Your Childhood Money Classroom

Spaghetti night changed my life. I was in second grade, and I was having dinner at my best friend’s house. Katie Thompson lived down the street from me, and we had been friends since before I could remember. I had been to her house dozens of times to play, and she’d been to mine a lot. Our moms were good friends too. As a mom myself now, I know that when my kids play well with my friend’s kids, it’s the absolute best. It must have been a total win for our moms that Katie and I were attached at the hip.

That night at dinner, though, something happened. And when I look back, it was a pretty profound moment in my life. It was getting to be dinner time, and Katie’s mom told us we were going to have spaghetti. I was thrilled. My mom made spaghetti all the time at our house, and it was one of my favorites. (Even to this day, it’s one of my go-to dinners!) But when we sat down to actually eat, something wasn’t right.

The noodles were way longer than they were supposed to be. My mom always broke ours in half. These noodles were so long they seemed to never end. The sauce was dark red, almost brown, and worse, there were these disgusting-looking balls of meat sitting in the middle of the dish (aka meatballs—which I’d never seen before). Spaghetti sauce was supposed to be bright red with tiny pieces of ground-up meat in it. And where was the bread? There was supposed to be bread! What were we supposed to dip into the extra sauce on our plate?

As I sat there in confusion, Katie’s family happily dug in to the meal using their spoons to twirl the spaghetti around their forks to eat. At home we cut our spaghetti with a fork, and every now and again, you’d hear a slurp from someone at the table. Katie’s mom poured us milk to drink, which was so strange to me. In our (very southern) house, the only thing you drank at dinner was sweet tea. What I was experiencing at Katie’s was all wrong in my mind. No, no, no! This was not spaghetti, and this was not how spaghetti night was supposed to go! My little world was shattered.

It’s one of the first memories I have of realizing not everyone did things the way I did. Until that moment, I just assumed spaghetti only looked one way—and I’m pretty sure Katie thought the same thing! She expected a long-noodle, dark-sauce, meatball dinner with milk, and I expected a short-noodle, bright-red-sauce, bread dinner with sweet tea. We can all have the same formula for something as simple as spaghetti: A spaghetti dinner equals noodles, meat, and sauce. But there are a million ways to make it, and as a result, it can look and taste very different from one house to another.

I find the same is true for money. Each home is unique. Every parent is different. How you grew up and the environment you were raised in shaped your money beliefs and your habits with money in very specific ways. That’s why the first step in understanding why we handle money the way we do is to begin with our childhood. Because as children grow, more is caught than taught, meaning children absorb a lot about money without even realizing it. For some, money is stressful and secretive. For others, it’s peaceful and positive. It’s all the same basic ingredients—money, income, bills, goals—but it can look and feel very different from one house to another.

How My Money Story Began

How and why we relate to money the way we do as adults is largely influenced by our parents or the people who took care of us growing up. This is true no matter what kind of home we grew up in, regardless of whether we grew up with one parent, two parents, or relatives.

My money story began during the hardest financial season my parents would ever face. I was born in April, and they filed bankruptcy papers in September of the same year. My older sister was about three years old, so with a brand-new baby, a toddler, and—as Dad says all the time—“a marriage hanging on by a thread,” they hit rock bottom. Hard. It took a good five years for them to climb out of that hole—right around the same time as my earliest memories.

I don’t remember the initial crash of the bankruptcy. What I remember is the aftermath and what became a new way of living with money for our family. My parents started talking about money with each other, they budgeted what little money they did have, and they avoided debt like it was the plague. We shopped at consignment stores for clothes, never took a vacation, and only ever saw the inside of a restaurant on our birthdays. That was how I thought everyone lived. My parents’ perspective on debt, budgeting, and saving deeply impacted my own perspective.

Because of my parents’ hard work after that soul-crushing bankruptcy, I was able to learn firsthand the value of managing money well. I learned my income is my biggest wealth-building tool—so I never took on any debt and I never will. In fact, I’ve been working Dave Ramsey’s Baby Steps my entire life! I don’t say that to pat myself on the back, but to show you how big of an impact parents have on our money outlook.

