Your First Money Memories May Dictate Your Entire Financial Future

Your first money memories may hold the keys to your relationship with money. Perhaps your first money memories may dictate your entire financial future.

My first money memory was getting admonished by my father for ordering lemonade at a restaurant. I was in the sixth grade in Kuala Lumpur. He said that instead of paying for sugar water, I should order water with a lemon slice for free. Not only was it free, it was healthier.

My second money memory was hearing my mother trying to encourage my father to spend more money. Although she was also frugal, I remember her saying he should spend more money to save time. I was in the seventh grade.

My third money memory was getting picked up in a black Mercedes SEL with fuzzy rear seats. It was owned by my father's friend who was throwing a Chinese New Year's party at his house. My father was already there, which was why I got picked up alone. I was in the eighth grade and thought this was the coolest thing ever. In contrast, we had a 15+-year-old paintless Datsun with missing hubcaps.

The Importance Of First Money Memories

What I realized from these three money memories is that they all started when I was in middle school. Further, they have all shaped the way I approach money today.

Therefore, as parents, it is best we teach our children about money as early as possible. Key lessons include:

  • Saving
  • Investing
  • Spending
  • Giving
  • Living

Further, we should lead by example. Our children are always observing what we are doing, even if we think they aren't paying attention. We should not only teach, but do.

Here are the lessons learned from my first three money memories.

1) Appreciate Value

The lemonade money memory taught me to seek value. Before buying anything, I always ask myself whether the marginal cost is worth it. Examples include comparing:

  • Public school versus private school
  • Buying a pair of Levi's versus a pair of designer jeans
  • Flying economy or flying first class
  • Doing push-ups and sit-ups at home versus paying for a trainer
  • Watching Netflix or going out to the movies
  • An economy car versus a luxury car
  • Paying for a room with a view or an inner courtyard room and just spending most of the time outside

If I was incredibly rich, the one luxury I would spend money on is flying private. If we could fly private, we'd pack up our car and easily load up the GulfStream G700 and fly to Hawaii and back tomorrow.

Alas, I can't even get myself to pony up for business class or first class because the marginal cost far outweighs the marginal benefit. Paying 3-5X for a flight just seems too much. I start to think every hour I can “endure” flying economy is like making a nice hourly wage doing nothing!

The lemonade money memory also taught me to appreciate the basics, which provide so much value. As a result, I've been able to minimize debt and maximize returns.

2) Use Money To Save Time

Although I was frugal when it came to paying for nicer things, the argument my parents had has always reminded me to use money to save time. Classic examples include:

  • Being OK to pay more for gasoline at a closer station instead of driving farther away for a lower price
  • Going to business school part-time instead of full-time
  • Saving more money in order to retire earlier
  • Paying up for a direct flight instead of a cheaper indirect flight
  • Buying a new electronic device for faster processing power

Without overhearing my parent's argument, I'm not sure I would have been as motivated to focus on financial freedom. During my roughest days at work, I kept thinking what a shame it would be to die of a heart attack by 60 and not experience my best life. As a result, I kept saving as much a possible to win back as much time as possible on the back end.

Now that I'm middle-age, the importance of spending money to save time or buy back time is my #1 priority. When you start hearing more people your age pass away you're reminded not to take any moment for granted.

If I was still working my day job in finance today, I know I'd be extremely frustrated and pissed off about my inability to spend time with my children. Children make time go by faster because they change so quickly.

3) Learn What's Possible

Finally, getting picked up in a luxury car and arriving at a mansion in the hills opened my eyes to what was possible. The owner made his fortune selling beverages in Malaysia. His wealth was particularly noticeable because there was a lot of poverty in Kuala Lumpur at the time as well.

The mansion party embedded in me the desire to become an entrepreneur. Although I didn't end up going the entrepreneurial route after college, I do have something entrepreneurial with Financial Samurai.

