These days we refer to financial literacy a lot, but it’s a term that wasn’t around in our grandparents’ day, back in the 40s, 50s, 60s and even the 70s. Why? Because it wasn’t necessary. Folks like our grandparents didn’t need financial literacy — they lived through hardships like the Depression and the War and they build their habits around saving for a rainy day and the belief that they might have to go without.
These are not habits we’ve had to really develop in our generation. In the world my kids are growing up in right now, for example, debt and conspicuous consumption are considered the new normal — we’ve lost our grounding in some of the frugal habits that previous generations were born with.
There’s a term that’s been popping up more and more lately: financial DNA. That’s the way a person fundamentally views money. And we have a very different financial DNA than generations before us. Just look at these four things we do all the time that people rarely did a few decades ago:
1. Throw out food
How many times have you cleaned out your fridge and thrown out uneaten food? Whether it’s leftovers or vegetable scraps, my Grandma always used everything in the fridge. Bones and vegetables went into soup stocks and leftovers were made into lunches and dinners. She also shopped frugally, and stuck to her list of specific items.
2. Updating your wardrobe
Going to the mall for entertainment wasn’t something anyone did fifty years ago. Clothes were bought to last and people fixed holes and sewed on buttons. A torn piece of clothing or a sock with a hole automatically went into the sewing basket to be repaired. Today, we’re used to updating our wardrobe every few months — a very costly habit.
3. Borrow money (except to buy a house)
These days we draw on credit to do just about everything. We even sap the equity in our homes for things like vacations, cottages and fancy renovations. In the 50s and 60s people never borrowed money unless it was to buy a home. Otherwise, people saved for what they wanted and bought it outright. Today, credit is a fact of life and it’s easy to buy now and pay later.
4. Dining out
Fifty years ago people ate out when it was a very special occasion. Today, however, dining out is something we do all the time — takeout and prepared foods are a staple for many of us in our busy lives. While there’s nothing wrong with eating out, it can easily amount to hundreds of dollars a month or more.
So what does your financial DNA look like? Is it in congruence with today’s debt-heavy society, or is it more in accordance with your grandparents’ era? My point here is that how we view money is a matter of perspective — and understanding that can help get us in better financial shape.
Money expert Caroline Cakebread has been writing for Chatelaine.com since 2006. She is a recovering academic and the mother of two small kids. She lives in Toronto where she writes and reads about all things financial. Follow Caroline at Twitter.com/ccakebread.