Your story may not involve something as drastic as bankruptcy, but the way your parents viewed and handled money during your childhood is extremely important for you to understand. Your childhood household was your money classroom. As an adult, you may handle money much like your parents did when you were a child, or you may have deliberately chosen to modify—or do the exact opposite of—what your parents did. Regardless, we each learned lessons there that we’ve taken into adulthood. Some are good habits and healthy views on money that help us. And some are lessons we wish we could unlearn.

Popcorn

Growing up, one of the biggest treats for us Ramsey kids was going to the movie theater. Part of the fun of going to the movies was the full experience—the movie, the Coke, and the popcorn. One year, my mom bought an extra-large bag of popcorn there so we could have free refills. At the end of every movie, Mom would dump out any uneaten popcorn, fold the bag neatly, and stuff it into her purse. The next time we went to the theater, she would take out that same bag, unfold it, and get her free “refill.” Sometimes she would even send one of us kids to get it!

One time, I was the lucky refiller. A kid working the concession stand just looked at me and that oily, creased, obviously used popcorn bag. Clearly confused, he asked, “Has this bag been used before?” I felt like I had been caught for insider trading! I just gave him a nervous grin, took my refill, and walked quickly back into the theater.

That’s right, ladies and gentlemen, we’d technically been stealing popcorn from that place for years! We told that story one night at dinner a few years ago, and my dad was dying: “Sharon! I cannot believe you stole popcorn from the movie theater!”

“David,” she said in her sweet southern accent. “I wasn’t stealing. I was being economical.”

Now, I can tell you that today I have a deep conviction to buy popcorn anywhere popcorn is sold to make up for all those years of “free” refills. That level of “economy” is not a habit I took with me into adulthood!

Of course, this is a lighthearted example of how our child­hoods impact us as adults, but these experiences aren’t always lighthearted. Whether it’s frugal living or lavish spending or some­where in the middle, we need to spend some time exploring our money classroom to discover how it’s shaped us.

Different Perspectives

As you think about how you were raised, keep in mind that you and your siblings may have different perspectives of what it was like growing up in your house. We’re all wired differently. Our passions, our fears, and our dreams are different. Even if you had siblings who grew up in the same house, and even if you had similar external experiences, the way you guys all perceived and internalized those experiences can be very different. The same goes for your best friend. The same goes for your spouse, if you’re married. The same goes for your brother-in-law.

Here’s an example: My parents were right in the middle when it came to strictness in their parenting. If I was at a sleepover and a friend’s parent wanted me to call home for permission to watch a certain movie, my parents would always say yes. I mean, it’s not like we wanted to watch Silence of the Lambs in the fifth grade. So they were definitely not strict about movies.

They were, however, very strict on curfew. My older sister, Denise, had it the hardest. Poor firstborn. As the middle child, I had a little more wiggle room. And when it came to my younger brother, Daniel, he basically got away with anything. As a mom with two older daughters and a younger son, I totally understand that now.

Denise was a junior in high school when I was a freshman. I was thrilled when she got her driver’s license. It gave me a real taste of freedom. We could do things without my parents having to drive us! Every Wednesday night, Denise and I would go to our church’s youth group. Afterward, we’d all go out to the same Mexican restaurant down the street from the church, just a bunch of teenagers devouring chips, queso, and water. We were so cheap we wouldn’t even buy a Coke! But thanks to Mom and Dad’s example, we did always leave a tip.

One Wednesday night as we were headed out the door for youth group, Dad yelled, “Be back tonight!” We looked at each other, puzzled. What did that mean? It wasn’t a complete thought, but we were already running late, so we didn’t stop to ask questions. As we were buckling our seat belts, Denise said, “We have to be back by nine thirty.” I disagreed. I said that since he didn’t give us a specific time, ten was fine. She responded that Dad always said she needed to be in by nine thirty, and if she was a minute late, she’d be grounded. For some reason, Mom and Dad let me stay out until ten sometimes, so I used my natural sales ability and convinced Denise to stay out later.