During my time studying various businesses during business school and at work, I realized I didn't want to have employees because that would create too much headache. Instead, I just wanted something simple that would also provide maximum freedom.

The “sacrifice” would be the inability to scale up to make mega-millions. But that was OK because I'm always reminded by my second money memory: use money to save time.

Once you develop a strong money mindset, you will undoubtedly earn more and build a greater fortune. The importance of developing a strong money mindset is one reason why I continuously share examples of great wins.

There are janitors making multiple six-figures a year. There are CEOs who run their companies into the ground and still walk away with a nine-figure severance package. Then there are gurus getting rich selling things without much credibility e.g. Dr Phil's best-selling weight loss book.

Yet, I still get pushback all the time from readers who feel they don't deserve to be rich for whatever reason. And despite publishing the first edition of my severance negotiation book in 2012, I'm still seeing people quit their jobs instead of negotiate a severance because they are too afraid to ask.

You can get mad at the people making fortunes or you can accept that there's enough fortune to be made for all. The choice is yours!

Teach By Example

Given your first money memories may determine your financial future, it's important as parents to teach and lead by example. No matter our financial situation, we must demonstrate to our children our work ethic and our appreciation of money.

Saying one thing and doing another is definitely not the way to go. For your children's sake, you can't afford to be weak and demonstrate a scarcity mindset.

I used to think early retirement might pose a problem for teaching our kids about money and work ethic. After all, how will they develop a work ethic if they can't see their parents working? However, for young children, we've discovered that it's very easy to classify any time not spent playing with them as work.

For example, they can see us typing an e-mail on a laptop, cleaning the house, pulling weeds, sweeping the driveway, and applying touchup paint to the walls as work.

As they get older and realize their parents don't have traditional day jobs, we will explain to our children the various passive income ways we make money, e.g. rental properties, dividend stocks, municipal bonds, real estate syndication, private equity, venture debt, online, and so forth.

Making Progress

So far, our plan is working. Every time my three-year-old wants to come upstairs to play, I can hear him first ask his mommy, “Is daddy working?” He checks to see if all is clear because he understands daddy needs quiet time in order to write a post.

We then explain to our son that mommy and daddy work in order to make money to pay for his food and toys. We then try to emphasize not to take money for granted. This means finishing all the food on his plate because we worked hard to make money to buy the food. This also means sharing toys with his baby sister instead of having a meltdown because some families can't afford toys.

One of my biggest fears is not only raising spoiled children, but also children with a scarcity mindset. If we keep on being mindful of the lessons we teach our children, perhaps one day, they will form helpful money memories to guide their financial journey.

Reader Questions And Recommendations

Readers, what are some of your earliest money memories? How have they shaped your financial future?

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30 thoughts on “Your First Money Memories May Dictate Your Entire Financial Future”

  1. I grew up a small farmer’s daughter — which tells you a lot, to start with. We worked selling sweetcorn and raspberries in the front yard at a homemade stand. Most of the money went to our parents, but we were given some, as well. Both Brother and I also babysat, did chores — and both started working early in high school, both to earn our lunches (in the cafeteria) and to earn money to pay our expenses and for college.

    I do remember dithering between a long stick of bubble gum or a candy bar — for 5 cents. Or saving up for 10 cents worth of redhots, scooped out of the bin at the dime store. I felt like a rich woman, being able to spend this!

    When I began working for a princely $1.50/hr at the local hardware store, my parents suggested:
    50% for college (put away in a bank account)
    10% for a tithe (to give away)

    the rest was for expenses, gifts, etc.

    I kept to that until college — and found out, to my surprise, that I had a fairly substantial amount to help pay for college. I also worked all through college to help pay the bills, as well. (Husband did the same.) Scholarships for me and the G.I. Bill also helped both of us get through school.

