Maybe you get your hair from your mom, your nose from your dad, and your chin from your grandma.
But did you know you can actually inherit beliefs about money from your family?
As I’ve been working on figuring out my own addiction to junk spending—buying frivolous things in order to get a temporary high from “retail therapy”—I’ve had to look at a lot of my old behaviors, thought patterns, and habits.
I’ve found it incredibly useful to write an analysis of what I call my financial genealogy, tracking the origin of my beliefs and behaviors about money back to my parents and grandparents.
And if you’re trying to figure out why you have certain financial issues that are specific to you and not your friends, you may want to give this technique a try.
Once you know the root or source of a behavioral pattern, you can understand it in context. And instead of beating yourself up about it, acquiring this new knowledge may help you have more compassion for yourself. As a result, you can build different financial habits without being dragged down by heavy guilt, or other emotions.
For example: I realized that I inherited the idea that buying a pricey restaurant meal is a fine reward for getting a good performance evaluation at work, or completing a big project around the house. That belief probably came from my mom. I love restaurants and fine dining, but I can derive just as much pleasure from a reward that doesn’t cost as much.
Your Financial Genealogy
Your financial genealogy report is a practical way to help figure yourself out and take actionable steps to change. Here’s how you do it.
Step 1: Write down the name of one adult who raised you.
It doesn’t have to be a genetic relative, but it must be someone whose influence on you was huge. For example, I’ll choose my dad.
Step 2: How did they spend money on household necessities?
Do you remember trips to the grocery store for necessary items? Was this a stressful experience as your parent searched for change in his pockets to pay for milk and bread? Or was it a carefree experience in which the cart was filled to the brim with goodies?
In my case, my dad was a very careful spender and saver. I remember him teaching me to make sure that the price tag on a sack of flour matched the price listed on the shelf label. The lesson? I ought to be careful and double-check the cost of items as well as things like coupon offers.
Step 3: How did they spend money on you?
Early on, you may have been taught that achievement ought to be rewarded in a particular way. Did you have an allowance in exchange for performing chores? If you got good grades, was your reward an experience—like a trip to the amusement park or the movies—or an object, like a new Barbie or comic book?
Conversely, you may have been denied a toy or an allowance when you misbehaved. Your caretaker may have withheld money as a punishment.
When I was a kid, my dad didn’t typically reward me for good grades with anything that would cost money. It was more a hug, or congratulations or praise. But he definitely seemed to enjoy back to school shopping and took a lot of care helping me choose notebooks.
That taught me that education is always a worthwhile investment.
Learn Better Money Habits
Step 4: How did they spend money on themselves?
Some parents are money martyrs. They imagine there is virtue in self-denial, even when they can afford a necessary new pair of shoes. Other parents will buy the fanciest shoes possible on credit on a whim. And then there are parents who research the right pair of shoes for their foot, compare prices at different stores, and finally, select one. That’s my dad.
The lesson? You should always get the best quality you can reasonably afford.
Step 5: Repeat this process with as many influential adults as necessary.
For me, that means my mom and my grandmothers. My mom and her mom were spenders and sometimes unnecessarily generous; my dad’s mom was a saver and sometimes unnecessarily frugal.
Surprise, surprise—I usually absorbed the habits that promised the quickest hit of pleasure.
Step 6: Which financial beliefs and practices did you inherit?
Look at how you regard paying for groceries, tuition, rent, clothes, and medical care. I’m glad I inherited my dad’s belief that education is a worthwhile investment. I see my grad school loan as “good debt.” And while my therapy is expensive, I see it as emotional education.
On the other hand, just as my maternal grandmother sometimes used to take the “treat yourself” concept a little too far, so do I! But the answer isn’t to veer to the frugality of my paternal grandmother. The answer is probably somewhere in the middle.
I’m learning to take notice of what I spend on food, and to make smarter choices when I can.
Changing money behavior
Step 7: Which financial practices feel useful? Which feel unhelpful?
Is it time to change your habit of stuffing cash under your mattress “just in case”? Perhaps it was a good idea for your great-aunt Matilda, but does it make sense for you?
Personally, I want to be more careful about checking prices. I also want to comparison shop for necessities as well as gifts, the way my dad always did.
One piece of caution: this exercise may bring up many memories. Be gentle with yourself and allow your thoughts to settle before you take action. Soon it may be time to re-envision your financial life by buying a book on money, using an online service like Stash to invest your savings, hiring a certified financial planner, or even talking to a therapist. This is an ongoing process, so congratulate yourself for the small wins, and you’ll likely feel motivated to keep improving.