When we got home at ten, Mom and Dad asked why we were late. Denise glared at me. Sure enough, she was right. I was truly shocked. Dad reminded us he had never let us stay out past nine thirty on a school night. And that even if he hadn’t given us a specific time, the expectation had already been set. Thankfully, there was no grounding for either of us, but I’m still convinced, decades later, I was in the right.

See? Two different kids, two different personalities, two different experiences—same set of parents. As we unpack the dynamics of your childhood home, remember that your siblings may have different views of how your parents handled money. Heck, even your parents probably have different perspectives and memories when it comes to how they raised you. That’s okay. What matters is understanding how it affected you.

How We Learn about Money Growing Up

When we look at our childhood money classrooms, there are really two ways we learned about money: what our parents communicated emotionally and what they communicated verbally. We experience emotional communication through the positive or negative vibes we get about something even if we can’t pinpoint exactly why. When emotional communication is positive, we feel calm, and when it’s negative, we feel stressed. This type of communication is as powerful—if not more powerful—than verbal communication.

Growing up, you may have sensed that money was stressful. Maybe you can’t say why specifically, but you had a general uneasiness talking about anything money-related. Maybe you could feel the tension in the room when your dad found out about something your mom bought. Sometimes the anxiety was so thick you felt like you could cut it with a knife. Or maybe you had a hard time telling your parents you needed money for school because you suspected they would react negatively. You felt like you were walking around on eggshells without knowing why.

On the other end of the emotional spectrum, you may have sensed a calm and secure feeling about money. If the car broke down, it didn’t faze your parents. They just took it to the repair shop and got it fixed. If your winter coat tore accidentally, it wasn’t a big deal. You just got another one. You didn’t hesitate about asking for something you needed. You didn’t always get what you wanted, but buying things wasn’t stressful. There was a sense of stability and control.

We also learned about money through verbal communication—what was (or wasn’t) said in our homes. Some households were verbally closed. Your parents didn’t talk about money in front of you. Maybe they didn’t talk about it at all. There was never any discussion around the dinner table about debt, budgeting, or investing. Plus, you knew not to talk about some things, like money, religion, politics, sex—or all of the above—and so you never did. There was no discussion, no conflict, no give-and-take—just an absence of communication.

For other households, money was an open and ongoing conversation. Maybe your parents talked about budgeting. Maybe they discussed putting off one purchase to make room for a different one. Maybe the family voted on how to spend money in a particular category of the budget. This dialogue may have been peaceful: You heard calm and controlled conversations about money. Or on the flip side, you may have heard constant fighting and yelling. Arguing is still open communication because even though there’s conflict, you are talking about the issues.

These two types of communication—emotional and verbal—intersect with one another to create four quadrants:

These quadrants represent the four major money classrooms.

Quadrant 1: The Anxious Classroom

Quadrant 2: The Unstable Classroom

Quadrant 3: The Unaware Classroom

Quadrant 4: The Secure Classroom

As we explore each quadrant, you might find yours quickly. That’s great! But don’t skip over the other quadrants. Read about each of them so you can learn how other people in your life grew up. It will help you understand why your spouse handles money the way he does or why your best friend sees money a certain way. You might gain insight into the dynamic your parents have or why the guy you’re dating spends money so freely. Doing so will likely build the empathy you have for the people you love—and lead to better relationships.

As you explore the quadrants in chapters 2 and 3 and reflect on your childhood, ask yourself these questions:

•What did I hear about money growing up?

•What did I see when it came to money?

•What did I experience or feel from my parent or parents regarding money?

This includes your entire childhood from birth until you moved out on your own. Look for the defining moments that shaped you and how you view money. These are formative memories, like my spaghetti dinner night, that taught you something significant about money. I call them Milestone Moments. They will help you connect the dots from your childhood and to your money behaviors as an adult.

Also, if you split time between your mom’s house and your dad’s house growing up or a parent got married at some point, there’s a good chance you experienced more than one quadrant growing up. Keep that in mind as you continue to read.