  2. We are immigrant refugees in the early 90s,
    My absolute first money memory is when we landed at JFK airport from a very long trip from USSR my grandfather put a coin into the gumball machine and gave me and my siblings a gumball each. I have never have never seen a gumball machine or ever tasted gum before!
    I got a paper route at age 12 at the local senior living community. I saved enough money that I was able to buy my own car at 16 (Being the oldest of 5 kids my parents certainly weren’t going to buy one for me) Best part of the paper route was getting tips at Christmas.
    At 14 I used to help my mom clean houses in the summer, I would get paid $5 for a small house and $10 for a big house. I have 3 girls myself now and can’t imagine them even being in the same situation.
    Now at 36 I’m still frugal and in a great place financially

  3. I definitely agree that money can buy time as in all the examples you mentioned above, but also, because being able to afford good medical treatments and healthy food raises life expectancy.
    As you, I was also lucky to have parents that were good financial models. One of my earliest money memories is when we were taking the train and always packing our sandwiches for the trip while most people were buying expensive ones at the train station or (even worst) in the train itself. Since then, I am always packing food when I know that I won’t be able to eat at home. When I was in college, every day during my lunch break, I was running first to the philosophy department to warm up my food in the free-to-used microwaves, and then down to the common room where there was free salt, paper and crockery! It may sound a bit like a hectic lunch break (and sometimes it was slightly the case), but eventually, I was eating homemade food that was healthy and delicious, and in one year, I was saving around US$1,500 in cafeteria costs!

    1. Smart. While I was in college, I went with a commuter meal plan, which allowed a certain number of meals per week or month or whatever. I would go to breakfast or lunch and bring a Tupperware, and take the next two meals from the buffet lines. Nothing wrong with a 3 meals for 1 special. It was always nice to have food on hand when studying and not having to figure out where the next meal was coming from. Always had something in my bag. I was also not afraid of packing a bagged lunch from home (something I still do to this day.)

  4. Sam, fantastic post! I can assure you that your worst fear will not come true. Based on all of the posts in which you’ve discussed your kids, I see that your children will not grow up spoiled. You have continued to teach them valuable lessons that parents often are either afraid to tell their children or just simply lack the knowledge. Keep up the great work!

  5. As a teen, despite peer pressure and the horrible habits that typical students possess these days of accumulating crippling loans to pay for an education and a lack of awareness when it comes to budgeting and spending, I make sure I live below my means because I look to the future. We really don’t need much in life and the less you have, the more happier you will be and appreciative of your hard work your parents have sacrificed for you, in my case since I’m still in college. I cannot remember my first memories of money because I make new ones every day! I’m grateful that I was taught financial literacy at a young age by my parents since I can’t rely on the education system, still till this day yet learning on my own is more fun and writing on my blog and YouTube makes it more exciting. Loving to live frugally is a gift!

  6. Great post.

    I sat my kids down a few years ago and told them my “money origin stories” so they would understand a few things.

    My father’s miserable mother gave each of us boys a dollar upon her leaving from a visit. We took her to the airport, I saw an arcade (I was 7-8) which I immediately entered and got change and started playing. A few minutes into my game, my ear was yanked back and granny B informed me that “I didn’t give you that God Daxxxx dollar to play no God Daxxxx video games!”. Nice work granny… nice work.

    My mother was VERY materialistic, often working hard to keep up with family members, an aunt got a new table, we got a new table (even if that meant having to pawn other things to afford to buy other things, if rent-to-own was a thing back then, we’d have been customers).

    I answered the door at home one day, I was home “sick” and a policeman asked where mom and dad where, we were taught to respect authority above ALL (or get a belt) so I told him anything he wanted to know. When mom came home that day, I told her what happened and she was PISSED that I answered his questions (what the hell?). It turns out he was there to serve us an eviction notice and remove us from the home.

    Ever had the power turned off and spent 4 days “managing the refrigerator” carefully to minimize spoilage? Ever have the phone shut off, in mid call?

