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Everyone has a money story inherited from their family of origin. Whether money was scarce or abundant in your household growing up, how money was handled and discussed likely impacted how you feel about and relate to money as an adult.

No matter your financial circumstances now, there’s a good chance your early experiences with money factor into your current financial behavior and habits. But that doesn’t mean you have to repeat your parents’ mistakes or be limited by your past money experiences.

Here are ways you can avoid repeating the money mistakes of the past.

Take Stock of Current Finances

Where do you stand financially? By objective measures, how close are you to financial independence and security? One of the biggest mistakes people make is operating from a sense of how well they are doing rather than taking a close look at the numbers.

It doesn’t matter if your lifestyle is a step above the way you grew up or if you appear to be keeping up comfortably with the other families in your community. How well prepared you are for a job loss, economic downturn, or an unexpected major expense matters. It’s important that you and your family are taken care of if you can no longer work or that you can retire when you are no longer able or willing to work.

You might not be where you need to be financially yet, but working towards goals of financial independence and security offers peace of mind. One of the most commonly faced money pitfalls is the failure to climb out of a state of financial insecurity. What can you do to break this pattern?

In past generations, even people of modest means were more likely to save 10% of their income than higher-income earners today. With lifestyle creep and easier access to credit, far fewer families are saving sufficiently. Are you making progress, or are you falling behind?

Revisit Existing Money Scripts

We all have money scripts we play in our minds—adopted narratives about what money means, our relationship to money, and how money works. You may have grown up hearing your parents say things such as, “money doesn’t grow on trees” or  “you better get your money’s worth.” You may have heard things like, “money is the root of all evil” or “he must’ve been born with a silver spoon in his mouth.” How often do you have thoughts associated with these familiar sentiments?

If you grew up poor, your parents might have revered wealthy people or spoken disparagingly of them. You may have been told that if you work hard enough, you can be rich, or you may have been led to believe “people like us” will never have access to opportunities or nice things. If you grew up with wealth, you may have been groomed to believe you deserve it and that you’re entitled to live by a certain standard, or you could have picked up messaging that shamed you into guilt about having more than others.

Money is simply a tool. It circulates in exchange for value. Some people indeed have easier access to it, but the sooner you accept your lot in life and seek to improve it, sustain it, or enhance it with purpose, the better off you will be. Negative thoughts about money are not helpful, no matter where they originated. Revisiting and rewriting the scripts passed down to you from past generations is the first step.

Involve Children in Money Talk

The best way to break free from past mistakes is to focus on the future. With few exceptions, chances are the adults in your family did not involve you in financial conversations as a child, and you likely didn’t learn anything about managing money in school. Far too often, young people set off into the world without even a basic awareness of how to manage money effectively or build wealth.

It’s up to you to break this pattern in your own family by teaching your children about money early. An added benefit is that knowing they are watching will make you more mindful in your decision-making. Even if you do not include them in every detail, the awareness that you are modeling money management for your children can positively impact your money habits.

When your children enter adulthood and you are near retirement or old age, it’s important to reinforce responsible money management. Some Boomer and Generation X parents financially support adult Millenial and Gen Z children. This can backfire. Remember, they have many more years to earn while you reach the end of your wage-earning years.

You are not obligated to pay for college, give your children a down payment on a home, or get them out of a financial bind if it’s going to put you in one. You want to support and help them get started on the right foot, but not to your own financial downfall. In fact, overextending yourself for your children’s sake now could mean you will become more of a burden to them later. Being open and forthright with your children about your finances will help them take better responsibility of their own finances.

Partner with a Financial Professional

Working closely with a financial professional can help you make sound financial decisions, plan for the future, and invest skilfully. It’s important to find someone who will not only help you build wealth but also offer guidance and education along the way.

Perhaps your family didn’t have the resources to get help with their finances, and you think only extremely wealthy people work with advisors. Or, maybe you watched as your parents bought into fad financial products that only cost them money. Regardless of your backstory, it’s important not to let it cloud your reasoning. Partnering with a trusted financial advisor can help you make steady progress toward your goals, stay accountable to your vision for your life and retirement, and help you avoid past generations’ pitfalls.


Kevin Stoddard is a LPL Financial Advisor with Stoddard Financial in Medfield, Massachusetts. Stoddard helps clients throughout New England to identify, plan, and execute strategies designed for securing their desired financial future. With their Financial Wellness @ Work program, they engage, educate, and empower employees by helping them to understand and appreciate the value of their benefits package. 

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

This material was prepared by Crystal Marketing Solutions, LLC, and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate and is intended merely for educational purposes, not as advice.