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The Millionaire Next Door - Children Repeat Parents Behavior

The Millionaire Next Door - Children Repeat Parents Behavior

October 15, 2021

Financial Experiences Courtesy of You

By Thomas J. Stanley by Sarah S. Fallaw, Ph.D., Director of Research at AMI 

"What we know but sometimes ignore: that our behavior as parents is most likely going to be repeated by our children".  How are your actions or words shaping your child's financial future?

In the Just Say No era of the 1980s, there were several memorable public service announcements (PSAs) that aired. None were perhaps as memorable as the one involving a father and son. The son, upon being asked who taught him to use various types of unspecified drug paraphernalia, replies to his father, “You, all right?! I learned it by watching you!” You can see this PSA today on YouTube; it’s definitely a classic. It highlighted what we know but sometimes ignore: that our behavior as parents is most likely going to be repeated by our children.

How are anti-drug messages related to wealth accumulation? Industrial psychologists recognize that life experiences can predict future behavior: this concept is used in the workplace to help with hiring and promotion. Let’s apply this principle to the kinds of financial experiences we had growing up with a quick Cosmo test.

Which of the following options (a or b) best describes your experiences growing up?    

Budgeting and Accounting     

a.   I recall my parents saying I don’t know how much money we have left or I don’t keep my receipts so I don’t know how much I spent.

b.   I recall watching my parents go through receipts, making note of expenditures, discussing budgets.


a.   My parents ensured I had the latest and greatest in toys, clothes and technology growing up.

b.   I recall asking for something and being told that my parents would have to check the budget OR that I would need to pay for the item myself. This didn’t happen once in a while (perhaps when the neighbors were around), but consistently.


a.   I recall shopping as a recreation growing up. This example rings true: We need to kill some time this afternoon before we go pick up Sis from school. Let’s go to the mall and see what’s new there.

b.   I remember that shopping was a tiresome chore for my parents, something we only did when we had to for food, clothes. My parents made lists and stuck to them adamantly despite the end caps and sales in the store.

It can be enlightening to think about how our past experiences lead to our behavior today, and we should be content in knowing that behavior can change! Regardless of the experiences we had growing up, what kinds of behaviors are we demonstrating to our children? What experiences will lead to children who are interested in and willing to learn about finances? In each example above, we predict it will be those who answered “b” to each question, a prediction based on interviews and surveys with thousands of balance sheet affluent individuals.

So, let us hope that one day your son and/or daughter sends you a picture of a full piggy bank with a caption that says: “Yep, I learned how to save by watching you. Thank you!”