FDs, gold, property and no stocks: Are your parents’ money rules quietly costing you?

You saw how they decided how much to save and how much to spend, whether to take a loan or put money in an FD, whether to buy gold, land or a house, and whether the stock market was worth entering or best avoided.

We aren’t explicitly taught many of these things; we grow up watching them. Gradually, these observations shape our own beliefs about money. Even after we start earning, we continue to follow those same rules.

However, one question is rarely asked: is the approach that worked for your parents right for you, too?

The financial world in which your parents earned and invested was vastly different from today’s. Investment options were limited, market access was difficult, and information was scarce. Today, you have a wide range of choices, from bank deposits to mutual funds, stocks, ETFs, and retirement products.

So, the question isn’t whether your parents’ money habits were right or wrong. The question is whether they remain appropriate for your financial goals today.

We learn money habits at home

Our mindset regarding money begins to form in childhood. If you were always told at home to save first and spend later, you are likely to prioritize saving a portion of your income. If debt was always viewed negatively in your household, you might avoid borrowing money even when necessary. If your parents primarily invested in FDs, gold, or property, those options might seem the safest to you as well.

Protima Dhawan, Director and Unit Head at Anand Rathi Wealth Limited, notes that the influence of parents extends beyond just investments. “Parents have a strong influence on our financial habits like how we save, spend, borrow and invest, as many money habits are learned at home long before we start earning.”

However, not every old habit is a bad one. Adhil Shetty, CEO of BankBazaar, says, “Saving before spending and avoiding expensive borrowing remain useful habits across different financial environments.”

Some financial principles do not change over time, though the methods of applying them might.

Our parents weren’t wrong, but times have changed

It is easy to say that the older generation relied heavily on fixed deposits, gold, and real estate, making their investment strategies outdated. But the picture isn’t quite that simple.

When today’s parents were earning, investment options were limited. Access to the equity market wasn’t easy, and financial information wasn’t as readily available as it is today. For many, bank deposits and real estate were the only options that made sense. Judging their decisions from today’s perspective wouldn’t be entirely fair.

Dhawan makes the same point: investors today have access to a wider range of investment options, digital platforms, and financial information, which is why it is essential to re-evaluate the money habits we have inherited.

This shift is also reflected in the data. According to SEBI’s Investor Survey 2025, here is how Indian households allocate their monthly income:

Category	Share of monthly income
Savings	15%
Investments	9%
Combined savings and investments	~24% (roughly one-fourth)
Investment allocation, households investing in the securities market	17%

The same survey found that households investing in the securities market allocate approximately 57 percent of their investments to securities market products, with the remainder going into fixed-return products. Non-investing households’ portfolios are heavily skewed towards fixed-return products such as standard deposits, recurring deposits, and life insurance.

This does not mean the need for FDs or traditional products has vanished. It simply means investors today have more choices. Keep the habit; the product can change.

How to decide which habits to keep

So, how do you decide which money habits inherited from your parents to keep and which ones to change?

Dhawan’s answer is straightforward: “It is important to understand that simply avoiding our parents’ financial habits just because they are old is not the right approach. Instead, consider whether that habit serves a purpose for you today.”

Shetty frames this using a simple concept: “Separate the principle from the product.”

For instance, your parents taught you to save money every month. That habit remains just as useful today. However, where you invest those savings will depend on your age, income, goals, risk profile and time horizon.

Similarly, maintaining an emergency fund is a sound financial principle. But it is not necessary to hold your retirement savings, accumulated over 20 or 25 years, in the same manner.

Dhawan says, “The key is to inherit the financial discipline, not necessarily the financial products.”

Fixed deposits are safe, but should all your money be in them?

This is where inherited financial habits face their biggest test.

For many, an FD represents safety. The money is in the bank; its value doesn’t fluctuate daily, and you know exactly what you’ll get upon maturity. If the household has always relied on FDs, the next generation might also view them as the safest option.

However, in long-term investing, simply ensuring your capital doesn’t shrink isn’t enough. You also need to consider how much its purchasing power is growing.

Dhawan says, “Being too conservative can also become a financial mistake, particularly when the investment horizon is long.”

Her point hinges on the difference between nominal value and real value. If your Rs 10 lakh grows to Rs 15 lakh over a few years, it doesn’t necessarily mean your wealth has increased in the same proportion; the prices of goods and services have risen during that time as well. That is why inflation cannot be ignored in long-term investments.

Dhawan offers this illustration:

Investment	Starting amount	Value after 15 years
Fixed Deposit	Rs 10 lakh	~Rs 28 lakh
Nifty 50	Rs 10 lakh	~Rs 38 lakh

This is an illustrative comparison by Dhawan; actual returns may vary based on the investment date, index methodology, and product costs. But the point is clear: preserving capital and increasing purchasing power are not the same thing.

Shetty makes a similar distinction: “For an emergency fund or a near-term goal, a deposit may offer the stability and easy access to money you need.”

However, the picture changes over a longer horizon: “Over twenty or thirty years, however, keeping most long-term savings in deposits may mean missing out on investments that have the potential for higher long-term growth.”

The problem isn’t having an FD. The issue arises when the same product is used for every financial goal. An emergency fund and retirement savings are not the same thing.

Suppose you have Rs 10 lakh at the age of 30. If you need this money to buy a house in the next two years, it makes sense to keep a portion of it in relatively stable and liquid investments. However, if this money is for retirement and you do not need to withdraw it for another 25 years, your investment strategy could be different.

That is why the first question shouldn’t be “Should I choose a fixed deposit or a mutual fund?” The first question should be: “What is this money for, and when will I need it?”

