Most of us begin managing our own wealth for the first time when we leave home and live on our own. This was likely your first experience of paying bills and making sure you could meet your financial obligations.
At this stage, you may have had to learn various lessons about budgeting, saving, or using debt. However, what you might not realise is that the way you approach your wealth is often determined long before you leave home and take control of your own finances.
According to Yorkshire Bank, children can form basic money concepts by age three. Many money habits, including the ability to plan ahead or delay gratification, are set by age seven.
This means you inherit financial behaviours from your parents and could instil the same habits in your own children. In some cases, these might be positive lessons that support your financial plan, but some could make it more difficult to achieve your goals.
If you can identify and potentially correct certain habits, you might find it easier to manage your wealth effectively.
Read on to learn three generational financial habits and how you could change them.
1. How you approach conversations about wealth
Attitudes have changed in recent years and research shows that the younger generations are more comfortable having conversations about their wealth.
A survey from YouGov reveals that only 17% of those in Generation Z think it is rude to talk about money. That figure rises to 50% among baby boomers.
Despite this shift, the survey found that overall, 38% of people wouldn’t discuss their wealth with friends and family.
Your attitude to talking about wealth is largely shaped by your parents. If there were open conversations about the family finances while you were growing up, you may feel more comfortable talking about it with your own children.
Yet, if money was always a taboo topic, you might shy away from important discussions about your wealth. Unfortunately, this could affect your financial wellbeing.
Indeed, the YouGov survey found that people who describe themselves as “very financially comfortable” are also more likely to have open conversations about their wealth.
This correlation may exist because discussing financial matters creates more opportunities to plan together as a family. Additionally, having conversations about money with children from a young age helps you teach them important financial concepts such as budgeting and saving.
In time, this could mean that your family are better prepared to manage their own financial plans.
It’s important to consider how your family approached conversations about wealth when you were growing up, and whether this might influence your behaviour now. If you notice that you tend to avoid talking about your finances, you may want to make an effort to be more open with your loved ones.
2. Your attitude towards saving and spending
The balance between saving and spending is a crucial financial planning concept. If you spend all your income and never save anything, you can’t build wealth for the future. However, if you focus too much on saving, it’s harder to enjoy a good quality of life in the short term.
The patterns you picked up on as a child may have a significant influence on your spending and saving habits in adulthood.
If your parents had a very short-term view and tended to spend liberally, often indulging in lots of luxuries, you might find it more difficult to manage your spending. As a result, you may struggle to maintain a regular saving habit.
Conversely, your parents might have been avid savers, rarely spending on luxuries and setting aside as much as they could.
While this might inspire you to save regularly, you may be reluctant to enjoy your wealth in the short term.
If you want to break out of inherited spending patterns and support your own goals, it’s useful to think about how your purchases affect your quality of life.
For instance, taking a holiday with family is a valuable experience that may be worth spending on. Conversely, buying lots of material items such as expensive clothes may be less likely to have a lasting effect on your wellbeing and happiness, despite offering short-term gratification.
Viewing financial decisions in terms of the value they add to your life could help you make more informed choices about when to spend and when to save. This may mean you can balance short- and long-term goals more effectively.
3. A “keeping up with the Joneses” mentality
The way that your parents viewed their financial position in relation to others could have a significant effect on your mentality as an adult.
It might have been important to your family that they “keep up with the Joneses” by matching the lifestyles of neighbours and friends. Whether this meant buying a new car or renovating the family home, financial decisions would be focused on presenting a certain image to others.
It’s easy to pick up this behaviour as an adult and view your own success in relation to your peers. This could mean you feel pressure to keep up with those around you, leading you to live beyond your means or spend on things you don’t truly value.
For example, if you like to drive and having a new car is important to you, that’s fine. But if you’re only buying a new car because you’re comparing yourself to others, that isn’t necessarily a beneficial way to use your wealth.
Crucially, the money you spent on the car could have been used to purchase something more meaningful to you or saved for important future goals.
That’s why having a tailored financial plan is so important. We work with you to identify what your unique priorities are and highlight important goals you have in life.
This means you can direct your wealth towards creating your ideal lifestyle, without worrying about anybody else.
Get in touch
If you want to change your relationship to your wealth, we can support you.
Please give us a call on 01276 855717 or email info@braywealth.com today.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
All information is correct at the time of writing and is subject to change in the future.
Approved by the Openwork Partnership on 24/07/2025
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