My parents believed that money was a dirty subject and not to be discussed. They taught their children nothing about money management. We all got a big shock when we entered the real world.
I got my first credit account as a freshman in college. A local music store encouraged students to charge their purchases, and I certainly did. I charged and charged until one day I was told “no more” until I paid my debt. I was stunned, even though at some level I must have known it would have to be paid eventually.
At that time (1970s), credit cards were handed out freely to pretty much anyone, including unemployed college students. I got several (still use one I got in 1972). For the next 20 years, I continually spent a little more than I earned, and wound up with $20,000 in credit card debt, with the interest piling up faster than I thought possible.
I realized this could not go on, and I spent the next three years paying off that debt, a very painful process. It helped that almost every day I received an offer to transfer my balance and pay no interest for months. I must have transferred that declining balance at least ten times.
Once I was debt-free, I switched to a rewards card (so I actually make money using a credit card) and now pay any charges in full every month except in emergencies. What keeps me disciplined is the memory of the crushing misery of credit card debt and interest sucking away my income.
I had a fixed weekly allowance. I had to learn Budgeting to make it last the full week. Learned to prioritize what I bought.
Got my student checking account while I attended junior high. My mom taught me to write checks and balance it.
I was twenty when I got my first ATM card. That didn’t go well. I learned that a withdrawal today can bounce a check you wrote last week. Then you get hammered with a fee. Painful lesson. I eventually cut up my ATM card. Instant cash whenever I needed it, was just too tempting.
I waited ten years before I got another ATM card. I was older, less impulsive, and financially wiser. I don’t use the ATM unless I already know my account balance.
Credit Cards are evil in my parents world. My mom hates interest fees. Anything bought with a CC gets paid within 30 days to avoid interest. I typically follow that wise policy.
I once forgot one payment, and that same week, bounced a check (accidentally). From thence I started doing ‘Tripler-nomics’ spreadsheets to make sure I don’t underbudget, nor miss anything. Microsoft Excel has been the sole savior of my financial life.
I’m relatively frugal by nature and I’ve always had enough allowance/scholarship money/salary to satisfy my wants, so I never really learned to follow a budget. It doesn’t seem like it would be that difficult, though.
My parents were like yours, ioioio. I learned the hard way too. It was easier for me simply because I am anti-materialist and never wanted to buy anything ever, and during my youthful footloose years I owned a backpack of clothes and a couple boxes of books and very little else. Then I married a guy who was even more so.
I don’t think he ever borrowed money in his entire life. Everything, even our house, we saved up until we had enough money and then bought it with cash (the two of us built our house ourselves). Frugal doesn’t even describe him.
So that really saved me. Since I had no material aspirations and enjoyed doing without, and he hated buying anything he could make or salvage, we have lived a life completely at odds with the modern world.
As we’ve accrued some wealth, my materialism has blossomed a bit, but his hasn’t.
I have no idea how I learned, it may just be embedded in my genes or something. I’ve always managed to live within my means, no matter what those means were. I’ve never budgeted, just always had an intuitive sense of how much spending my income would support, and how to stay within that and actually save money.
For example, for a couple years out of college, I didn’t know what I wanted to do with my life, and I worked for minimum wage or just above it, and still managed to save money. This was the late 1970s in Hartford, and I was living in a rented room at $25/week, rather than sharing a real apartment, because that was how I could live cheaply.
Or in the mid to late 1980s, when I was an instructor at what’s now Christopher Newport U., getting paid ~$20K/year, I found an apartment complex a couple miles from campus where I could get a 2-bedroom for ~$300/month. By the time I went back to grad school in 1988 to get my doctorate, I had a nice cushion saved up: if you’re making 20K/year, rent’s only $3700/year, and you’re generally fairly frugal, saving isn’t hard.
I remember at one job in between, we were paid every other week. And I remember co-workers saying stuff like, “this month, I get three paychecks!” and thinking, “but the money is still coming in at the same rate. So what?” I guess that matters if you’re cutting it close. But I’ve always thought of my bank account and other savings as a reservoir. I want enough water in the reservoir so that I don’t have to pay attention to when the rains come, and if I have an emergency or an opportunity, there’s water to spare in the reservoir. And I’ve always managed to do that.
At our current house, we started off with a 30-year mortgage, converted to a 15-year mortgage with a lower rate 5 years in, and paid off the 15-year mortgage in 11 years. So either 4 years early or 14 years early, depending on the starting point.
My wife and I have had car loans in the past. And at the end of my M.S. program, I needed to borrow a few hundred bucks to get me from the last T.A. check in April, to my first paycheck from Chris Newport at the end of September, especially with moving and rental deposit, but I paid that off ASAP once I had a paycheck.
