Reflecting on How Your Family Impacts Your Relationship with Money

by | Jul 1, 2024 | Finance

Money is more than just a means to an end; how you use it reflects your values, priorities, and upbringing. From an early age, your family shapes your relationship with money. The structure of your family, your socioeconomic status, financial literacy, and cultural background all mold your financial mindset. You may see clear differences between your relationship with money compared to your peers based on your upbringing, and there may be additional subtle impacts you have not yet considered.

If you’re hoping to shift your relationship with money, you should take time to reflect on your family’s history and beliefs about money because of the major impact on your financial mindset. However, while your background and family members influence your relationship with money, it’s even more important to forge your own relationship with money based on your values, goals, needs, and personal situation. Those may differ from that of your family!

In this blog, we’ll pose some questions and considerations for you to ponder as you reflect on how your family has impacted your relationship with money. Use this as a guide to help you on the journey of understanding what financial habits you may have adopted or rejected as a result of your upbringing, and how you want your financial future to compare to your family’s past.

Reflecting on Your Family Structure

We’ll start this process by exploring how your family structure shaped your relationship with money because the family structure often sets the tone for all sorts of family dynamics.

First, consider the makeup of your family. Think about your nuclear family first: parents and siblings. Consider if you had the typical nuclear family setup or a blended family. If you do have a blended family, reflect on what age you were when your family shifted into that dynamic. Another point to consider is if you live or lived in a multigenerational household, such as having grandparents, parents, and kids all under one roof. Think back to if you can identify any changing attitudes or uses of money because of any shift in your family or household structure.  If you did not experience any changes and had a consistent family structure, ponder on how that constancy may have played a role in how you feel about money.

Image of a family with 11 members of all ages sitting on a couch in a living room, smiling

Now, consider your birth order and any siblings. Ask yourself, how did my position in the birth order (such as oldest, middle, youngest, only child) influence my financial responsibilities and attitudes? You may want to think about the age that you and your siblings were at the time of any new siblings being born. Think of the age gap between siblings. Then, identify if there were differences in how your parents allocated financial resources among siblings. You may reflect on if that affected your perception of fairness and money management. If you have a blended family including half-siblings or step siblings, that may have brought in discrepancies around money that can impact your relationship.

Then, consider your extended family. Do you have aunts, uncles, and cousins? Are you close with them? Does your extended family feel like one large family or a group of smaller tighter-knit nuclear families? Perhaps one side of your extended family is closer than the other. Let that simmer in the back of your mind and we’ll come back to the extended family aspect in upcoming sections. 

Reflecting on Your Family’s Socioeconomic Status 

Next, we’ll consider your family’s socioeconomic status. It significantly shapes your relationship with money, because it impacts not only the financial behaviors you see, but also your perception of opportunity. The American Psychological Association says, “Socioeconomic status (SES) encompasses not only income but also educational attainment, occupational prestige, and subjective perceptions of social status and social class. SES reflects quality-of-life attributes and opportunities afforded to people within society and is a consistent predictor of a vast array of psychological outcomes.” 

Before we dig into reflection, you may find it helpful to have some quantifiable data points to help provide context. The Survey of Consumer Finances has an interactive tool with data from the years 1989-2022 regarding American population-level income, assets, and debt based on different demographic variables, including family structure. Reviewing the different data points can help you assess your family’s financial standing which can help bring some objectivity to the reflection process. 

Chaet showing the median before-tax family income by family structure in the United States from 1989 to 2022

Now, it’s time to reflect. There are lots of ways to evaluate how SES impacted your relationship with money. First, consider your family’s socioeconomic status. Start with your household – or perhaps households, if your parents had shared custody or you lived with different family members for different periods of time.  

Then, compare your SES to the geographic region you grew up in, such as your neighborhood or town but also the wider metropolitan area. Consider if there were prominent deltas or if the wider community was more or less the same. Think about how your family used money and if it was similar or different from other families with a similar SES.  

Then, consider if your SES was the same or different across your extended family, such as grandparents, and households made up of aunts, uncles, and cousins. Did one nuclear family within the extended family have a higher or lower SES than others? Consider how your family members responded to any wealth or opportunity disparities.  

Another important thing to consider: was your family’s socioeconomic status consistent, or did you experience changes? Did your SES elevate or decrease over time? With recessions and layoffs, or new job opportunities, you may have experienced changes. If you experienced a change, think back to if your family members’ attitudes and actions toward money changed, and if it was in proportion to the change.  
Last, consider what age you noticed your family’s SES. If your family was transparent about money and opportunity, or there were clear disparities with other people you knew, you may have realized it sooner. If you grew up in a homogenous environment, you may not have realized it until later in life. That too can impact your thoughts and attitudes regarding money.

Considering Your Family’s Financial Literacy

Your family’s understanding of money management and the financial system can shape your earliest lived experiences with money. If you have family members with strong financial literacy, it provides a practical example for you to learn from and also correlates with having better financial stability.  

Consider if your family members were financially literate in general, or literate about some topics but not in others. Note if this was consistent across the family, or if they had to educate themselves on the topic. Think about which topics they understood and which they did not. Then, scrutinize whether your family members were self-aware about their understanding (or lack thereof) of finances or not.  

Take it a step further to reflect on how your family members acted regarding their financial literacy. Did they make it a point to educate themselves further about financial literacy if they realized they had knowledge gaps? Did they make it a point to pass down these lessons and educate you about money, or did they have a more passive approach? 

Finally, consider if this was uniform across your close family members or not. Perhaps one parent is more financially literate than another, or an aunt and uncle within your extended family are savvier than others.  

Reflecting on Cultural Attitudes About Money 

Different cultures have different attitudes about money, whether shaped by your ethnic heritage, religious beliefs, or even the region of the United States where you lived or live. Some cultures have a tradition of financial gift giving, such as those who celebrate Lunar New Year by gifting a red envelope with money, or those who give financial gifts as wedding presents. Others consider money an impolite topic to discuss. These beliefs are powerful influences on our actions and family dynamics, and trickle down to individuals. Let’s explore these origins now. 

Image of four women celebrating Lunar New Year dressed in red with an older family member giving a red envelope of money to a younger family member.

First, identify the key financial values and beliefs prevalent in your culture, such as the attitudes towards wealth, importance of saving, views on debt, and openness about money as a topic. Consider if your cultural background is more collectivist or individualist and how that plays out in cultural support networks.

Next, consider cultural norms about spending and consumption behavior, and displays of status, wealth, and success. Think about the cultural attitudes toward financial risk and investment. Identify cultural norms about gender roles that pertain to money.

Then, go broader and make the connection between how cultural or societal expectations influenced your family’s financial decisions and attitudes. Can you think of any examples of any cultural or societal norms that shaped how your family viewed money, financial stability, or success?

If you have different cultural backgrounds, compare and contrast them to determine if any are at odds with one another – such as if you have parents from different cultural backgrounds or if you grew up in an area where most people have a different culture than your family. Finally, reflect on which financial values stemming from your culture resonate with you inherently, and which do not align with your personal attitude.

Conclusion

We know we just threw a lot of questions and things to consider at you – and we commend you for digging into this topic! If you’re on a journey to develop a stronger relationship with money, it’s helpful to start at the beginning and understand your earliest influences around money and finances. When you can more objectively evaluate the origins of your financial habits, that allows you to reflect on what has shaped your choices and attitudes today. It can be hard, but it is an important step in cultivating a more intentional relationship with money that serves you best as an adult in the current economic system and your financial situation and can grow with you over time. 

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