I learned 5 money lessons from my parents' mistakes, and my family is thriving

My financial journey started long before I was old enough to get a credit card or take out a loan. Whether we like to admit it or not, our upbringing directly affects the way we deal with money and our mindset around it.

People who grew up with frugal parents have a more natural tendency to spend less. On the other hand, people whose parents were nonchalant about spending and saving tend to pick up those habits, too, at least for a part of their lives.

In the early stages of my money journey, I found that I was subconsciously making the same mistakes my parents made. Although they never sat me down and taught me about money, observing our life gave me the impression that this was the normal way to deal with money.

That direction led me to over $100,000 in debt . In paying off this debt and starting my personal frugal journey with my own family, I started noticing that my habits were becoming almost the exact opposite of my parents'.

It was then that I realized all my parents' money mistakes and the ones I've learned to avoid in my own financial life.

Mistake #1: Buying a house when they couldnt afford it

Until this day, my mom still talks about some of the houses we had where she prayed for days that the bank would approve their loan. My parents had no down payment and would later scramble to make ends meet, but nonetheless, they were eager to buy a $65,000 house.

My mom worked in the fashion industry and made very little money. My dad was an author and writer, and was only paid based on completed projects. The pair did not make a steady enough income to purchase a home, yet they desperately wanted one where they could raise their family.

In my own life, I learned that owning a home requires a lot of thought and planning. When my husband and I were getting ready to buy a house, we decided that our family's income had to be at least three times the mortgage payment, and we had to plan ahead for taxes and set aside money for home maintenance costs.

I now know that buying (and affording) a home requires much more than a prayer.

Mistake #2: Never having a budget

There was no such thing as a budget in my home growing up. My parents were constantly putting out financial fires and never actually sat down and talked about money together.

A part of me thinks they avoided making a budget because they knew deep down that all of their spending would definitely exceed their monthly income and I don't think they had the strength to face that fact head on.

Instead, they worked and hoped for the best. And when it was time for the mortgage payment each month, they gathered every penny they could to make the payment. Each month, they were faced with the constant fear that this would be the month that they wouldn't make it and would lose their home.

I can only imagine how stressful that must have been.

A budget could have completely changed their mindset if they had taken the time to draft one.

In my own life, my budget is a key component of how I manage my money and my wealth. I never want to be in fear of losing my home or being in the dark about my ability to make ends meet. I'm meticulous about tracking my spending, and my husband and I save towards specific goals, like travel and family outings.

Mistake #3: They didnt save for retirement

Retirement was the least of my parents' concerns. It was already challenging for them to plan out their month, let alone planning out their future 30 years ahead.

No, my parents never saved a penny toward retirement, unless you count Social Security, which the government takes out automatically.

As a result, today my mom solely depends on her Social Security check. Without it, she can't survive. She stresses about money in her 70s, but could have been living in much better conditions had she just planned ahead.

My mom's current state has taught me that there is definitely a better way, so my husband and I started saving for retirement the first year in our careers.

I don't want to be stressed about money in my 70s. In fact, I do all that I can to not stress about money in my 30s. So I've planned out retirement goals with my husband and, together, we've been working on building wealth each and every month so we can retire early.

Mistake #4: Never talking about money with their kids

I wish there were conversations about money in my house growing up, but sadly all that I learned was through my own experience. Money was almost a taboo subject that we didn't bring up.

When my parents divorced, I only knew that we were below the poverty line because one time my shoes were so worn that I had a hole at the bottom that would wet my sock when it rained.

But I wasn't given the opportunity to ask questions or to understand more about money. I guess they figured I'd learn about it in school or through life.

I wanted to change the story for my own kids. I want my kids to talk openly about money, ask questions, start learning to save and budget. So I started shamelessly talking to them about our budget any chance I got.

While they didn't grasp complicated calculations, they started understanding what it means to spend within our means, to save for the things we want, and to donate to those less fortunate.

Mistake #5: Making minimum payments on their debt

Only about five years ago did my mom finally pay off her debt, and even then it was only due to my constant nagging over the subject. She's well into her 70s and had never thought of becoming debt-free. She had the money and never thought to get rid of her debt. To me, paying all that unnecessary interest was pure absurdity.

So I persuaded her to pay off the debt and, once she did, she instantly felt the peace of mind of eliminating three extra payments a month.

In my own life, I make it a hard rule to always pay my credit card bills in full every single month. I never pay interest and will never have to worry about being in debt again.

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