    Once, while working at my grandfather’s store, I had a lunch (they had a greasy spoon in the back of the store) and after working around his place for several hours I went in and had a plate lunch, he had the helper give me a bill, knowing full well I had zero money (I was working for him, on his store, I was maybe 12…).

    A few years later, on a church trip, we stopped to eat at a steak house buffet. I had enough money to buy a small order of fries, which I embarrassingly consumed in the midst of folks enjoying a full meal all the while claiming it was all I wanted, that I wasn’t that hungry.

    Now, I concede, it could have been worse, much worse, had I not been born when/where/who I am.

    I will say though, those events shaped me. Now, retired MIL with a secure pension and near 1 mil net worth, I guess I’d say the lessons were worth it so, I wouldn’t change a thing, except to add in a few more positive role models, which I did not have until reading your money or your life at 30, that was life changing, and what lead me and the family to our current state.

    So, tell your kids your “origin stories” about money and other things, it will help them understand, just wait for them to be emotionally ready and be careful not to “pass on” the wrong ones…

  7. Money memories – now there could be others:

    Hearing about rent for the first time, and realizing what a landlord was.

    Discussing with my dad how much money his workers made per hour (he ran a construction business), and me using that to imagine… what if I made $100/day when I grow up? That would be pretty good!! (This was in 1990, I think minimum wage was around $6 and my dad paid his people $12-15)

    Having the reality of being a maid. My dad sent me to assist his friend who was a maid, in order to teach me about work and to help out (I was maybe 12-14). After 5-6 hours and 3-4 houses and a McDonald’s burger, I got $25. It was ok work, I thought the pay was fair… after all, I didn’t know how to clean really well!! But, I didn’t like how the one lady who was home when we were cleaning her house treated me. I tried to start a conversation with her (I was a smart 12 year old, used to having chats with adults and telling them about myself, what I liked, etc. And most grown ups usually humored me.) But she basically ignored me. I realized it was because I was “the help”. I had never been ignored before. I felt really pissed but didn’t say anything. Just kept doing my job. I also told my dad I didn’t want to go anymore because I regularly earned 3-5 times that amount selling hand-made bracelets on our local beach. Entrepreneurship starting young.

  8. Hi Sam — your blog actually does make me consider ” what if I have a heart attack at age 60?” The point I wanted to share is from this amazing book called, ***”How Not to Die”***. It is a straightforward read bringing together hundreds (or thousands?) of scientific, journal-published studies across nutrition, neuroscience and more talking about strategies to cut your risk of the most prevalent diseases from heart attacks, dementia, diabetes, various cancers, infections, and more. It’s quite amazing, and anyone who wants to enjoy their life, I encourage them to read it and make as many of the changes to their lives as possible!

  9. Fun topic, reading other responses reminded me of a few of my own. I can’t say these are my first memories, but certainly were lasting. listed in no particular order…

    1. I recall my dad used to ask me as a kid and even into teenage and college years, “do you have enough money?” He was ready and willing to give me a hand out, and I would always refuse, and say, “yes, I’m fine (even if I could have used the hand out).” I think for me it was a sense of pride that I didn’t need money from anyone else, and I didn’t want to be in debt. My dad had tricky ways to make us kids do things if we were given a favor. As a side story, he used to walk into a room and see us watching TV or something. He would say you guys look thirsty let me bring you a drink. So he would come in with some drink and a snack and hand it over. Seconds later, he would say once you are finished with that I just need you to do (insert manual labor job). So, I think I always had it in my mind to be cautious of taking from others because there was always something in it for them.

    2. I recall always saving my money whenever I got it as a kid: birthdays, holidays, collecting bottles and cans, etc. I would just stash the money and never spend it on anything. If I really needed something my parents would buy it, otherwise it was just a want, and I didn’t need it. So, I always had a stash of cash on hand. I can recall my parents at times would come and borrow money from me rather than going to the ATM if needed, because they always knew I would have cash. I was also prompt to remind them to repay me as soon as possible. Something my dad had said early on to me… “Those without dough, don’t go.” So I guess I always kept my money on hand to be ready to pounce on an opportunity if it ever came.

