. They didn’t teach me to delay gratification. They didn’t teach me about the power of compound interest – for or against me. Those are all things I wish I would have known, but I didn’t. I don’t blame them for my folly. 🙂 But I will be sure to teach my sons about those things, as well as media awareness. I don’t think they really had the skills, either, at that time!

  17. Excellent comments. I just wanted everyone to know that it is possible to raise financially savvy kids in our country although it is difficult. We have four kids and the oldest is 22, almost 23. She has been financially independent since she was 19 through hard work and scholarships. Our second who is 21 is getting married and is also financially independent. Our third one at home(17) has worked the past year and a half in addition to school and has saved over $5000 from her job. She knows the value of a dollar and is very careful with her money. I am a bit worried about our last child but I have high hopes. He tends to be a bit more of a spender. I believe so much of it is what we ourselves model but there is definitely a huge peer component. My kids always come home after the Christmas holidays from school and share the gifts their friends received with a mixture of horror and envy (new laptops, ipods, iphones, etc.) We have never focused as much on the material side of the holidays. Anyway, it is possible but requires an up-front commitment from parents and I am sure a bit of good fortune. We have always lived on less than we earned and we give at least 10% and have saved up to 20% at most times during our life. My parents did not really talk about finances much although they did help me take out my first loan to purchase a used car. I think this financial mess we are in now is the result of many years of irresponsible financial practices and I know it is going to be really difficult for a lot of people. I know we can make it through though if people are willing to step up and work together to address our problems individually and as a nation.

  18. Both my parents were spendthrifts.

    Which was a problem when mom became terminally ill, as there fewer resources than could have been.

    We still need other people, especially during an extended illness.

    And impacts are widespread – I left a Fortune 500 career to care for mom for several years of her illness.

  19. I truly believe that the government ignore personal finance in its educational program for too long. This should be included in high school programs.

    How would you think that parents who did not receive such education can show something to their kids in regards to personal finance? Most people have no clue of how the stock market works or how much they pay in interest on their credit cards when they make the minimum payment.

    These things should be learned in school.

  20. I agree with the basic premise of your article. One can only blame the parents for so long, right? But let me ask you this. Does having to hear that you’ll never amount to anything, that you’ll never have a pot to piss in, that you’re useless, dumb and stupid … does that sound like a sound path to financial prosperity and saving? I didn’t think so. People don’t necessarily blame others because they’re too lazy to think any different. Sometimes these “willing adults” do it because they were NEVER taught any other way. They’ve spent years of their working lives and thousands of dollars of the money they earned on trying to find that happiness that eluded them for so long. They think that spending their hard earned money will alleviate the mental anguish that was always an intrinsic part of their lives. So, they’ve arrived later at the party than most for that very reason. Better late than never. Luckily, some people DO wake up and turn 180 degrees. I know because I am trying to be one of them. Others take even longer than I did. Some people never recover from an abusive childhood and die in the gutter. There are many reasons why people mismanage money – I just described one of them. Sometimes it’s not even about blame – it’s about indoctrinated thinking instilled at a young age and … guess who gets the blame for that?

  21. Both of my parents are very frugal, as are all of my brothers and sisters. For some reason, I didn’t wake up to the wisdom of that system until fairly recently. So, at whom do I point the finger? Only myself!

  22. I grew up watching my mom get no where in a debt cycle. I said I would never do the same thing. I saved money, shopped and spent wisely. I worked 60-80 hour weeks when I needed to. Then, I took a lower paying job for educational opportunities, but forgot to lower my lifestyle. Eventually I hit a really tough spot and started charging. I did that because it is what had been modeled for me by my mom, and I didn’t know what else to do. I rationalized my behavior by saying I’d take care of it quickly when I was done with school. I didn’t think about how long that would take at the rate I was racking it up. Anyway, of course, I was an adult and made the decision, so I cannot and do not blame my mom for my financial difficulties. The blame rests with me as does the ability to get out of this mess. However, as a parent myself, I have to recognize that what I model to my child may matter in adult life. Since so many schools don’t address the issue and kids aren’t likely to educate themselves, even well-intentioned young adults can fall back on what they know is wrong because they don’t know any other way.

    Oh, and to fix the probs with kids not being problem solvers, you really have to take on testing which is big, big business. Millions of dollars every year to determine what the kids can regurgitate.

  23. I agree with you about this topic. I think there should be less taught on algebra, a subject I have never used in my professional life. And more on Finances, this world would be a lot better off if we at least had a basic financial education. Some of the current financial crisis could have been avoided with a little education. Great blog and keep up the good work and inspiration to young budding bloggers such as myself.

  24. Lets go hypethetical for a moment. Shall we? If you were walking down the street one day. And you saw a hundred dollar bill laying on the ground. Would you pick it up? If you answered No. Don’t bother reading any more. Because you probably couldn’t anyway. If you answered Yes. Then continue. After you picked it up. You saw a man standing in front of a house.With a sign reading.House for sale $100.00.Would you buy this? ____ For what reason would you buy this house? A=Because it seems like a good deal?
    B=Because you need a house to live in?
    C=Because you plan on selling it to make a proffit?
    Now most people with a lick of common sense know what the correct choice would be. But to a homeless person,a compulsive shopper,or a teenager. You might get a different answer.That’s because we don’t teach common sense anymore.As a matter of fact I don’t think we teach anything anymore.I think were just sent out to school and society to be policed.Whos running this country anyway? Do we the people still govern it? Or what?Is every body comotose.Wake up people.What happened to the Lotto money helping schools?Where is all this extra Tax and revenue going to? I sure don’t see any Change.Oh wait! Yes I do it’s a change for the worst.Just stop and think a minute of all the money our federal governmemt alone takes in each year.Property,Fines,Seizes,Income,ect.How can we possibly be in debt? Now theres a good example.What a role model.Hey Kids pay high prices,loan out lots of money to high risk clients,and bite the hand that feeds you.That’ll work for sure.Duuuuuuuuuuhhhhhhhhh what ya mean Dad. Oh never mind.Just go to School.Ok Dad. Bye Bye Thank for letting me vent. I needed that. DC

  25. some people in their 20s (like me) end up supporting their sick mother and small siblings…because otherwise they would be out on the streets. My mom’s bad financial planning was directly responsible for her not having insurance or a backup plan…I’m not the only person in their 20s whose money goes to keeping a roof over their families head and food in the fridge. Sure, I take care of my finances as best I can considering: but it really is my parents fault that right now I can afford a house or to pay off my student loans significantly. Not for everyone does family end at 18 when you move out. What am I supposed to do, not pay for my brothers asthma medication and watch him die?

    So yes, I can blame my current financial situation on my parents. I am not free of them, i am needed. On the other hand, I am paying off my credit card, and my student loans and supporting my family on an income that many of my peers have trouble living off of.

  26. I am a worker and my salary is to small to carry me and right now my deptors are on my neck and I don’t know what to do because I am totally confused