Our parents have a huge influence on us in many aspects of our lives, including the way we view our finances.
I was fortunate to have inherited valuable personal financial habits from my parents, many of which shaped me into who I am today.
That being said, the times they lived in are incredibly different than they are today.
This means that what might have worked for them in the past may not work today.
And while our parents always want the best for us, that doesn’t mean they are always right.
I am not alone in this, as we can see from some of the answers gathered here:
Check out some answers here!
Here are some general beliefs from our parent’s generation that I personally don’t subscribe to.
TL; DR: Financial advice from our parents that we shouldn’t listen to anymore
The times are very different today than 30 years ago.
We are very fortunate to have a wealth of information available at the touch of a button that was not possible during our parents’ generation.
Knowing this means that it is also up to us to be responsible for our own financial decisions and to see what works for us and what doesn’t.
Here is some financial advice that I think has stopped working for my generation.
- Having a degree means having a guaranteed career
- Just stick with one job
- Putting your money in a savings account is the safest method
- Investing is too risky
- Insurance is a waste of money
1. A degree means you are guaranteed a career
In the early 1980s, only nine percent of students were in universities or colleges.
At the time, being a college graduate meant you were the crème de la crème and you were almost guaranteed a quick path to a successful career.
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Nowadays the number of college graduates has increased significantly, and as it is broadly described:
“It’s a street full of college graduates now.”
The competition has never been so intense and it is becoming increasingly difficult to stand out from the crowd.
In addition, Covid-19 has shown us the vulnerability of our workplaces.
As companies and teams get leaner as technology advances, they are also more likely to be laid off.
This means that even if you are a college graduate, complacency and lack of qualification with relevant skills can mean that you lose chances of getting employed in today’s competitive job market.
2. Just stick to a job
I remember my parents’ concern the first time I talked about changing jobs.
I was in my job for almost four years at the time.
Holding on to a job was somehow linked to job security and stability, and there was always a stigma about job hopping.
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While job hopping can still be seen as a red flag for some employers, perceptions are now changing.
Nowadays companies value versatility in their employees.
By moving between jobs, we can acquire a wide variety of skills that would enable us to take on different roles in this changing tide of work today.
In fact, employers are also starting to embrace this new phenomenon.
Employee retention has become a key for some companies where employers are looking at employee’s new priorities today.
3. 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 I was young, my Angpao (red packet) money has always been transferred to my bank account and that was the place I knew would protect my money.
In fact, it was the only way to “grow” my money, even if the interest rate was only 0.05 percent.
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However, I never knew my money was actually depreciating due to inflation.
Which means that what I thought was “safe” was ironically “unsafe” to some extent.
Over the years, high-yielding savings accounts have popped up that offer interest rates better than 0.05 percent.
Even so, putting all of my savings in one savings account is probably not the right way to go … especially if I am retiring early.
With interest rates differentiated dramatically in the 1980s, it’s no wonder that savings accounts were seen as attractive for depositing funds.
If only we had such interest rates …
Times are actually different now.
4. Investing is too risky
In our parents’ days it was difficult to acquire investment knowledge.
Investing was widely viewed as a game only for the rich, and there were also higher barriers to entry to investing.
For people outside of the financial industry, the easiest way to find out about financial instruments was through financial advisors, brokers, or friends and relatives.
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For my parents, they would only know about investment opportunities from people around them.
And the investments they made were based entirely on trust with little knowledge of the subject.
As a result, they have suffered losses from failed investment opportunities, which has directly affected their perceptions about investing.
It always taught me that investing was like gambling and that the risks were terribly high.
It wasn’t until I started learning about investing on my own that I realized it was a lot less scary than I thought it was.
Even so, I never blamed my parents for having very different circumstances.
They just did their best to protect me based on their personal experience.
And I’m happy to have the privilege of having so much information available today to learn from.
Do you want to start your investment journey too? You can exactly here ! “
5. Insurance is a waste of money
Similar to investing, there weren’t many resources available to learn more about insurance.
Many of our parents were sold insurance policies that promised them good returns in addition to coverage.
While this didn’t apply to all agents at the time, many of them were sold products that weren’t best tailored to their needs, but products that instead earned a higher commission.
Many of them were riddled with life insurance policies, which at the time were not the best for either savings or protection.
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And these long-term policies also came with high monthly payments.
As a result, I grew up thinking that insurance is just a blood-sucking machine.
It wasn’t until I started reading and researching that I realized the importance of insurance and some of the important insurance policies I should own.
The world of insurance has thankfully changed drastically over the years, and it is now much easier for us to compare policies between different institutions to see which is best for us too.
Something that wasn’t possible in our parents’ day.
What is best for us changes over time
There are so many things that differ between our generations.
And what used to work for our parents’ generation may not suit us.
While parents always offer well-intentioned advice, it is up to us to determine what is best for us today.
This article was first published in Seedly.
