My Journey into Personal Finance
As a kid, I relied on my dad for everything just as any kid would. I would ask for things but never considered how much it would cost him. He tried to teach me some lesson about money by giving me an allowance but as a kid it never really registered. All I knew is that once a week I would get a few dollars that I could either spend or save.
I remember a time where my dad would suggest that I save the money in an envelope and not touch it. We tried this a few times but I always ended up cashing out when something caught my eye. Eventually I asked him if he could simply deny my requests to cash out and he reluctantly agreed. This went on for a few months and I can imagine how hard it must have been for him to turn down his emotional kid in order to fulfill my request.
Once I wore him down, I cashed out and he didn’t agree to do it again.
As a teen, my wants grew and became more expensive and I still had no consideration for how much it would cost my dad. If my dad is any indication, there are parents who believed that the education system would teach us about personal finance. In reality, I did have one class in all of high school that covered the basics of checking accounts before it was cancelled in the middle of the semester. Suffice it to say, no personal finance was taught in school.
As an adult, my wants grew and became more expensive and I had no consideration for how much debt I could accumulate. I had opened my first credit card and maxed it out. The bank raised the credit limit and I maxed it out again. This pattern repeated another two times before other symptoms began to show. I grew frustrated at trying to find ways to pay for bills but every month I managed to pull a “miracle”. It was a source of constant stress and I didn’t understand why it was happening.
During this time, my dad warned me about accruing debt, but I did not understand why. It seemed that the more primitive part of me that wanted to fulfill my dream of acquiring various things overpowered my ability to think reasonably. In actuality, I was not educated in personal finance.
Many years go by and my fiancée, then girlfriend, starts our first serious discussion about finances. She likes to remind me that when she first asked me about my emergency fund I told her “I can just use my credit card in an emergency.” Her moment of pause and facial expression put me on the defensive. As she dug deeper into how I handled my finances she grew horrified. It’s a testament to her character that she opted to educate me instead of running away.
In the two years after that discussion I learned to love the digital equivalent of the envelope budgeting system, paid off all of my debts, and began to build my nest egg. There was a lot of trial and error in the process, different methodologies explored, and different applications and online services trialed. While I am far better at managing my own money now, the learning process is ongoing.
As an adult, I am now in better financial health than 69% of Americans and in time I aim to improve that statistic.
The journey was painful but it has opened my eyes to the responsibility of having a proper handle on personal finances. Before, I felt like my own little world could end at a moment’s notice and I would end up living with a family member while I recovered. Now, money problems are not really a concern. I still have ways to go before I have money for vacationing, but at the very least I have a stable financial life in case an emergency does happen.