Wanderlust. Travel absolutely requires learning to save. Like a big pile of cash. That means picking up extra shifts and side jobs and resisting temptation and ignoring consumerism somewhat. That’s an invaluable lesson in itself, I think.
The second half is learning to manage that pile of cash while traveling over several months, often in other currencies. This is the ultimate lesson in money management, learning to do it well means you can holiday for months at a time.
The last bit is returning home with $50 to your name and no apartment or job. After a few go rounds it’s a breeze.
These three lessons will serve you well all of your life, in my experience.
(Still traveling, still loving it, never gonna stop!)
Graduate school. I had a fairly small stipend that I would get in quarterly chunks. I had to make sure that I didn’t spend it all before the 3 months were up. If I had two glasses of orange juice in the morning on one day, that meant none the next day. Fortunately, school offers lots of free or very cheap exercise and entertainment options, so that helped.
Ah, orange juice. That was a bone of contention with my roomies. They would never buy it but would drink mine - until I added blue food coloring. They could not drink chartreuse colored OJ!
I learned after getting evicted from my apartment when I was 19.
Since then, I’ve developed two simple rules: 1. Get up and go to work every day to get a paycheck, and 2. Live WELL within my means. Money comes in, goes out at a lesser rate…equals surplus. Easy math.
So I have a middle class income, but live like a rich poor person. If that makes any sense.
My Dad was the opposite of yours. He made sure I understood how the world of money worked.
Dad worked for the U.S. government, so he was paid every two weeks. Each check was cashed, and some of the money went either into the bank or into stock investments. Some of the cash came home, and went into envelopes in his drawer - for the car (gas and repairs), credit card bills, donations to charities, and season tickets for his beloved Baltimore Colts. He rarely used his credit cards, but when he did, he made sure to pay them off within a month or two.
He explained credit cards, how they billed, how he paid, and the interest involved in not paying. He explained how checking accounts work. He explained stocks, bonds, and long term bank certificates.
I made sure I sat each of my 3 kids down and went thru the same explanations with them.
I did get an allowance; it increased as I got older, as did my responsibilities around the house.
By having a weekly allowance with clearly-defined purposes. As I grew, both the allowance and the things it was supposed to cover grew too. My first succesful negotiation for a raise was with Dad at age 14, from 70pta (5pta/year of age) to 75.
I also used to do most of our grocery runs pretty early; that taught me the difference between the lowest price and the lowest acceptable price. It also taught me that some “luxuries” provide more satisfaction for their cost than others and that neither bigger nor more expensive are always better. The best oranges, at least for my family’s taste, tend to be the middle-sized, middle-prized ones
Add some study of simple and compound interest in math class, and again Dad making me find all applicable laws and regulations when I got my first work contract and going over them with me, so I’d understand my duties and benefits, but also how to read documents detailing them: he made sure I knew how to read a contract, which includes how to read a loan contract or the list of fees for a credit card. At one point years later I was able to prove to a very-nice and consciencious HR manager that some benefits her company offered… weren’t, because the amount of fees being charged by the matchable 401K was ridiculously high.
I’m naturally fairly frugal, I’ll save rather than borrow if I possibly can. I think I really learned budgeting when living with a boyfriend who was, and is, dire with money; if he has it, he spends it. A year and a half years living like that, when we couldn’t afford stuff like bread and milk because he’d bought a new computer game ‘because it was on sale’, and I’m not going back there. Watching my brother go crazy with credit and spend the next 5 years paying it off also helped. I have yet to hold a credit card.
Saying that, I have occasionally wound up briefly in debt due to stuff like house moves going over budget then the car needing work before payday, but always within my agreed overdraft. I also have student loans, but UK student loans don’t count towards credit rating, only get paid if you earn over a certain amount, and they’ll get cancelled if you haven’t paid them by a set time (30 years in the current version). They’re debt, but it is a bit different.
I find this incomprehensible…What is so difficult to understand?
There seem to be two separate issues in this thread:
people who don’t understand how interest and service fees add up. (this is logical, and something that needs to be taught).
And 2. : people who don’t understand basic logic. This is what I can’t comprehend.
When I was 8 or 9 years old, I got one shilling a week from my parents. That was enough for, say, 3 candy bars, or one comic and one candy bar.
I’m guessing that maybe one time, the clerk at the cash register told me I didn’t have enough money for both candy bars I wanted, and --bingo–lesson learned for the rest of my life. But I have no recollection of it being a difficult lesson.
Now, for the more complicated stuff, yeah, I’m still learning at age 60-- about management fees and annuity divisors.
But at 19 or 20 I figured out all by myself that paying 18% a month on the credit card balance wasn’t such a good idea.
It didn’t take much thought, actually.
So I suppose that to answer the OP “who taught me”?–it was my parents, and I learned by following their example.
But it was all intuitive, and I never received any specific instruction.
