I’ve Paid For This Twice Already…

The sins of the fathers

Or, how I learned my money management habits (or lack thereof) and some of how I ended up in debt.

For me, I believe that my parents’ attitudes towards money really shaped my own. There are many things that I appreciate in how they handled money in regards to me, and there are some that I don’t appreciate quite so much.

My clearest memory of money and my parents through my childhood was seeing my dad once a month sit down with a handwritten list of the bills and his checkbook and write out checks for everything and mail them out. In fact, until I recently started thinking more deeply about money and finances, I didn’t realize that this is where I got my own bill-paying method from. I may use a computer, but the making a list of the bills and writing checks for them (most in my case, electronically) and sending them out is the way I handle my monthly bills too.

My parents sheltered me from our financial situation to a very great extent. In some ways, I appreciate this, for too many times I observe parents and kids interact in ways that the child feels like they are a financial burden on the parent. And for me, that isn’t how I want my kids to feel. However, on the flip side, it also caused me to have some unrealistic expectations about money, and also, to have *no* clue about money for “the future”, be it retirement or investments. Money was something you got paid and then spent. I had no idea how to make the most of my money or to make my money “work” for me. I grew up a consumer, and I stayed a consumer.

Now, do I expect that my parents should have given me a primer on the stock market and mutual funds and told me have at it? No. But things like “saving” were only ever discussed in the most rudimentary of fashions and “saving” was only ever something you did with a set consumer goal in mind. I don’t blame my parents for this, for I don’t think they knew to teach me, or had the knowledge themselves to pass on.  I started working at 14 and I had well, no expenses, so of my own initiative I saved my money to buy a car. And buy a car I did. I could have bought a serviceable, even nice, used car with my money but instead I bought a new car and financed half of it. Why? Because that is what I thought I should do. Used was… bad, or something. Maybe not bad, but new was definately better. Or so I thought.

Not that that led me directly down a bad path, I made all my payments on time and that car lasted well beyond the amount of time I was making payments. But at 16, I was already learning to live “beyond” my concrete tangible means.  And not saving a penny, for today or for tomorrow.

My parents are working class people. They make a working class wage, and they lived like money was always available, at least as far as we knew. We had wonderful birthdays and christmases filled with all sorts of things my parents could ill afford. I knew we weren’t “rich” but I had no idea how close to the edge my parents were living.

My parents declared bankruptcy when I was a sophomore in college. Until the moment they called me and told me, I had no idea they were in any sort of trouble.

The fact that I knew my parents declared bankruptcy did, in many ways, keep me from getting in a deeper hole than I am in. And, much of my spouse’s and my financial “hole” is student loans, which, without which, we would not have been able to attend college when we did, and student loans were a “good thing”, right? lol

But I learned from my parents that credit cards were a way to buy anything. I didn’t continue completely with the mindset I grew up with, but I did treat my credit cards like money instead of like a loan, in that they were what I used for anything unexpected or unplanned. If something came up unexpected — charge it. Credit cards were my emergency fund. I never understood when people would say they couldn’t afford something like car repairs or something that broke…. in my head, it was just charge it and pay it back later. It was an emergency, after all. And that way of thinking is what got me to where I was in November of 1993. We had a baby on the way and we were barely making the minimum payments on our “emergency” cards, which we had relied heavily on to make ends meet when my spouse was laid off unexpectedly in November of 2002 and it took 6 months for him to find a new job, and I knew something had to give.

By my recollection my spouse and I were about $13000 in credit card debt spread on two different cards. I don’t know the firm #s. I do know from looking at my credit report now, that the Capital One balance was $11177, because I know the high balance listed was from that month.

So my spouse and I took a deep breath, stopped any usage of the credit cards, and started down the road we are on now. We may still be in debt, and a lot of debt if you consider the student loans, but there’s a light at the end of the tunnel.

So what did I learn? What is the moral of this story? I wish I had had more of a concept of what was realistic and what we could afford growing up. I don’t wish that my parents had made me feel like my basic necessities were a burden to them, like food or clothing (within reason) or shelter, but I needed to know that cash was cash, credit was a LOAN, and that when you want something, save for it. And that saving was important just for the sake of saving too, because the future can be completely unexpected.

I did learn that eventually, a trial by fire so to speak. I hope to teach my children to be good stewards of their money. Once I learn how to be one myself.

~J

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