By Madeleine McBride | WomenCo.

Over my lifetime, I have come to recognize that my understanding of personal finance was greatly impacted by the attitudes and practices of my parents. It is impossible to overestimate the influence this lifelong home economics course had on me. My parents truly left their imprint on the psychic money manager toiling inside my head. So let’s talk about spending money.

My father was raised in public housing in the north of England. He graduated from the eighth grade; then he served an apprenticeship as a machinist. The second son and youngest child, he was the first in his family history to learn a highly skilled trade – at the time, the blue-collar equivalent of a college degree. My mother was a ward of the State of New Jersey. Raised mainly in foster homes and later in a convent, she graduated high school, dabbled in cosmetology and, with on-the-job training, became an operator for the telephone company. Her real dream was to get married and raise a family.

When she married, Mom had significant consumer debt. My dad had always worked hard and was a saver. When she told him about her debt, he pulled out a coffee can and placed hundred dollar bills, one after the other, on the table. My mother’s first thought was, “Oh my goodness! I’ve married a bank robber!” It never occurred to her than anyone could honestly earn and save that amount of money. It never occurred to him that there was a better place to keep his money than a coffee can.

My father is a very intelligent man. After a stint in the Royal Navy, during which he saw the world, he gained a solid education by attending evening classes on many subjects all throughout years before he married my mother. He was an extremely skilled technician and made a good hourly wage. However, he repeatedly turned down promotions to management positions at work. His explanation was that he did not want to engage in the political aspects of being a manager in his small but profitable company. He genuinely dreaded the idea of socializing during off-hours with other managers and customers and going on mandatory golf games over the weekend. He felt uncomfortable at the thought of living in that world. For that, and other reasons, he wanted no part of it. I sincerely doubt he spent much time considering the financial benefits of becoming part of management.

His hard work – he always put in at least 65 hours a week – and skill enabled him to provide well for our family. We did not have a lavish existence and we did not have significant savings. There was no discussion of investments in our house. The most sophisticated financial activity that I witnessed was my father’s monthly ritual of balancing the checkbook (to the penny) and watching him do the taxes every year. As a child, I couldn’t have told you a thing about a mutual fund or the stock exchange.

Mom and Dad talked about how to teach my brother and me about money. When I was about eight years old, they decided that I should receive an allowance of 50 cents per week. If I did my chores and behaved well, I received an extra 15 cents as a bonus.

Unlike my next-door neighbor, my parents did not reward good grades with cash. The expectation was that we should do our best in school because it was to our own benefit to do our best academically. I assure you, I did not live up to the expectation. I did not study in high school and pulled A’s and B’s. There is more to it than that but the bottom line is this: As a child, I was not induced to achieve academically.

My weekly allowance brought no specific obligations. Dad called it “spending money.” So that’s what I did with it: I spent it. Unlike my brother, I spent all of my money on candy within thirty minutes of receiving it every Saturday morning.

This pattern with money held true for me into adulthood. I was fortunate to have a successful career and earn a good salary. I married in 1993 and despite my enviable earning power, just as my mother had been, I was burdened by heavy consumer debt. I am both astonished and ashamed to reflect upon that now. I made more than enough money to pay off my debt and save a significant sum but I was reluctant to make a efforts toward those goals. Fortunately, my husband had no such reluctance and, taking temporary control of the checkbook, he paid off the debt within a year. We have been free of consumer debt ever since.

By the time I left my job in early 2006, my husband’s influence had permeated our personal finances. We had no consumer debt, 13 years left on a 15-year mortgage, and significant savings set aside. Left to my own devices, I am embarrassed to say that our financial situation would not have been anywhere near as substantive.

Given what I have learned from my husband, I know that I will always be extremely reluctant to take on any unsecured consumer debt. Our criteria for a purchase are: Do we need it? Do we already have the money? I now see the consumer debt that I accumulated as a single woman as having been more reflective of my search for something to fill an empty spot in my soul than something to fill my house or closet. I wonder how true that is for other people.

When the time came to grant our son an allowance, we were very deliberate in establishing its goals and structure. I hope it instills in him a better understanding of how to handle money than my allowance instilled in me.

For fulfilling regular, age-appropriate responsibilities around the house, he receives $4. Of the $4, 25% goes into his Superman bank, for his college fund. Cleaning the bathrooms and washing his dog’s slobber off both sides of the sliding glass doors are extra tasks and merit an additional $4 in compensation. Formerly, these tasks were performed by our weekly housekeeper. So not only is our son learning to earn and save money, he is also learning to help clean the house – important for a boy, I think. He does receive financial rewards for earning and maintaining good grades, a certain portion of which goes into his college fund. Cash birthday gifts are tallied and a portion goes into his college fund. Our goal is to teach our son to save – a lot earlier than his mother did!

Every year at his birthday, we empty the Superman bank and deposit it into a savings account. It is getting to the point where the savings should be placed into some financial instrument which will generate a higher return, even if it means taking on a little risk. We plan that our son will have some input into that decision. He will learn – with his own money – about CD’s, mutual funds, stocks, bonds, etc. By the time he gets into high school, this kid will know a lot more about personal financial instruments than I did!

