Friday, October 5, 2007

A history of me and money

Third grade, roughly: I went on a field trip with five dollars to spend in the gift store. I was wearing Osh Kosh B’Gosh overalls with a pocket in the front, and at some point, I lost my five dollars. I felt sick to my stomach and so sad that I couldn’t buy anything in the gift shop. I think this feeling may have influenced my later aversion to risk.

Ten years old: My first savings account is established with $100. My mother hit a $10,000 jackpot on her first trip to Las Vegas. Most of the money went towards paying bills and everyday expenses, but she took $200 to teach my sister and I how a bank account worked. I prized my little savings account register.

Sixth grade: I had a little white leather coin purse that I took with me to school so I could buy juice at recess. For some reason, I had lots and lots of coins in there, and my friend started calling me Little Miss Moneybags. I was offended at first, but clearly, have grown accustomed to it.

Junior High: Around this time, my mother began listening to The Money Game (now The Dave Ramsey Show) while picking all us kids up from school. We hated it, but had to listen anyway, and many of his teachings really sunk in.

Age 16: My first paying job! I have been working at least one job continuously since then, and at times as many as three. This was also my first experience with being mostly on my own for necessities like toiletries, clothing, and snacks. I went to boarding school for the first time at 16, and I consider this my official “leaving the nest” experience.

Age 18: Now I was seriously on my own. My parents’ deal for college was this: if I went to a Christian university associated with their church, they would pay all tuition and room and board costs. I would be on my own for anything else, and I also had to buy all my own school books. But if I went to a public university or even a private school not associated with their church, they would not help me at all. I really didn’t want to go to this college since I’d planned to major in theater, and they didn’t offer a theater class, much less a major. But even at 18, I could see the smart decision: go to that school (which wasn’t bad) for FREE, or go to a state school and figure out some way to pay for it all on my own at a minimum wage job.

I also developed my first written budget during my freshman or sophomore year, and even though I made some really, really bad budgeting choices through my college years (I wasted thousands—maybe tens of thousands—of dollars traveling to visit a boyfriend I shouldn’t have been dating in the first place), I succeeded at socking some money away and staying out of debt. I also managed to take a ten-day trip to Europe to see my sister, and various spring break trips, mainly to Colorado.

Age 19: My first trip to the casino! It’s sort of a rite of passage in my family, and my grandfather took me to Canada (where the gambling age is 19) to celebrate. I wound up being the only grandchild he ever took, and it meant a lot to me. I hit a $750 jackpot on that trip, which is still the highest I’ve ever hit. I also developed my “save half” rule, which means despite multiple trips to Canada and a trip to Vegas, I’m still ahead. I don’t play to win, I purchase an experience.

Age 20: I bought my first car. I put $1200 in cash on the hood, spent another hundred fixing it up, and then probably three times as much in bumper stickers all over it.

Age 22: Despite my reservations about the school (and my total lack of achieving my parents’ real goal, which was to have me safely married off to a nice Christian doctor boy) I graduated with some fantastic experiences I wouldn’t have had at a larger school (I was editor in chief of the paper—and I was asked to do it by the university officials, for example). I moved to New York City two weeks later with about $3,000 in savings to work at a job which didn’t pay anything more than part of my rent.

Later that same year: I was working at Starbucks and a bookstore, mystery shopping for extra cash but still scrounging for bus change and eating day-old Starbucks sandwiches because I couldn’t afford groceries. I did laundry in the bathtub with shampoo because I didn’t have quarters for the machines. Part of the problem was that I’d blown through most of my savings on a three-week trip to Europe. I hadn’t been planning to stay in New York much longer and had a once in a lifetime chance to travel with my best friend and my sister—so I didn’t see any reason to keep saving the money. Then, of course, I realized I just couldn’t bear going back to live with my parents AND I met someone I was fairly interested in getting to know better, so I started hardcore job hunting. I landed my first “real” job about two weeks before I completely ran out of money and would have had to call my mom asking her to buy me a plane ticket so I could move back home. My first paycheck was dismal and I was thrilled.

Age 23: Got my first credit card—secured because all the companies think it’s bizarre that I’m this old and don’t have debt. I also began dance classes and later was asked to join a troupe and perform…for money!

Age 24: Replaced crappy college desktop computer with laptop, which cost more than my car did. I ended up donating my car (which I’d left behind and my parents never got around to selling) to Habitat for Humanity, where they sold it for so little I couldn’t even get a tax write-off.

Age 25: I moved into the first apartment where my name was on the lease (I’d been in illegal sublets previously). I bought my first piece of adult furniture. I changed industries into my dream job and managed to raise my income a little bit. All this time, I’d been mystery shopping for spare cash, and I cut back dramatically at this point. I also got my first “real” credit card (which I continue to pay off in full every month) and got rid of the secured one, and doubled my cell phone cost when I bought my Palm. The biggest news of all: I fully funded my emergency fund of six months’ worth of expenses. The feeling of security inherent in this is unbelievable (and no, that money will NOT be used for a trip to Europe this time!).

Age 26: Moved again, into a tremendously lovely and expensive apartment. My first experience with a broker’s fee and renting a moving truck. Right after moving in, I realized that for what I was spending to live there with my roommate, I could have my own crappy studio somewhere. The whole point of sharing an apartment is to save money, and we really aren’t. I had my first experience with identity theft, when my mystery shopping debit card number was stolen and used to purchase all sorts of bizarre things on the internet. Two days later, my ebay, paypal, and email accounts were hacked.

And here we are. I continue to use a written budget every month. I have sinking funds in immediate-access and interest-bearing checking accounts, several retirement accounts, and I’ve been tracking my spending since reading Your Money or Your Life a few years ago. (My biggest revelation was that I spend too much money on Dr. Pepper.) I don’t yet have a net worth tracker, but I’m fairly sure I’m worth around $10,000 (so please don’t kill me). I will probably be moving again before the end of the year, or at least before I turn 27 (and hopefully this time decreasing my living costs instead of almost doubling them). I feel quite financially secure, although I don’t have enough “extra” money as I’d like (who does?). For the first time in my life, I will be incurring loan debt this year, as I go back to grad school in January 2008. It looks like I’ll be able to pay the loans off almost immediately or at least by the end of the semester due to my company’s tuition reimbursement plan, but it’s still a very nerve-wracking experience for me. I had also wanted to get Lasik surgery this year, but that’s been pushed off for the indefinite future. Education I will go into debt for, eye sight I won’t (especially as my glasses/contact lens needs are cheap and Mr. Boyfriend thinks my glasses are sexy).

My boyfriend asked me once why I was so interested in money. I couldn’t really give him an answer, and I thought this post my help me come up with one. I think it’s only partly done that—it lists the facts but doesn’t detail the attitudes I grew up with that informed my own understanding of money. I was surprised that my feelings about money began at such a young age, and also to find that a deep interest in personal finance began when I was in my mid teens. I’m quite sure that this is one reason I’ve been able to be financially independent from as young as I was, and that I’m not part of the boomerang generation like so many of my friends are. I grew up around and experienced some extremes relating to money, and I think that makes up a greater portion of my financial ‘philosophy’, for lack of a better term. That, however, is a different post.

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