    3. Related to the one above, I used to use my cash as a kid as leverage to get things I wanted. As an example, If I wanted to take a trip somewhere, or stay at a friends house, I would use the following plan. I would get money from my stash and bring it to my mom, and say Can I go to/do XYZ, and follow it closely with and I’d also like to deposit this money into my college savings fund. And every time they would see the positive side of me saving, and agree to whatever I as asking to do. So I guess I learned leverage at an early age as well.

    4. I always felt proud as a kid giving money at church. I could have hoards of cash at home that I didn’t really need, and hear about all these other people out there with nothing. So each week, my family would pass down money for the collection, and I would always contribute some of my own money as well. You get a sense of pride giving to others in a way. So I think I learned that as a kid, Its important to look out for the less fortunate when able.

    5. I recall on a couple of occasions where my friends and I planned to go do something, and I would ultimately find out that one or more of them couldn’t afford the ticket, whether to an amusement park or movie or whatever. And I realized going alone isn’t as fun as going with friends, so I would ignore my dad’s quote (“those without dough, don’t go”) and I would pay for them or chip in. I think in doing this I learned that I want to be able to take care of friends and others, so I was always motivated to make enough money to be able pay for other people. As a related note, I remember biking to a pizza shop in NY as a kid with my friend. And we ordered some slices, and I said, “Don’t worry I’ve got this” and handed over the $5 or whatever. My friend was impressed that I paid for him, and I was proud to be able to pay for him. I said, you get the next one, (knowing it would never happen, and I didn’t care).

    6. Last one, My dad used to have another saying he would always tell us… “Work hard for four years, or work hard for the rest of your lives.” He was very proud that all of his kids went to college and ended up with multiple degrees. It was something that was very important to him, and he always wanted us to get as many degrees as possible. The more accreditations you have the more doors will be open. So, I guess as a kid I learned the importance of hard work and focusing on time/energy trade offs. Focus on the hard things (school, work, etc.) and your life will be easier.

    Like the rest of the people on here, I have a hope that I raise my kids well and they understand money. We have started talking to our 4 and 2 year old about it. When we go to the store (pre-covid) we would let them use the credit card machine to pay. And we would talk to them about how mommy and daddy work to be able to afford this food, clothes, etc. And they get it. They understand that work equals money and money equals stuff. However, it has back fired, at times because when we pretend we can’t afford to buy something they don’t need. They will say, “we’ll… can’t you just work harder so you can afford it?” So, I have to dance around that, and tell them if we worked any harder, we wouldn’t get to spend time with you. And wouldn’t you rather spend time with us, than have a new XYZ. And they say, “Of course!” Then usually follow it up with, “Maybe Santa, or the Easter bunny can get it for them…” In which we reply… Maybe.

    My kids are surely learning the ABC’s…Always Be Closing.

    1. Such great money memories! Your dad seems like a smart man. I so remember getting a five dollar bill or a $10 bill for Christmas or my birthday. What a treasure!

      I also remember losing a five dollar bill at an arcade park within minutes after my dad gave it to me. I was devastated and he wouldn’t give me any more money. So I just had to watch my friends play games.

      I think your kids will turn out great!

      1. See now imagine if I was there, I likely would have let you play a game or two with my quarters.

        But then again… those with no dough, don’t go.

        Maybe your dad had the same Thoughts as mine.

  10. “Going to business school part-time instead of full-time” Isn’t this an example of the opposite? Here, you’re giving up time and taking longer to finish.

    1. No, not if you think longer term. Going to school and working concurrently is more efficient than taking two years off and losing money to go to school and then try and find a job.

      1. But when you “lose money” to gain time (finish sooner), you’re still paying to save time. Plus you get your higher salary (one hopes) sooner.