I’ve always been a cheap bastard and a bit of a miser by nature, so I had a head start. But even in high school I was reading books on saving and investment strategies. Books like “Wealth Without Risk” (Charles Givens), “Rich Dad Poor Dad” (Robert Kiyosaki) and “The Only Investment Guide You’ll Ever Need” (Andrew Tobias).
I mismanaged a lot of money until I started listening to my wife. I think women in general are much smarter and more practical about managing money. If a man has one in his life who is practical and smart, he should just ask her how to do it.
I’ve never understood the logic behind keeping a credit card balance. I know people who make a monthly cc payment like it’s a utility bill. They never actually pay it off. The finance charges are eating them alive.
I usually pay off my cc every month. Once in awhile a large purchase requires a few payments. I always try to get my balance back to zero within 90 days.
I like American Express because they expect the balance to be paid off every month.
My story is similar to the OP’s except that my parents didn’t think that money was dirty, just that their handling of the household finances should be a closely held secret so that we children could not see their savings and demand that they spend some of it on us (this last bit is surmise, but is the only reason I can think of for their secretiveness).
Like the OP, I was profligate in my 20’s (the 70’s). I used to go to the ATM and get cash advances from my credit card (just about the most moronic thing you can do with your money). I got into debt badly several times, and managed to get out each time due to panic-induced frugality. The last time was in my early 40s when I fell in love with someone who lived in Japan and who had no money to speak of, so I paid for travel expenses back and forth over the course of two years. After we broke up (not for financial reasons, I was emotionally prepared to go on like that for years) I looked at my debt and swore “never again.” Fortunately, this coincided with a series of promotions and raises at work, so I was actually able to pay off that one fairly quickly, and start to actually save money in my 401(k).
So the answer is, I guess, I learned by hard life lessons, and finally allowing my parents’ behavior to model mine instead of letting my short-term desires to run rampant.
My father started out as a rich kid and ended up as a poor kid when his father died and his mother lost everything in the Depression. So I grew up with the attitude that if you can’t afford something you don’t get it.
Never had a car loan, never carry a credit card balance, and our mortgage is tiny compared to the value of our house and we can pay it off if Trump takes away the deduction. (At the moment the money in our investment account is paying much better returns than if we put it into the mortgage.)
But I think it is partially genetic, since one daughter is a lot more frugal than the other one. Though she married a more frugal guy.
I was leaving my 20’s before I had an ATM card and started using credit cards, so I started slow. (I guess I had a gasoline card earlier, but that was pretty limited.)
Spending my 30’s traveling for business ramped up the credit card use and was always late to file expense reports. I paid too much interest in those days by not paying off the balance.
Finally settled down at 40 and bought a house, so I learned the rest fast…
Except for investing, I was 60 before I realized how simple it could be. I spent 25 years either intimidated by the (imagined) complexity or trusting in brokers who really did not have my best interests in front of theirs.
I was cheap. I figured the best thing was not to buy anything I didn’t need and to buy the cheapest version of anything I did. I’m still that way – I see no need to upgrade my phone, since it works just fine for me. I had a B&W TV for years because I didn’t see the need to use anything else. We keep all our appliances until they die. And I always liked to have money in my bank account.
The latter was a big thing. When I was in high school, I’d put money into my savings account and love to see it grow. So I got into the habit of saving at a very young age.
When I started using credit cards, I tried to pay things off each month. There were times when that wasn’t possible (due to unemployment), but I’d always pay 2-3x the minimum payment.
My wife is the same way. If anything, she’s even more reluctant to spend that I am.
For me, it wasn’t learning not to spend more than you have, it was learning to spend wisely and to talk to your creditors when you get in a bind. Put a sawbuck* or two back first, then pay the utilities, car bills and groceries first then put back ten* more and then feel free to dispose of the rest as you see fit.
In my twenties I had it all backwards and wasn’t putting anything away for savings or retirement. On my first 30 day field exercise to the NTC in the army, I ran up $800 in collect calls to my wife. Having a working phone is mandatory in the army if you don’t live in the barracks. It was utterly humiliating having to go to the phone company with my platoon sergeant to work a deal to avoid having my phone turned off, *after * they called my 1SG about it. (I didn’t, couldn’t, pay it all at once and they don’t fool around with E1s who don’t talk to them about past due bills).
That’s when I got my shit together. Now I figure out the bills, including a small amount for entertainment, and the rest gets “lost” in the bank account.
*these amounts are just randomly pulled out of the air
credit cards ARE evil, but sometimes, if used wisely, an necessary evil