There is also people whose emotional logic beats the shit out of their brains. My mother is very critical of my SiL’s expenditures on clothing, while exhibiting similar patterns herself. Part of the reason my brothers were so happy with my proposal to borrow money from Mom to purchase a flat in Barcelona is that it turned Grandma’s inheritance from a windfall that Mom was likely to be robbed of into an additional source of income which she still spends completely*, but with the whole family getting something out of it and without the risk of someone conning her out of the whole amount.
We’re talking about a woman who was very proud of her savings after several months in the hospital. No hospital bills, no food bills, no opportunity to go shopping, so yeah, she’d “saved”. And promptly dropped it all on a super-fancy vacuum which, as her cleaning lady said “for that price it should be able to take itself out of the closet, clean itself and put itself back. Oh, and cook!”
My parents gave me an allowance at a very young age and allowed me to make money mistakes with it at a young age when the consequences would be minor. They also taught me how to balance a check book, pay bills, and made sure I understood that credit cards are not free money but real money you need to pay down the line (and not that much further down the line).
Bounced a check here and there along the way, but nothing major.
My mother was very good with money. On a meager teacher’s salary, she bought and rented five houses while raising five children. Sending one to medical school. I learned a lot from her. She would always say, “If it is not on sale, you don’t need it”.
In my 30’s, I was in a relationship and we had three children. When I was laid off, it was a crises. Looking for work, worrying about food and rent. It was at that time I realized that lay-offs could be a time of worry or a time of vacation. I began a serious saving program. Saving 10% of everything that came in. When I got a raise, I had it taken out and put in the credit union. And never saw it.
I didn’t learn. I’ve never balanced a checkbook in my life and only look at my bank balance because I go to the bank’s website to pay bills. I just don’t buy much because effort.
We had savings accounts as kids and the rule was half of all money we got as gifts went into the bank. Mom had envelopes in a folder and every payday, she’d divide money into the envelopes for various bills - electric, mortgage, phone, etc. She didn’t tell us the amounts - for whatever reason, it wasn’t something she wanted us to know, but we were well aware of bills and the need to allot money to cover them.
I was also super-frugal - I’d save most of my money, loving to see the account balance go up. I also learned you didn’t buy something till you had the money in hand. Credit cards didn’t seem to be a big thing in the 60s. And when my folks finally got credit cards, they made a big deal about paying off the balance every month.
That’s not to say once I was on my own that I (and later my husband and I) didn’t make bad money decisions, but we eventually got our act together and managed to save a nice chunk for retirement and emergencies. If I could go back, there are several things I’d change, including the first house he and I bought together. But in the end, we did learned.
I was in my late 20s before ATMs were a thing. Before then, if you needed to transfer money from your bank account to your wallet for the weekend, you needed to get to your bank on Saturday morning, and wait in line behind a bunch of other people similarly situated.
And if memory serves, I got my first credit card when I was in my early 30s. If you weren’t renting a car or reserving plane tickets, you could easily get by without them back then. Grocery stores didn’t even take them: cash or check, but no plastic.
Yeah, I think my parents explained some of the more complicated stuff, like how to pay taxes and how retirement accounts work, and they took us to open our first bank accounts, but mostly I felt like it was just common sense: don’t spend more money than you have or charge more money on your credit card than you can pay off in full every month, except in a dire emergency, and try to have enough of a cushion in your bank account that emergencies do not arise. Easier said than done sometimes, especially in grad school, but the basic principle of “if you go into debt you will have to pay interest, and you want to avoid that because it’s like throwing away money” was something I didn’t have any difficulty figuring out on my own.
I don’t remember my parents ever making a big deal about how to manage finances. They’ve always worked, and when dad was laid off (most of my childhood) we were poor but still managed. Then dad went back to the factory and mom started working and they did well as a family.
I worked from the age of 16 up. My brother was horrible with money. My first boyfriend was horrible with money. I started a business at the age of 20 and my business partner was horrible with money. I always supported them and somehow helped them turn their circumstances around. I just have always had money.
Being that I have my own business, I’ve had up and down times (in the past 20 years). I can run lean when I need to and can be modest when I do have money. I’ve had a credit card since I was 18 and use credit wisely.
I did read Suze Orrman’s book “Money Management for the Young, Fabulous and Broke” and I think that gave me a ton of insight that my parents didn’t have to give me.
I guess I just learned by logic and bad examples that came before me.
My Dad and Mom came of age during the Depression and that left both of them frugal and very aware of how to budget. I got an allowance and a savings account when I was young, but it was closely monitored by my parents and any withdrawals were discussed. Mom would clip coupons and go to 3 stores on shopping Friday just to get the lower prices.
Me, I am, like many in this thread, fairly frugal and since I was (1) Single and (2) had a good-paying job for 35 years, I was able to save fairly steadily. Didn’t acquire a house until I was in my 40’s and have paid cash for my last 3 cars, but still don’t mind donating or travelling–but always from money I have, not money that is coming someday.
I was really poor when I left home. I didn’t have much choice but learn to budget and live under my means. I kept that habit to always spend less than i could afford and save more than I should. It got better when I had a good job, but I am so desperate not to be in such poverty as I used to be that I am extra careful
If that makes any sense.