  11. I remember my first money memory clear as day. In the summer we used to walk down to the public pool. Afterwards I was always hungry and if I had enough money I would order a hamburger at my favorite restaurant. If I didn’t have money I would get my free cookie at Albertsons. “Back then Albertsons would give you one free cookie a day.” I decided then and there that I would make enough money to be able to choose whatever food I wanted.

    To this day, food is the only thing I splurge on without any regret.

    1. There was a grocery store where I grew up that had the same policy. You could just walk up and they had a bin with freshly made cookies, all day every day. It was amazing, to be able to get a special treat every time you visited. Such a simple concept, but surely helps instill brand loyalty.

      I wonder on your big burger days, did you ever still venture over for a cookie dessert? That would be wining the lottery as a kid – Pool Day, Restaurant and a Cookie on top!

  12. Sam,

    Great post! What are your thoughts on the latest news from your former employer Goldman Sachs? Didn’t you say you worked in the Asian market for them? That would be an interesting post/point of view given your vast knowledge of the company and working that department for them. I’m sure you may have worked with some of the “Bad Actors Involved”

  13. This post hits home for me. One of my biggest concerns is making sure my 5 month old does not grow up spoiled and lacking of empathy for the less fortunate. In three generations our family went from refugees to American poverty to incredibly wealthy. Childhood experiences absolutely shape your outlook in life but the experiences I had as a child can only be artificially created now. I will definitely try several of the techniques you mention with my child as he grows up.

  14. This provided a fun thought experiment for me, thanks. My earliest three money memories:

    1. Maybe second grade: I had some friends over, and I proudly showed off my little money pouch with perhaps $20 I had saved up over many months. The next day I discovered the money was gone, and realized one of my “friends” must have taken it, but there was no way to identify who, and my mother chose not to press the matter with the other children’s parents.

    2. Perhaps third grade: My mother set up a bank account for me save my money, starting out with $20 my grandfather had gifted me for “seed money”. I discovered maybe a year or so later that, due to bank fees, there was no longer any money.

    3. Around fifth grade: Although not a specific moment in time, I remember the satisfaction of getting paid from either my paper route or mowing the neighbor’s lawn, especially after having endured the rain or snow (for the paper route) or the sweltering heat (for the lawn mowing).

    The actual lessons I took away from those experiences probably require a little more introspection on my part!

      1. Financially, my family and I are doing well, thankfully. A little bit of hard work and a lot of good luck go a long way. Good luck for me meant a good upbringing, marrying well, and being at the right place at the right time career wise. Early money lessons fit in there too!

        I should probably be thinking of retiring soon; if only there were some guidance on how to negotiate a good severance package…

    1. You got ripped off twice, once by your “friend” and twice by the bank. There’s mixed messages from society right there!

  15. My first money memory was loaning my friend .50c to buy some ice cream when we were 7. I asked for it back months later, but he refused to pay it because “that was SO long ago!” I’m still bitter.

    Lesson: Don’t loan money to friends or family. Either gift it to them or tell them to pound sand.

  16. Good points on connecting the dots. I hadn’t thought about how my earliest money memories have affected my current financial journey. My parents were pretty parsimonious and I never got an allowance or anything. But ny friends did.

    I grew up being very conservative with money b/c I never had much. But I also decided to work overtime to earn my own money and I’m very proud to have done so.

  17. Wonderful post! Love your money memories and emphasis on teaching children about valuing money and important money lessons from a young age.

    I’m not sure what my first money memories are but I do remember my mother constantly working late nights and weekends (often bringing me to her office) and her being the only one there. She often said things like “I’m always behind”, “It’s so hard to figure out this new system” and “the new girl makes more money than me and she’s younger”

    All of her gripes made me want to study hard in school so I could have the opportunity to get into a good college and get a good, reliable job and hopefully not have to struggle to keep up by working overtime week after week after week. It also made me realize that there’s a lot of inequality out there and you have to stand up for yourself to get paid what you deserve.

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