We’re all impacted by the past. Our likes and dislikes, biases, habits, and so much more are influenced by where we grew up, what generation we belong to, our education, and our family. For most of us, the greatest influence on our character is the nuclear family we grew up with.
What you saw your parents and siblings doing or not doing very likely has had a more significant influence on you than any single teacher, coach, or mentor has had. Yes, those people outside of your immediate family can, on occasion, have a tremendous influence on us for good or bad. Still, most of your subconscious and conscious tendencies come from your family experiences during your childhood and adolescence.
San Diego State Professor Ning Tang investigated the intergenerational influence on financial behavior and wrote a scholarly paper detailing the results of his investigation. He used two studies to link back the financial behavior of 2,250 young adults to their general self-control and their parents' financial behavior during the children’s adolescence. In his paper, he wrote:
“We find evidence of intergenerational consistency in financial behavior between parents and their children.”
In many instances, a parent’s financial acumen is passed down generationally. Parents that carefully lived within the family’s budget each month, reconciled their checkbook, or responsibly monitored their bank balances digitally, and were not impulse buyers have generally passed down those habits to their children.
Much like past generations influence the financial habits of those that follow, the same can be said for a family’s health history’s impact on finances and financial decision-making for future generations.
Our family health history impacts the potential health problems that will affect us, which in turn can have an impact on our financial decision-making. For example, if you had a parent that passed away during your childhood from cancer or heart disease and left you and the other surviving family members in a financial bind, you would very likely be a good candidate to apply for life insurance as an adult. You would probably be motivated not to put your spouse and children in the same financial predicament that your parent did, considering that you too could contract cancer based on your parent having had it.
The National Institute of Health has named ten health problems that run in families; the list includes:
- Alzheimer’s disease
- High blood pressure
- Heart disease
If you have family members who lived with any of these conditions or passed away due to having one, you may have asked yourself, “How likely am I to get that?” as you read this list. You’re much more likely to have thought twice when you thought about your family and their health history and remembered that someone in your family tree had one of these health problems, and your pulse may have quickened if you remembered that multiple family members had the same illness.
How can this impact your financial decision-making? When faced with the facts concerning our family health history, and those facts confirm that it’s not a particularly good history (particularly our parents’), you can’t be faulted for contemplating your mortality. It’s a healthy and natural reaction.
This leads us to evaluate our lifestyle and decide if we are making healthy choices concerning our physical well-being and how those choices can affect our longevity. And when we begin to think about our health and longevity, our thoughts naturally drift to our financial well-being.
Let’s use insurance as an example. As alluded to earlier, you’re much more likely to buy life insurance if a parent passed away from cancer, and you see the value of it if it had a positive impact on your financial well-being as a child.
Similarly, if you have a family history of heart disease and your doctor has told you that you have several risk factors increasing your likelihood of having a heart attack, you would likely be open to purchasing disability income insurance to protect your income in the event of suffering a heart attack.
Cancer insurance and critical illness insurance are two other types of policies that people often purchase because of family health history. Though they may have good major medical health insurance, these two types of policies are popular because they help pay for deductibles, co-insurance costs, and other expenses related to major illnesses.
Knowing your family’s health history can help you identify the potential risks for you and your children. This can help you to take action now to enjoy better health in the future.
Blue Cross Blue Shield of Minnesota offers some helpful tips on creating a family history. They recommend that you talk with family members. Gather as much information as you can about parents, grandparents, aunts and uncles, brothers and sisters, cousins, and children.
Some good questions to ask are:
- Do you have any chronic health conditions?
- Have you had any serious illnesses?
- How old were you when you first developed the condition or illness?
- Did any family members have mental health issues?
- What illnesses did late family members have?
- What was the cause of death?
Once you have the information, you can then:
- Fill information gaps in by getting additional information from public health records, obituaries found in old newspapers, and death certificates.
- Keep your history up-to-date. Keep it in a paper file or on your computer where you can share it and keep it current.
- Share with your doctor. Based on this information, your doctor can better assess your health risks and make sure you’re getting the right medical tests and screenings for early detection.
When it comes to our financial decisions, the past can be our best teacher. It’s to your advantage to know your family health history and use it when doing short-term and long-term planning for your finances. The more information you have at your disposal, the better your decisions will be.
Having grown up in upstate New York, Bob Phillips spent over 15 years in the financial services world and has been making freelance writing contributions to blogs and websites since 2007. He resides in North Texas with his wife and Doberman puppy.
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