My partner and I graduated during the prosperous 1990s, absorbing the misguided belief that jobs would always be abundant and that real estate was a foolproof investment. However, our first child arrived amidst the turmoil of the Great Recession, and the second during a difficult and drawn-out recovery. While we managed to keep our home, I found myself unemployed, and our savings evaporated faster than you can say “subprime mortgage crisis.” Navigating parenthood on shaky financial ground while witnessing friends lose their jobs and homes was a daunting experience. Like those who endured the Great Depression, I’ve grown cautious about money matters, and I’m eager to impart these lessons to my two sons. Here are the eight key principles I plan to emphasize:
- You probably don’t need it. Whenever you feel the urge to buy something new, hold off for a month. More often than not, that initial desire fades, making way for new priorities. Learning to live with those cravings can be quite liberating.
- Just because it’s offered doesn’t mean you should accept. If a bank says you can afford that dream house mortgage but your budget leaves you with mere pennies, trust your calculations over theirs.
- Consider layaway. Eyeing a big purchase? Set aside a little money each week. This not only helps to appreciate what you buy more but also prevents impulse purchases that often lead to regret.
- Home is where you make it. Owning property isn’t a prerequisite for creating a loving home. Many families thrive in rental spaces, illustrating that happiness comes from the people inside, not the ownership of the walls around them.
- Your home is not an investment. Be aware that your house may not appreciate in value when it’s time to sell. It’s primarily a place to live, not a scheme for financial gain.
- Invest in experiences, not possessions. Since our funds are limited, it’s wise to maximize happiness through experiences rather than material things. Research shows that adventures create lasting joy, so prioritize trips over the latest gadgets.
- Live frugally while you’re young. Ideally, no more than a third of your income should go toward housing, but in some areas, it can skyrocket to half. Many Millennials have thrived living with family or roommates, which is perfectly acceptable in your younger years.
- Embrace adaptability. Unlike previous generations that identified closely with their careers, today’s success hinges on flexibility and the ability to pivot as job markets shift. It’s crucial to continually enhance your skills and explore various fields.
I hope our children won’t have to recall the hardships of the recession. Ideally, by the time they enter the workforce, the economy will mirror the booming late ’90s—one can dream, right?
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Summary: Parents who experienced the recession share valuable lessons with their children about money management. They emphasize the importance of patience before purchases, the reality of home ownership, prioritizing experiences over material goods, and the necessity of adaptability in an ever-changing job market.