My Best Financial Lessons

Not all lessons in life come from a teacher in a class­room set­ting. Some of the most impor­tant lessons in life are the ones we learn out­side the class­room. These lessons could be about finances, rela­tion­ships or oth­er mis­cel­la­neous areas.

I find the best lessons come from sim­ply watch­ing oth­er peo­ple and see­ing how things end up for them. This works to my advan­tage because I don’t have to feel the con­se­quences of their actions or the stress that comes along with them.

I’m going to be focus­ing on the finan­cial lessons I’ve learned so far, but it’s safe to say I’ve learned a lot more than just about money.

Lesson One: No Money

I’ve men­tioned often my fam­i­ly was super poor dur­ing my ear­ly child­hood years. Hot­dogs, easy mac, peanut but­ter and jel­ly sand­wich­es, Susque­han­na Hash (a tru­ly amaz­ing com­bo of baked beans, onions, bacon and hash browns) and oth­er cheap fare were the sta­ples of my meals at home. For­tu­nate­ly, I got free break­fast and lunch at school so I got in some more vari­ety than I would’ve oth­er­wise got­ten. Let me tell you, I very rarely com­plain about insti­tu­tion­al­ly cooked food now.

I grew up with the con­stant refrain of “no we can’t afford that”. My mom was super hon­est with us about the mon­ey we did­n’t have. Light up shoes, Beanie Babies, Lisa Frank note­books.… all on the no list. (Also, hel­lo 90’s flashback).

I learned there was­n’t an infi­nite pool of mon­ey for us. What mon­ey we had came from my mom work­ing her butt off to try to get ahead.

I learned I hat­ed being poor. I nev­er want to be that poor again. Hav­ing been close to rock bot­tom at a young age was hon­est­ly bet­ter than hav­ing to expe­ri­ence that lat­er in life when it might’ve bro­ken me.

I learned how to live cheap­ly. This came in handy when my rela­tion­ship with my par­ents went south and I was thrust out into the real world at age 18. I kept an eagle eye on my mon­ey and tried my hard­est to use what lit­tle I did have wise­ly. Hit­ting up garage sales for new to me clothes, dorm acces­sories, and col­lege bed sized sheets saved me hun­dreds of dol­lars at a time when every pen­ny counted.

Lesson Two: Classroom Examples

When I was six, I did­n’t real­ize how big of an impact mov­ing school dis­tricts was going to have on my life. I moved from a meh school to a dis­trict that boast­ed of mul­ti­ple schools reg­u­lar­ly fea­tured in the top schools in the state. My high school, for exam­ple, was #16 in the state my senior year. It does­n’t sound impres­sive until you real­ize we were the only school not in the major met­ro­pol­i­tan area. We got cup­cakes at lunch for all of our hard work.

I’m not sure if being such a great school let the teach­ers have a bit more flex­i­bil­i­ty with their lessons, or if we were a great school because they weren’t giv­ing the stan­dard lessons. A lot of peo­ple can moan about hav­ing to learn the mito­chon­dria was the pow­er­house of the cell but not how the stock mar­ket works or how com­pound inter­est can work against you or for you. I can’t com­plain, because I did.

My fifth grade teacher did a unit that had some­thing to do with some math con­cept. I can’t remem­ber the orig­i­nal intent, but the main focus of the les­son was the stock mar­ket. We all start­ed out with the same “amount” of mon­ey, and then went through the news­pa­per to pick out stocks we want­ed. We learned how they were tiny pieces of pub­lic com­pa­nies and how that helped both the com­pa­ny and the stock hold­er. Heavy stuff for a fifth grad­er, but at that age I was a sponge and soaked it up. This is also the age I attempt­ed to read Anna Karen­i­na because it was worth 75 AR points.

I think we got about $1000 to “buy” stocks with. Most of us picked the very large glob­al cor­po­ra­tion that was head­quar­tered in our town and employed many par­ents. Unfor­tu­nate­ly for us, this was spring of 2002 and most of our stocks tanked. I think only one or two peo­ple in my class end­ed up with more than what we start­ed with. That was an incred­i­bly pow­er­ful les­son to learn at 11 years old. The stock mar­ket could help you out, or it could make your mon­ey van­ish in a poof of smoke. (Sor­ry if that made any of my old­er read­ers feel old. At least we looked it up in the news­pa­per and not Google!)

