Personal finances

5 Generational Money Taboos That Must Die – Kiplinger’s Personal Finance

Summary

While often afraid of becoming our parents, the truth is, we typically inherit our relationship with money from them – as they did from theirs. Many of us were raised to think that talking about money is taboo, but this idea perpetuates financial illiteracy, and avoiding money conversations can have a lasting negative impact on our own money attitudes, relationships and life goals.  Only 24% of millennials demonstrate basic financial literacy, according to a report by the National Endowmen…….

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While often afraid of becoming our parents, the truth is, we typically inherit our relationship with money from them – as they did from theirs. Many of us were raised to think that talking about money is taboo, but this idea perpetuates financial illiteracy, and avoiding money conversations can have a lasting negative impact on our own money attitudes, relationships and life goals.  Only 24% of millennials demonstrate basic financial literacy, according to a report by the National Endowment for Financial Education, which translates to three-quarters of a generation being ill-prepared for their retirement or other financial milestones. Having forthright conversations about our finances can help us learn, grow and better prepare for our future.

Money wasn’t really talked about in my own family growing up. Being raised in an Asian household, a significant emphasis was placed on education, but oddly enough, no financial education. It wasn’t until I graduated college and entered the “real world” (and had to pay my own bills) that I began to adopt my own foundational truths. Since then, I’ve shared these with countless families over the years in my work as a financial adviser. 

Simply put, some long-held beliefs about money no longer hold. Many of these ideas that have been passed down through generations should be put out to pasture. Here are five outdated taboos, in particular, that need to be banished, followed by some more helpful mantras that can serve as replacement for them.     

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Taboo No. 1:  Debt is always bad. (False!)

Many parents tell their kids that being in debt is bad and something to be avoided. But there are different kinds of debt, and not all are equal. For example, most homebuyers will need to take on a mortgage when they decide to make the big purchase, which is an example of good debt. And student loan debt isn’t necessarily bad either, since that’s considered an investment in your future!

Instead of being apprehensive about the idea of debt, it’s best to educate yourself on things like interest rates, credit scores and loan terms to make sure you can manage debt properly. In fact, if you’re disciplined enough and are one to pay off things like credit card bills in full every month, you can use some of the rewards benefits to your advantage.

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Taboo No. 2:  It’s never OK to cut off your kids. (Sorry, kids, but that’s false!)

I’ve seen first-hand how difficult it can be for parents to cut off their kids financially. In fact, I’ve seen clients continue to give their children a monthly allowance well into their 50s! Now, being a parent myself, I understand how hard it can …….

Source: https://www.kiplinger.com/personal-finance/603411/5-generational-money-taboos-that-must-die