Studies have shown that most of our financial habits and money decisions that affect our financial health are largely influenced by our upbringing. Your parents largely influence the way you save, spend, or view money.
A quick look at your finances can help reveal your financial health. Your financial health considers your net worth, debt, retirement plans, emergency funds, and several other financial implications.
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Why You Need to Evaluate Your Financial Health
It is not out of place to see a doctor for a physical check-up. In the same way, a routine fiscal check is good for your financial health. It will help you make the necessary economic adjustments.

Here are Three of the Most Popular Ways to Assess your Financial Health
#1. Figuring Out Your Net Worth
Determining your net worth is the first step in assessing where you stand financially. You can do this by adding all your assets and subtracting your liabilities.
Don’t beat yourself up. It’s completely okay to have a negative balance now. The goal is to write it down and work towards increasing your assets.
Action plan
Your net worth serves as a personal measuring tool that should spur you to take action. Focus on increasing your net worth by 5% to 10% every year. Your net worth is personal so remember never to compare yourself with someone else.
#2. Take a Closer Look at Your Income to Debt Ratio
After figuring out your net worth, the next step is to calculate your income-to-debt ratio. Calculating your debt-to-income ratio helps you keep your debt under control.
You can get this by dividing your income by the total amount of debt you have. For example, if your monthly gross income is $6,000 and you have a total debt payment of $2,000, your debt-to-income ratio is 30%.
Action plan
A high debt to income ratio means you need to exercise caution. Experts advise you keep the ratio to 20% or lower. You could pick on a side hustle or take on another job to help you pay up your debts. But most importantly, work on reducing your expenditure.
Identifying how you were raised could help you put things in perspective and set you on track for the future.
#3. Take Budgeting Seriously
If you aren’t tracking where your money is going, you need to start now. It is not enough to save. Make sure you know where every single penny comes from and goes to.
Action plan
Create a budget and stick to it. This might seem time-consuming, but there are lots of platforms offering automated solutions.
3 Common Financial Upbringings | How They Affect Your Money Habits as an Adult
After evaluating your financial health, it is important to consider your financial upbringing. Growing up, it is natural to look up to your parents and immediate family and want to be like them.
So, it is not unusual for you to pick up the money habits of your parents or guardians. It is also possible to be negatively affected by their money habits.
#1. Little Financial Education
Some parents never saw the need to educate their children about financial literacy and good money behavior. This could be because their parents also never taught them.
Effects
Adults who grew up with zero financial education end up not knowing how to strike the right balance. They could develop unhealthy financial habits like overspending and undersaving. Others hoard money and live miserly.
Solution
Seek to acquire financial knowledge. You could enroll in finance courses, read investment books, or enlist the help of a portfolio manager to help you best manage your finances.
32. Frugal Upbringing
A lot of families fall within the low to middle-income bracket. This means prioritizing the family’s needs over luxuries. It’s not uncommon for kids from such homes to have their requests for expensive gadgets denied or replaced with a cheaper alternative.
Effects
If you are from a frugal family, you might splurge on wants rather than needs to compensate for childhood luxuries you never had. You might end up accumulating debts to fund this lifestyle. On the other hand, you could also choose to emulate your parents’ financial discipline.
Solution
Analyze your money habits. Are you embracing unhealthy money habits just to make up for your childhood? If you are, you could draw up a savings and investment goal.
You could also get an accountability coach to keep you in check or join groups of like-minded individuals.
#3. Luxurious Childhood
If you grew up in rich homes, it is easy to emulate your parents’ lavish lifestyle. You even grow up with a sense of entitlement, expecting things to be easily handed to you.
Effects
If you are from a well-to-do upbringing, there is a temptation to live above your means. You might want to match the luxury you enjoyed while living with your parents. If you are not careful, this could you lead you into debt, especially if your financial situation changes.
Solution
Keep a distance from friends and environments that cause you to overspend. Reduce the urge to splurge; rather, Indulge yourself occasionally.
Final Thoughts
Tracing your financial upbringing may help you improve your future. Take a holistic look at how you were raised, identify harmful money habits you have picked up, and work on replacing them with healthy financial habits.
Image Credit: [Thiago Matos]