15-06-2025
Parental wallet wisdom: How childhood experiences shape lifelong financial habits
Childhood experiences significantly shape financial habits, influencing attitudes toward money in adulthood.
However, these can be changed with intentional effort, highlighting the importance of modelling and teaching thoughtful money management to children.
Teaching key financial lessons, such as delayed gratification, budgeting, saving, and investing, helps set children up for future success.
Money, a concept that surrounds us from an early age, whether we come from affluent families or disadvantaged backgrounds, has a far-reaching impact on our lives.
According to experts, the way our parents or guardians handled money during our childhood influences our relationship with finances as adults.
As a young woman on the cusp of turning 30, I've often wondered why I've burdened myself with hyper-independence. Even in dire situations, I hesitate to ask anyone, not even close friends, for financial help.
It took a minute for me to realise that this fear of reliance is deeply rooted in my childhood experiences. Raised by my grandmother and mother, with my grandmother as the breadwinner, money conversations in our home were often tinged with tension.
As a child, every financial request—from a pair of shoes I longed for to a trendy school bag—was met with tough conversations. Rightly so, because money was tight and reserved for our basic needs.
These experiences created in me a reluctance to ask for anything outside what was necessary for survival. I grew up equating financial requests with stress and fear.
I vividly remember telling myself as a child, 'You need to wait, work hard, and earn your own money to avoid these difficult moments.'
This mindset led me to pick up odd jobs during school vacations to save for things close to my heart. Only in adulthood, during a conversation with financial expert Gugu Sidaki at a media launch about launching a literacy project, including kids' financial literacy, did I understand how these habits originated from those formative experiences.
How childhood shapes financial habits
Sidaki, an advisor and manager at Wealth Creed, emphasised that financial habits form much earlier than we might think—by the age of seven.
'History suggests that your financial habits are set by the time you turn seven, much like your personality, and if you think about it, before the age of seven, you don't necessarily have a language for money or financial habits,' she said.
She explained that children, being tactile learners, process habits through what they see, hear, and touch. For this reason, Sidaki mentioned the importance of modelling thoughtful behaviours around money.
'For anyone with children—or access to children—it's vital to align your words with your actions when it comes to managing money,' she said.
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Sidaki also shared her personal experience, how that affected her, and the steps she took to help correct that behaviour.
She recalls growing up in a financially stable environment where her father, a successful entrepreneur, always had cash on hand.
'My parents kept a basket of change in their wardrobe. We were allowed to use it for bread or anything else we needed if they weren't around.
No one ever checked how much was taken or what was left. As a child, I'd simply dip my hand in and use the money. It never occurred to me that money could run out or that budgets were finite,' she said.
Those experiences shaped her belief that money was abundant, always available, and never a source of worry. As an adult, this mindset translated into being an overspender.
It was only when she began working in personal finance that she started to interrogate her money habits.
'I realised that my belief in money's abundance stemmed from those childhood experiences. Now, with the right tools and understanding, I manage my financial behaviours much more effectively,' she added.
The silver lining
While early experiences with money heavily influence financial habits, Sidaki stressed that these behaviours are not set in stone.
She said:
You can change the behaviour. It just shows how intentional you have to be with your words and actions around children.
Additionally, Sidaki shared crucial tips to help children become financially secure and responsible adults capable of managing and growing their resources.
Delayed gratification
Teach kids to wait and not give in to every whim. Understanding the principle of patience sets them up for financial habits such as long-term investing and saving.
Saying 'no' as a parent helps them learn discipline and realise they cannot always have everything immediately.
Planning and budgeting
Coach children on making a shopping list and sticking to it. This creates an understanding of budgeting and allocating a finite amount of money to specific needs, helping them avoid overspending and potential debt.
Saving and living within their means
Instil the lesson of not spending all their money.
Guide kids on ensuring their expenses are less than their income and remind them about the unpredictability of financial emergencies. Teach them to save money consistently.
Investing
Introduce kids to the concept of investing early. Encourage them to put aside savings into smart, good-quality investments. Caution them against scams and emphasise getting professional or expert advice to grow their wealth sustainably.