With some discretionary counsel from his parents, our son is allowed to make purchases with the money he is not required to save. When we advise regarding a purchase, we explain our rationale in the hope that he will develop a more mature understanding of the elements that ought to be considered when making a purchase. For example: How many weeks did it take you to save that amount of money? How much time do you really play with the toys of that type which you already have? I have even asked him to give me an estimate as to how much time he will play with a toy before he gets tired of it. I don’t expect him to ever admit to me that he has grown tired of something, but if in the privacy of his own thoughts, he realizes that he vastly overestimated the length of time that something would amuse him, I think he will have learned a valuable lesson.

So how about you? How did your parents influence the way you viewed personal finance? How has your partner impacted your financial situation? What do you think about carrying consumer debt? How are you teaching your children about managing money? How are you increasing your own knowledge of personal finance today? If you aren’t doing so, why have you decided that it is not something that you need to do? I am eager to hear your thoughts.

This is a guest post by one of my favorite personal finance bloggers, Frugal Zeitgeist. She spoke with us earlier about her obsession with paying off her mortgage. (If you missed it, here’s Part 1 and Part 2). What does Frugal Zeitgeist think of our current economic events? I asked, and she gave us some thoughtful pointers on facing your fears during a financial storm.

The subprime tsunami finally hit home over the past couple of weeks, and September has been a painful month: 159,000 jobs lost in September alone contributed to an overall unemployment rate of 6.1%. Even more disconcertingly, CNN states that the number of underemployed people (which includes people struggling to get by on smaller salaries than they once had as well as those who have dropped out of the job market altogether) is at its highest rate in fourteen years.

These are scary times, to be sure. For me, the fear factor is compounded by the collapse of historic financial institutions and the government’s struggle to patch together a bailout plan that no one can be sure will really work.

Fears about things we can’t control aren’t stupid, but if you let them form the foundation of your financial decision-making, you’re not doing yourself any good. Instead, it makes more sense to master your fears by facing them head-on. In the middle of a financial crisis, that means looking hard and realistically at your total financial picture and getting things in order. Here are a few places to start getting back to basics:

1. Don’t make any drastic changes based on fear alone

Investing requires putting together a sound asset allocation strategy based on your goals, your comfort level with risk, and your time horizon before retirement. If your asset allocation strategy worked for you before the crisis, then don’t change it. All you’ll do is lock in your losses for the short term and raise the risk of missing out on the recovery when it comes. . . and yes, eventually the economy will recover.

But what if my asset allocation strategy isn’t working for me?

If your asset allocation strategy is out of whack with where it should be (for example, if you’re fully invested in stocks and only a few years from retirement), then you need to make some changes. You may want to take a loss and move into safer investments, but you should plan on balancing out your losses another way. For some people, that might mean taking on a second job in your spare time, or even postponing retirement for a few years.

2. Pay down debt

If you have credit card debt, this is the time to get rid of it. With the credit crunch in full swing, you can expect higher interest rates, lower credit limits, or both; many people are already feeling the pinch. Even without the crisis, there is no consumer bargain that’s so good that it makes sense to pay for it over months or years. The aggregate cost of doing so is simply astronomical.

Cutting debt off at the knees means belt-tightening. For some people, it’ll mean a whole heck of a lot, which leads to . . .

3. Rein in your spending

Paying off debt means not only getting rid of what debt you have, but also making sure that you don’t incur any new debt. This means understanding the difference between wants and needs, and structuring your behavior accordingly. In some cases, that means putting off major purchases and socking the money away in savings. You can also take it as step further by assessing your needs and figuring out creative ways to cut the costs. Some easy substitutes include:

–Don’t buy water: take a reusable water bottle with you and fill it with refrigerated tap water. (Bonus: tap water contains fluoride, so it’s better for your teeth anyway!)

–Don’t buy breakfast or lunch: brown-bag it. If you have access to a microwave at work, a really cheap and healthy breakfast is as easy as nuking quick oats for ninety seconds and adding fruit or a dab of honey or peanut butter.

–Don’t toss your holey socks. Darning takes minutes, and unless you take your shoes off in public, no one will ever know.

–Not all professional attire needs to be dry-cleaned. Ironing your own shirts takes a little practice, but once you get the hang of it you can do a week’s worth of shirts in half an hour. Over time, it’ll save you a bundle.

A good mantra that helps me is a saying from the Great Depression: Use it up, wear it out, make it do, or do without.

4. Build up your emergency fund

Most conventional wisdom I’ve heard has said that everyone should have six months’ worth of expenses stored up. In this fiscal environment, I think it would be more prudent to save up a year’s worth. That doesn’t mean that people should stop investing, but paying off consumer debt and kicking up the emergency fund take precedence.

5. Keep your income stream going

If you have a job, do everything you can to keep it, but hedge your bets: keep on the lookout for new opportunties just in case the hammer falls. Networking with your colleagues, friends, and professional organizations is one of the most powerful tools that exists for getting a job or upgrading to a better one. If you’re unemployed, spend as much time as you possibly can looking for a job and networking, but be realistic: if you need to take lower-level temporary work to keep going, don’t let your pride get in the way. If you play your cards right, it could open up opportunities for a completely new career path.

6. Give

No matter how bad you have it, there’s a good chance that someone else is worse off. Helping can take many forms, from making sure that an elderly person has enough to eat to spending a weekend helping out at a food pantry. In tough times, sharing what you have matters more than ever.

Avoiding your fears usually means postponing a reckoning until things are far worse than they could have been, so this is the time to cowboy up and take action. If you want to take care of your future, you must take care of your present.

Thanks, Frugal Zeitgeist! These are excellent tips. Be sure to find more great tips and discussion at Frugal’s personal finance blog.