Shetty says, “The key is to match your choice of investment to the goal and how long you have to achieve it. Define the goal first, then consider the risk and the time horizon, and only then decide which product is right.”

Is all debt bad?

There is another common belief about money: “Don’t take out a loan. Debt is bad.” This belief has been part of the financial discipline in many families, and there is a strong reason for it.

High-cost consumer debt can rapidly weaken your financial position. An unpaid credit card balance or a high-interest personal loan can become a long-term burden.

But not all debt is the same. A planned loan taken for education or skill development can boost your earning capacity. Dhawan says, “Taking a well-planned loan for education or upskilling can potentially increase earning capacity.”

This doesn’t mean taking a loan is inherently good. It means debt cannot be judged simply as good or bad. You need to consider the purpose of the loan, its cost, how the repayment compares to your income, and whether it will strengthen or weaken your financial position.

Shetty also notes that while it is important to avoid expensive borrowing, different types of debt come with different costs and purposes. Make a habit of avoiding unnecessary debt, but do not view all productive borrowing as wrong.

Is property the safest investment?

This belief is perhaps strongest in India. For many families, wealth is synonymous with property. Buying a home is seen as a form of financial security, while purchasing land is viewed as a long-term investment. When property values appreciate over the years, families feel vindicated in their decision.

However, while the extent of price appreciation matters, the timeframe in which it occurred is equally important.

According to Dhawan, the perception of property as the safest investment often leads to the oversight of liquidity and concentration risks.

Consider a family whose wealth is almost entirely tied up in a house and a plot of land. On paper, their wealth might appear substantial. But if there is a sudden need for funds, can that asset be immediately converted into cash? And if a significant portion of one’s wealth is invested in a single property, can the portfolio truly be considered diversified?

Shetty states, “The belief that property is always the safest investment also deserves a second look.” He notes that selling property quickly can be difficult, and a large amount of capital can get locked into a single asset. Labeling property as the safest investment simply because it is a tangible asset is not sufficient.

Is the stock market gambling?

Many people likely heard this phrase while growing up: “Don’t put your money into the share market.” Perhaps a relative lost money in stocks, or you witnessed a market crash, or someone suffered losses in trading. It is natural for such events to create fear regarding the stock market.

SEBI’s Investor Survey 2025 also categorizes stocks as high-risk, high-return products, and notes that non-investor households’ portfolios lean heavily towards fixed-return products.

However, there is a crucial distinction to be made. Short-term speculation and long-term diversified equity investing are not the same thing. If someone invests in a stock without understanding it and expects quick profits, the risk profile is vastly different from an investor who maintains diversified equity exposure for long-term goals.

Shetty says, “The idea that equities are gambling also needs to be reconsidered.” According to him, this belief overlooks the role equities play in long-term investing. Dhawan also notes that viewing the stock market as gambling fails to recognize the difference between long-term diversified investing and short-term speculation.

This does not mean equity investments are risk-free. Rather, the question is whether you understand the risk and whether taking that risk is appropriate given your goals and time horizon.

Blindly following, or rejecting, everything your parents say can be a mistake

Suppose an investor feels that because their parents always relied on FDs, FDs must be the wrong choice. Consequently, they might put all their savings into equities.

Or, perhaps because their parents never took out loans, they insist on paying cash for every need, even if it means depleting their emergency fund. This is not the right approach either.

Shetty says, “A habit does not need to be changed just because it came from your parents. Decisions should be based on whether a particular habit works for your current financial situation.”

Dhawan puts it directly: “Ultimately, one shouldn’t ask, ‘Where did my parents invest?’ but rather, ‘Would that strategy work for my financial goals today?’”

That is the question every investor should ask when reviewing their portfolio: am I making this investment because it aligns with my goals, or simply because it’s what was always done at home?

Some habits should stay with you forever

This discussion does not mean the financial wisdom of the older generation is useless. Many of those practices remain just as relevant today:

-Spending less than you earn

-Saving regularly

-Maintaining an emergency fund

-Avoiding unnecessary debt

-Prioritizing the family’s financial security

-Preparing in advance for long-term goals

These principles are timeless. Only the way they are implemented might change.

If your parents taught you to save, keep that habit. If they taught you to build an emergency fund, maintain it. If they taught you to avoid high-cost debt, hold onto that lesson. However, the specific investment product they chose isn’t necessarily the right one for you. That is the distinction between financial discipline and a financial product.

How to evaluate your inherited money habits

Before blindly accepting or rejecting any financial belief passed down by your parents, ask yourself:

-Why did my parents adopt this rule?

-Does that same reason still apply to my life today?

-What is my financial goal?

-When will I need this money?

-How will inflation impact this investment?

-What am I missing out on if I choose this product?

-Am I avoiding an investment because it’s unsuitable for me, or because I’ve heard scary things about it since childhood?

-Is this investment appropriate for my risk profile and time horizon?

The answers to these questions can prevent you from simply replicating your parents’ financial strategy.

You inherit more than just money from your parents. You also inherit a mindset regarding money. Retain the discipline inherent in that mindset, but re-evaluate the underlying assumptions as times change. Your parents likely taught you how to save money. Now, it is your responsibility to put that money to work in alignment with your goals.

Disclaimer: The views and opinions expressed by the experts quoted in this article are their own. Investment decisions should be based on an individual’s financial goals, risk profile, investment horizon and liquidity needs. Past returns are not indicative of future performance. Readers should assess their financial situation and seek professional advice, where necessary, before making investment decisions.

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