The sec­ond les­son came from my sixth grade math teacher. We were learn­ing about the var­i­ous kinds of inter­est. For com­pound inter­est, he shared his bat­tle with the cred­it card debt he accrued in col­lege and short­ly after he grad­u­at­ed. Watch­ing those num­bers go up, up, and up despite him pay­ing the min­i­mum pay­ment was sober­ing. I car­ried that knowl­edge with me until I was 18 and could put the lessons to use for myself. I per­haps took the les­son a bit too hard, as it made me avoid get­ting a cred­it card at all until my junior year of col­lege. How­ev­er, I nev­er put more on the card than I had in my bank account and made sure to pay it off well before the due date.

I actu­al­ly wrote an email to my for­mer teacher telling him what an impact his les­son had on me. I haven’t heard back from him (doubt I will either) but I want­ed him to know what he’s teach­ing makes a difference.

Lesson 3: Friends and Family

I’m the youngest of three sis­ters. My mid­dle sis­ter is five years old­er than me, and my old­est sis­ter is ten years old­er than me. That means at any giv­en time I tried to keep up with my mid­dle sis­ter while she was in the process of try­ing to keep up with our oth­er sis­ter. I have a ton of ref­er­ences I get well beyond what most Mil­len­ni­als do sim­ply because my sis­ters were watching/saying stuff appro­pri­ate to their age groups.

That means when I was 12, my mid­dle sis­ter was 17. She strug­gled might­i­ly with try­ing to bal­ance her check­book. Every month it was an all Sat­ur­day chore to get her bank state­ments and reg­is­ter to match up. Watch­ing the painful process (and being suck­ered in to help her) gave me a real­ly good idea of track­ing every pen­ny I spent. Or, at least mak­ing sure I had a nice buffer in my account so I did­n’t have to spend a whole Sat­ur­day inside with my check­book. Not many 12 year olds know how to bal­ance a check­book (espe­cial­ly these days).

I also watched my sis­ter strug­gle to pay for col­lege. She took my par­ents up on their offer to pay for 2 years of com­mu­ni­ty col­lege, but could­n’t pay for col­lege on her own after that and dropped out of school for awhile after that. Our par­ents refused to pro­vide their finan­cials to FAFSA, so she could­n’t get any grants or fed­er­al loans. She was also smart enough to avoid pri­vate loans. This meant she had to wait until she was either a moth­er (not hap­pen­ing) or 24 to be finan­cial­ly inde­pen­dent from our par­ents. She did even­tu­al­ly get to go back and grad­u­ate after she got married.

My par­ents told me I was going to get the same deal in 5 years. This moti­vat­ed me, at age 13, mind you, to start hus­tling so I did­n’t have to wor­ry about pay­ing for col­lege. I stayed in Girl Scouts, did sports, vol­un­teered a ton, was active in my youth group, and joined a few clubs in school. My appli­ca­tion to col­lege looked awe­some, if I do say so myself. Thank­ful­ly I was reward­ed for all my hard work with a full-ride schol­ar­ship for aca­d­e­mics. This came in handy when I was bro­ker than a joke my fresh­man year. It also came in handy when I was able to grad­u­ate with no debt what­so­ev­er and imme­di­ate­ly start sav­ing a good chunk of my paychecks.

I had sev­er­al friends who were one or two years old­er than me strug­gling to find a job, feed them­selves, and pay off their stu­dent loans. This made me moti­vat­ed to do well in my class­es while on schol­ar­ship so I did­n’t lose it. I came close, but per­se­vered in the end.  I also learned how not to spend loan mon­ey (even though I did­n’t have any loan mon­ey). My class­mates were livin it up off cam­pus, eat­ing deliv­ery piz­za often, buy­ing fan­cy elec­tron­ics.….…. and made fun of me for liv­ing in the dorms. I tried to tell them I was going to come out ahead in the long run but they did­n’t lis­ten. Now I watch from afar as they gripe about their stu­dent loan debt and try to start GoFundMe accounts to get peo­ple to help them pay it off.

