What did your parents teach you about money?

The way we saw our parents handle money plays a part in how we handle our own money and wealth.

This parental influence stems from their financial wellness and stability. In fact, it’s out of this influence that these financial characters are derived:

THE EXTRAVAGANT

A person who grew up with extravagant parents will likely be a spendthrift because he has always had everything at his disposal. She was never told no and therefore has a sense of entitlement. There are also those who overspend because they grew up in poverty.

“Such people will deem their spendthrift tendencies as a form of compensation,” says James Njenga, a personal finance expert based in Nairobi.

He says that such an attitude will be accompanied by a dangerous caveat.

“This form of compensation does not offer any form of financial insurance and could slide you back to the same financial quagmire you’re

overspending your way from,” he says. Also, it runs the risk of influencing your kids to become extravagant by placing everything at their disposal

contrary to your own upbringing.

THE FRUGAL

This common where a family enjoys an entrepreneurial lineage.

For example, Nairobi-based entrepreneur and start-up coach Tonnie Mello says that his businesses and financial outlook is largely influenced by his family’s entrepreneurial heritage.

“I am a fourth generation entrepreneur, a heritage I carry with a lot of pride. My parents made me work. I learnt that to get a satisfactory financial reward, I must invest time, effort and resources, and be frugal because wealth creation does not condone wastefulness,” he says. There are people who will be extremely frugal if their upbringing was characterised by financial hardship.

“For such people every coin must be accounted for. They are so afraid of returning to the kind of financial hardship they saw their parents endure that any shilling that is lost is seen as a financial threat,” he says.

FISCAL RESPONSIBILITY AND PASSION

If a parent had a nose for money, it is likely that her kids will follow suit. This is because they are likely to inherit a sense of financial responsibility and passion.

Catherine Kinyanjui, who runs a furniture business in Nairobi, says that she could not have gone into this line of business were it not for her parent’s influence.

“They ran a business that revolved around home décor and interior fixtures.

As a result, it was easy to grasp the financial wisdom that is needed to open and run such an enterprise,” she says. Mello adds that this kind of influence also teaches you the value of money and what it means to achieve your goals.

“I learned to stick to what I love because ultimately, it is out of it that I’ll really make money,” he says.

THE HAND THAT GIVETH

The art of giving in order to receive is a common teaching among parents.

In fact, says Njenga, many people’s attitude towards giving out cash to the needy or even family members is largely influenced by such parental teachings and actions.

“We all grew up seeing our parents financially helping a relative here or a friend there. In turn, we end up doing the same,” he says. But this is not always the right influence.

For example, Francescah Munyi, the founder of agri-business firm, Kofar, lists handing out money easily to relatives and friends as her biggest financial error.