When you think about money, you might imagine spreadsheets, bank accounts, or investment portfolios. But the truth is, your relationship with money has much less to do with numbers and a lot more to do with memories. Specifically, the memories formed when you were too young to even understand what a budget is.
Here’s the thing: Money is personal. Two people can grow up in the same neighborhood, earn the same salary, and have wildly different financial habits. Why? Because money isn’t just about math—it’s about the stories we tell ourselves based on what we’ve seen, heard, and experienced.
The Invisible Hand of Your Childhood
Let’s start with this: Your first exposure to money was likely through your parents or caregivers. Were they savers, constantly putting away for a rainy day? Or were they spenders, living paycheck to paycheck, perhaps with a hint of stress at the dinner table? Did they talk openly about money, or was it a taboo topic shrouded in secrecy?
These early observations weren’t just moments—they were lessons. If your parents panicked during financial downturns, you might have internalized a fear of investing. If they spent recklessly and made it look fun, you might subconsciously associate spending with happiness, even if it’s fleeting.
I grew up in a middle-class household where my parents treated money as something serious but not dire. That balance influenced how I approach financial risks today. But I know people who grew up in homes where money was scarce and unpredictable—and they now view every financial decision as a potential crisis. Neither approach is inherently right or wrong; it just reflects the baggage we carry.
The Scarcity vs. Abundance Mindset
Here’s a key idea: If you grew up with scarcity—whether it was actual poverty or just a sense that there was never “enough”—you’re more likely to overemphasize saving and underemphasize spending or investing. The logic is simple: When you’ve seen how bad things can get, your instinct is to avoid risk at all costs.
On the flip side, if you grew up in abundance, you might have an easier time taking risks, but you might also undervalue the security that saving provides. After all, why worry about the future when the present has always seemed to work out?
Neither mindset is perfect. But understanding where your instincts come from is the first step in managing them.
How to Break the Cycle (Or At Least Understand It)
You can’t change your past, but you can change how much control it has over your future. Start by asking yourself a few questions:
- What’s your earliest memory of money? Was it positive, negative, or neutral?
- How did your parents or caregivers handle money? Did you admire their approach, or did it stress you out?
- What financial habits do you have today that reflect those early lessons?
Once you’ve identified those influences, you can decide which ones serve you and which ones don’t. Maybe you learned to save religiously, and that’s great. But maybe you also avoid investing out of fear—fear that’s rooted in a childhood experience that no longer applies to your current reality.
Your Story Is Your Advantage
The good news is that your financial story, however it began, is unique. It’s your advantage. Understanding the roots of your habits gives you insight into why you make the choices you do—and the power to change those choices if they’re no longer serving you.
The best investors, savers, and spenders aren’t the ones with the highest IQs or the fanciest strategies. They’re the ones who know themselves. And the better you understand your personal history with money, the more intentional—and successful—you can be.
Money isn’t just about numbers. It’s about psychology, emotion, and memory. And it starts earlier than you think. So, take a moment to look back. You might find the key to a better financial future hidden in your past.