Lesson 4: Video Games

Grow­ing up, you could find me doing one of 4 things: explor­ing the ravine sys­tem behind my house with my best friend, play­ing “house” with Legos, read­ing a thick book, or play­ing a video game. I played a lot of dif­fer­ent video games on a lot of dif­fer­ent con­soles: Game­boys, com­put­er, Playsta­tion… I dab­bled in a least a lit­tle bit of it. My favorites were the Poké­mon series, Mario Kart style rac­ing games, and Age of Empires.

In Poké­mon games, you earn mon­ey as you fight bat­tles against oth­er train­ers. There are items in the game that get pro­gres­sive­ly more expen­sive as you advance in the game. If I want­ed to be well equipped to take on the Élite Four at the end of the game, I need­ed to very best items and those cost a LOT of mon­ey. So, I learned to save my mon­ey up for the end. I would use the heal­ing cen­ters for free to revive my team instead of using potions and oth­er items. I would bat­tle more than I need­ed to raise more mon­ey. I would also hoard items I came across. I was more like­ly to run out of space in my bag than run out of money.

Age of Empires oper­at­ed in a sim­i­lar vein. You went out and har­vest­ed near­by nat­ur­al resources to turn them into more build­ings, vil­lagers, sol­diers and upgrade pack­ages. If you did­n’t have any wood, you could­n’t build more hous­es to cre­ate more peo­ple. If you did­n’t have enough gold, no upgrades to your armor or weapons. I always sent my peo­ple run­ning around like crazy to ensure I had enough resources to build up a mas­sive army that crushed my ene­mies with no mercy.

I was also enam­ored with a video game we played for a class in mid­dle school. I have no idea what it’s called, but I’d dear­ly love to fig­ure it out. You start­ed off as a char­ac­ter and fol­lowed them through their life. It was like a more involved video game ver­sion of Life. You could choose to help out peo­ple and they’d give you mon­ey lat­er. Doing chores and oth­er work was reward­ed with mon­ey, while shop­ping and out­fit­ting your house cost you mon­ey. My char­ac­ter’s house was always sparse­ly dec­o­rat­ed and all but a few sim­u­la­tions end­ed up with them dying as a hap­py death as 90 year old mil­lion­aires. I asked my for­mer teach­ers if they could remem­ber the name of the video game, but they could­n’t remember 🙁

Lesson 5: Blogs

What kind of post would this be if I did­n’t include the blogs I read all the time!? I would­n’t even be on this super saver path with­out dis­cov­er­ing Mr. Mon­ey Mus­tache in col­lege. Short­ly after that I read Paula Pan­t’s blog Afford Any­thing, and then Jim Collins’ blog and then down the rab­bit hole to the numer­ous FIRE blogs out there. From how to live fru­gal­ly to real estate to how to redo your house with pex plumb­ing to advice on tax­es, there’s a blog out there for every­thing and every­body. Includ­ing this one 🙂

I love to read every­one’s blogs because I learn some­thing each time, I’m enter­tained, and it gives me a dif­fer­ent per­spec­tive on some­thing that I might not have thought of yet. Not to men­tion the won­der­ful sense of com­mu­ni­ty that we’ve been build­ing! Check out this arti­cle for a list of my favorite blogs!

 

As you see, good lessons can be learned from any­where. So the next time your mom yells at you to JUST STOP LYING AROUND AND DO SOMETHING PRODUCTIVE FOR GOODNESS SAKES, you can tell her you’re learn­ing valu­able life lessons. I’m lucky I was exposed to so many dif­fer­ent meth­ods of learn­ing grow­ing up, as I would­n’t be the per­son I am today with­out them. Now, I’m going to go fire up Age of Empires because I real­ized it’s been way too long since I played it! (Age of Empires II: Con­queror’s Expan­sion is still the best one, btw).

What taught you your most valu­able finan­cial les­son? Was it from a classroom?