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Does the larger societal era from your childhood influence your financial outlook as an adult and beyond into retirement? This question came to mind while I was responding to a comment by bbbobbins on an article I’d posted to The Humble Dollar forum.
For example, my childhood was set against the immediate backdrop of social and civil unrest in my local community in Ireland. This was compounded by the overarching global tension of superpower rivalry during the Cold War, with the specter of nuclear annihilation looming over our young minds. This sharply brings to mind the scary “shelter under the desk” drills during class. Combining this with the local tension, I think it must leave some footprints on your financial mindset.
The “Epistemology of the Bunker” by anthropologist Catherine Lutz found that low-level Cold War childhood trauma could lead to a bunker mentality, prioritizing risk mitigation and building a durable, resilient financial plan, even if it meant forgoing more lucrative but riskier opportunities. A Queen’s University Belfast study on Adverse Childhood Experiences echoes these conclusions.
Numerous studies have highlighted a “Carpe Diem” versus “Saving for a Rainy Day” divergence in personal outlooks on financial thinking. If we combine these different studies and conclusions, we can profile a possible financial mindset for a person who grew up during the high-tension era of the Cold War and the Irish Troubles.
This suggests the likely outcome is a person who saves for a rainy day, prioritizing a resilient financial plan and awareness of risk mitigation with a tendency to forgo risky opportunities and behavior. It sounds familiar; it sounds like me.
This is possibly an example of how macro-level historical events can interact on a personal level to shape personal identity, in this case, a financial one. It challenges the idea that financial decisions are purely rational and highlights the deep psychological roots of our attitudes toward money, risk, and security.
While my experience is unique to a childhood in Cold War Ireland, I feel the underlying theme is universal. It could help in the quest to understand our financial motivations and journeys. Perhaps we are more a product of the era we came of age in than we like to believe.
I think kids become socialized in a couple ways. First at home, being influenced by their parents and siblings. My folks were children of the depression, my dad being especially poor as a kid. I recall him budgeting and saving. He was not at all cheap, but very deliberate regarding the way he spent money. Secondly we learn by outside influences. For me that would have been friends and experiences that my folks had limited control of. Growing up in the 50s and 60s that included TV commercials and the consumerism they promoted.
Lucky for me, my dad had more influence on my behavior than did those commercials. Also, I was never one to worry about what the other kids had.
It’s interesting that my brother developed different money habits. He’s never meant a dollar that he didn’t want to spend; always concerned about how he is perceived by others. We had the same home life, perhaps he was influenced differently by that secondary socialization.
Interesting question Mark. I don’t know how the era one grew up in couldn’t have had an influence, in many different ways. My father used to joke that he was a “child of the depression” Even though he had a career in banking, I think that early experience shaped some of his views on markets and investing.
I have a number of older colleagues who frequently state they are happy that their career spanned a time frame when they could work for a large company (GE), do meaning work that they enjoyed, be well compensated, have good benefits, and retire with a nice pension and retiree medical benefits. I started some 15 years after them, and experienced being sold, merged, sold, merged again several times, and several plant closures with my job moving across country. How my pension managed to survive for 30 years before being frozen is a bit of a miracle.
Yes, of course they do.
My parents came of age during the scarcity of The Great Depression. That certainly affected their financial outlook on life.
My Siblings and I all grew up in the prosperous 1950’s and 1960’s. A college diploma from the 1970’s was an almost guaranteed ticket to a good paying job.
My kids are all millennials and had things pretty good. They all have 401K’s. Some are more ‘frugal’ than others.
Here in the 2020’s with high costs of college and housing and healthcare and… well … seemingly everything. That will certainly affect how my grandchildren see their financial futures.
I remember my parents used to take us to Enniskillen a couple of times a year to shop, and driving through the border checkpoint at night was pretty scary for a young kid. You had to turn your lights off well before the checkpoint, then weave through concrete barriers before stopping, where one soldier would ask questions while another stood to the side with his Armalite rifle pointed in our general direction.
The gloomy economic climate of the late ’70s and the ’80s definitely influenced my financial journey. It’s what drove me to apply for a Green Card and get out (just before the Celtic Tiger!). If you’ve ever seen the movie The Commitments, that was exactly how I remember Dublin when I left in 1990.
When starting off in America, I was very debt-averse. No way did I want to have to go back to Ireland, and I was very careful with my money. Growing up in that economy was definitely a factor in how I deal with money.