They don’t teach personal finance in school and I believe most of us have learned about money from a series of trial and error. We also learn about money from our parents, our friends, the neighborhood we grew up in, what school we went to, etc.
Growing up I didn’t know anything about money. I knew that my parents weren’t rich, but I never felt poor. We went to Disneyland sometimes, there was always food and I had a place to sleep. It wasn’t until I started going to other friend’s houses that I realized that other people lived in actual houses, had bigger places, and had more stuff. It didn’t bother me; it just made me realize what I had (or didn’t have). It’s interesting that you can go along in a bubble for so long and that once you taste the bittersweet acidity of envy, you start comparing yourself to others.
Not until I started comparing myself to others, did I have a faint understanding of money and its power in society. When I was 13, I decided to sell my parents CD’s (unbeknownst to them) to the local music store to make a few extra bucks. Needless to say, my parents weren’t very happy about this. However, this was the moment that started my entrepreneurial, hustlin’ spirit. But I was still pretty clueless and just wanted to be cool and hang out with my friends.
At 17, I got my first job working in an office. It was a great first job, and I learned a lot about my financial life. I set up a checking account and direct deposit for the first time. Because it was free, I also decided to set up a savings account. At the time, I was in college, living with my parents and frivolously spent my money. I went to Coffee Bean every day, I went out to eat when I wanted and pierced my ears about 10 times and impulsively pierced my eyebrow. I did things that were fun, without much care for the future.
I didn’t learn about money or save my money, because I didn’t have to.
Although I had recently signed my student loan paperwork, I had no idea in reality what that meant. I was so consumed with adjusting to college life and managing my work schedule that it seemed like a distant thought. I had some good times in college, and my bank account reflected that. Although I was working all throughout college, I didn’t save much until I decided I wanted to study abroad. Studying abroad was the fire that spurred me to action. All of a sudden, going out was less frequent and I was trying to work more hours. My student loans wouldn’t really cover it and it was something that I desperately wanted. I worked for almost a year making minimum wage to save up 5k to study abroad. At the time, it was a big deal. It was the first time in my adult life I wouldn’t be working for a while. It was my first big purchase, my first big risk. And it was totally worth it.
Upon graduating college, I moved out of my parent’s house and moved into an apartment. I grew up and learned the ways of paying rent, putting down a deposit and security. I learned about credit scores and learned mine was just good enough to snag the apartment, even though I had never had a credit card. Part of my financial ignorance did help me in some ways—I never applied for a credit card and you better believe I was getting those offers in the mail like candy at a candy shop. I used to just rip them up and say, that’s what my savings is for and why buy things I can’t afford?
It wasn’t until I got my first career job, was living on my own and started to pay back my student loans did I have a clue about money. I had reached my scary point (at the time it was less than $200 in checking) and I felt like I was always struggling. I decided that I didn’t want to live like that and I wanted to be in control of my finances. I started saving $600 a month and paying my loans comfortably. In retrospect, I wish I would have saved more for graduate school. It was one of those things that I didn’t think was going to happen, so I never prepared for it.
Note: prepare for the best too, not always the worst!
I feel like now, at 28, I am in a much better financial space, at least intellectually. I have deviated from my financial security, but I have a plan and I am making it work. It has been humbling and I have learned to live with less and deal with lifestyle depreciation. I now have an emergency fund with six months of rent, a paltry retirement account (1k—but at least I started!) and I am paying off my debt.
I see some of my friends who consistently overdraw from their accounts, never seem to have enough money even though they don’t have debt and have a full time job, don’t understand how they got into this situation, have no grasp of what their pay/bills/lifestyle look like. Sometimes I want to hold an intervention, but it’s not really my place. Money is still a rather taboo topic, especially when it comes to income and debt. Also, lifestyle is rather personal and people don’t want to be told what to do or how to spend their money, even if they know there is a better way.
It’s amazing how financially illiterate most people are, but completely understandable. It’s not taught in the schools, my parents didn’t teach me about finances and it’s not a topic to discuss with friends. There is no public forum to discuss, learn and grow. I guess that is why I am attracted to personal finance blogs. I am not an expert by any means and at best, I am a work in-progress. I wish I would’ve learned about money sooner and saved more. But hindsight is 20/20.
I am curious. Where did you learn about money? Did you have a wake-up call or an ‘a-ha’ moment?