I can vividly remember in the early 90s when my father would often bring his funky camera to every special event we attended. You know, the kind of camera that uses film. If you can recall, one roll of film had a maximum of 36 shots. Once you take a picture, that was it! There was no more room for editing that shot!

Of course, you really had to make the most of the 36 shots. So before clicking the button, you really had to focus the camera properly and ensure that there was adequate lighting. You also needed to pay for every print of the picture since that was the only way you can view them.

Fast forward to the present. Oh my, how technology has changed! Cameras that are built in our cellphones can now allow you to add filters, crop unwanted parts, beautify your image, and so much more!

With the birth and advancement of technology, a lot of changes have occurred.

The same analogy can be used when we consider pieces of money advice from our parents and elders:

what seemed to be good financial moves when they were in their prime years may no longer be valid today.

Money Advice decades ago cannot be entirely applied to our finances these days

To previous generations (our parents and grandparents), it may seem ridiculous to spend the same amount of money for a 30 sq meter space in the city instead of a 1,000 sq meter piece of land.

We know that they want the best for us. But even if they mean well, their practices may not be relevant to today’s situation and even to our own circumstances.

The following are developments that earlier generations may not have noticed as they gradually happened over time.

It may be possible that they didn’t know what indicators to look at to determine how these shifts have occurred and also, what beliefs and practices still make sense and which ones do not.

You may find it hard to change your parents’ or grandparents’ behaviors and attitudes toward money management. But this article may help you understand where they are coming from. It will also allow you to make an informed judgement on which advice to follow and which ones you need to re-evaluate.

Argument No.1: Inflation and Bank Deposits

During times of war, banking systems were basically non-existent so most people would just keep their cash under the bed.

By 1970s, banks became more established, and with increased trading across countries, wealth started to build.

During our grandparents’ and parents’ time (up until the 1990s), savings and time deposit rates were at the highest peak. My mother-in-law would share how she grabbed the opportunity to invest her money in a time deposit with around 18% for 30 or 60 days.

But the 1997 Asian Crisis aggravated it and made a plunge to 12.7%. That was probably why during my banking career in 2012, deposit rates only played around 4 to 8%.

At present, traditional bank rates only offer an abysmal 0.25%- 3%. Inflation rates are close to savings rates, and the only vehicles that can help avoid loss of your purchasing power (due to inflation) are investments.

Argument No.2: Job tenure versus Job Hopping

Our previous generations would proudly acknowledge how a long-term job retention was the equivalent of job security. Yep! 20 years ago, employees often worked for only one company during their lifetime.

Today, if you’ve reached the five-year mark, then you’ve already been around way longer than the average person staying with the same company.

Moreover, occupations have evolved. During our parents’ prime years, stable occupations were prevalent – doctors, lawyers, office clerks, etc.

However, these days, a significant number of people work in creative jobs, risky jobs, entrepreneurship, and self-employment.

What creative jobs do I mean? Try browsing online and see a rise in millenials venturing into freelancing, dropshipping, gaming, live streaming, online coaching.

photo of people doing handshakes

Given the high unemployment rate because of the pandemic, increased entrepreneurship and self-employment may mean two things:

  • People may not benefit from their company’s retirement plans. So this is why they need to prepare and save for retirement themselves.
  • Children may need to rely on parents a little longer as they strive to establish themselves financially.

Argument No. 3: Property Size versus Location

” I wanted to buy an apartment in the city, but my parents were against my decision. Instead, they insisted that I buy a large piece of land outside of town.”

Sounds familiar?

In the 1950s, agriculture was the dominant industry, making landowners part of the wealthy class. The more land you have, the wealthier you became.

Fast forward to the present, the service sector has evolved to become the largest contributor to the global economy. Getting desk jobs in high-rise buildings are now the norm and the aspirations of new graduates.

Sadly, this includes our farmer’s children wanting to move to cities to find jobs that do not require manual labor under the scorching sun.

So with the increase of job seekers in the metropolis, most people will live in cities.

The result is that prices of land and properties become much more valuable since living spaces, offices, and recreational activities surrounding these establishments need to be built.

So a 30 sq m2 space within the city is suddenly the same value, or more than a plot of empty land outside the city.

green grass

Final thoughts from The Thrifty Pinay:

Disclaimer: In no way am I saying that you should discredit every single money advice our grandparents and parents share. Of course, they have our best interest and would want us all to reach the pinnacles of our success.

But through this article, I hope you now understand where they are coming from. I also hope that it will allow you to make an informed decision on which advice to follow and which ones you need to re-evaluate.

Remember, learn to filter all the opinions and financial advice you receive, and at the end of the day, it is up to you to determine what would be the best for you in the future.

By Ameena Rey-Franc

Recognized as one of the Top Finance Blogs in the PH. Ameena Rey-Franc (founder of TTP) is a former Banker and BS Accountancy graduate turned Blogger, Keynote Speaker, and entrepreneur. Currently an RFP delegate, she is also the Author of a book about Financial Resilience and has held seminars for reputable companies like GrabFoodPH, Pru Life UK, VISA, JPMorgan Chase& Co., Paypal, Fundline, Moneymax, and many more. The Thrifty Pinay's mission is to empower women to LEARN, EARN, and be FINANCIALLY-INDEPENDENT no matter what life stage they are in.

2 thoughts on “3 Arguments as to Why Parents’ Money Advice are not entirely applicable today”
  1. Hi Ameena, your brought out valid points in this article. Things these days are drastically different from what they used to be 2 decades back. Hence our strategy needs to be different as well. I barely invest 5% of my income in bank deposits because there’s hardly any gain there.

    1. I agree with you. Thankfully, digital banks have been sprouting with more competitive rates compared to traditional banks. But it’s still nowhere near the high rates our previous gens have experienced. Thanks for commenting though!

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