Our parents have a huge influence on us in many aspects of our lives, including the way we view our finances.
I’ve been lucky to have picked up valuable personal finance habits from my parents, many of which have shaped me into who I am today.
That being said, the times that they lived in are incredibly different from what we have today.
This means that what might have worked for them in the past might not work today anymore.
And while our parents always want the best for us, that doesn’t mean that they are always right.
I’m not alone in this, as we can see from some responses gathered here:
Check out some of the responses here!
Here are some common beliefs from our parents’ generation which I personally do not subscribe to.
TL;DR: Financial Advice From Our Parents We Should Stop Listening to
Times are extremely different today as compared to 30 years ago.
We are very fortunate to have a multitude of information available to us with just a click of a button, something that wasn’t possible during our parents’ generation.
Having such knowledge means that it is also on us to be responsible for our own financial decisions, and discern what works for us and what does not.
Here is some financial advice that I personally feel does not work for my generation anymore.
- Having a degree means having a guaranteed career
- Just stick to having one job
- Putting your money in a savings account is the safest method
- Investing is too risky
- Insurance is a waste of money
Having a Degree Means You’re Guaranteed a Career
In the early 1980s, only 9% of students entered universities or polytechnics.
Back then, being a university graduate meant that you were the cream of the crop, and you’d almost be guaranteed a fast track to a successful career.
Nowadays, the number of university graduates has significantly increased, and like how it is commonly described:
“It’s a street full of university graduates now.”
Competition has never been more intense, and it is getting tougher to stand out from the crowd.
In addition, if anything, COVID-19 has shown us the vulnerability of our jobs.
With companies and teams getting leaner in light of technological advancements, the possibility of jobs being made redundant is also higher too.
This means that even if you are a university graduate, staying complacent and not upskilling with relevant skill sets could mean losing out on the chances of getting employed in today’s competitive job market.
Just Stick to One Job
I remember my parents’ concern when I first mentioned about switching jobs.
I was almost four years into my job back then.
Sticking to one job was somehow associated with job security and stability, and there has always been a stigma towards job-hopping.
While job-hopping might still be considered as a red flag towards some employers, perceptions are now changing.
Nowadays, companies value versatility in employees.
By moving between jobs, we can gain a diverse range of skill sets that would allow us to handle different roles in this changing tide of work today.
In fact, employers are also starting to embrace this new phenomenon.
Employee retention has become key to some companies, where employers are looking at the new priorities of employees today.
Putting Your Money in a Savings Account Is the Safest Method
I’ve had a savings account for as long as I can remember.
Since young, my angpao (red packet) money has always been channeled into my bank account, and that was the place that I knew would safeguard my money.
In fact, that was also the only way I knew to ‘grow’ my money, even when the interest rates were a paltry 0.05%.
However, I never knew that my money was actually depreciating due to inflation.
Which means that what I thought was ‘safe’ was ironically ‘unsafe’ to a certain extent.
Over the years, high-interest saving accounts have been popping up to offer better rates than 0.05%.
Even so, putting all my savings into a savings account is probably not the way to go… especially if I’m looking at early retirement.
With interest rates being drastically different back in the 1980s, it is no wonder that savings accounts were seen as something attractive to deposit funds in.
If only we still had interest rates like these…
Times are indeed different now.
Investing Is Too Risky
During our parents’ days, it was tough to acquire investment knowledge.
Investing was commonly viewed as a game only for the rich, and there were also higher barriers of entry to investing.
For individuals who are not exposed to the finance industry, the easiest way to get to know about financial instruments was through financial advisors, brokers, or friends and relatives.
For my parents, they would only know of investment opportunities through people around them.
And the investments that they made were solely based on trust without much knowledge on the subject matter.
As a result, they have incurred losses through failed investment opportunities, which has directly influenced their perception towards investing.
With that, I’ve always been taught that investing is akin to gambling, and the risks were terribly high.
It was only when I started learning about investing myself that I started realising that it was a lot less scary than I thought.
Nevertheless, I never blamed my parents because we had very different circumstances.
They were just doing their best based on their own personal experience to protect me.
And I’m glad to have the privilege to have so much information readily available to us today to learn from.
Looking to start on your investment journey too? You can do so right here !
Insurance Is a Waste of Money
Similar to investing, there were not many resources available to learn more about insurance.
A lot of our parents were sold insurance policies that promised them great returns along with insurance coverage.
Though this does not speak for all agents back then, a lot of them were sold products that were not best tailored to their needs, but products that earned a higher commission instead.
Many of them were riddled with whole life policies which back then were not the best for either savings or protection.
And these long-term policies came with hefty monthly payments as well.
As a result, I grew up thinking that insurance was just a blood-sucking machine.
It was only when I started reading up and researching that I realised the importance of insurance, and some key insurance policies I should be owning.
The world of insurance has thankfully shifted drastically since those years, and it is now a lot easier for us to compare policies between different institutions to learn what’s best for us as well.
Something that hasn’t been possible during our parents’ era.
What’s Best For Us Changes Over Time
There are so many things that are different between our generations.
And what used to work for our parents’ generation might not be the best fit for us.
While parents would always give well-meaning advice with our best interests at heart, it is up to us to determine what would be the best for us today.
Do you feel that your parents have an impact on your relationship with money? We find out how some people feel towards this!