Call me crazy, but I am a huge nerd when is comes to budgeting and finances. Maybe it would have been a good idea to do something with it for a career, but I’m fine just doing it for fun!
Photo Credit: IFCS.org
Over the years I have had my fair share of financial issues, and I took each one of them as a lesson.
When I was young I would get a weekly allowance of $5 from my Grandpa and $2 from my other Grandpa. My sister and I would often spend our money on toys or candy from the ice cream man “Spike”. One day I had a friend over and had the cutest pink Hello Kitty wallet that I had to show off. I had $17 and was so proud. Needless to say I had none of it when that so called friend left.
Lesson #1- Don’t brag about your money to your friends
I also learned a lot about budgeting from my Grandma growing up. We spent a lot of time with my Grandparents which led to us doing normal, everyday things together as well as fun Grandparent things. I noticed that she would budget her money in envelopes and that always intrigued me. An envelope for groceries, one for fun stuff, one for dry cleaning, one for the car wash etc. I’m not sure that we ever talked about it, but it left a huge impression on me! (Thanks Grandma!) I also made the connection that she budgeted her time- but we can talk about that later!
Lesson #2- Make a budget and stick to it
As I got older I started to do some little jobs to make money, like cleaning the neighbor’s house, babysitting, taking care of people’s pets while they were on vacation, washing cars etc. I always made cash and had no need for a bank account. When the time came for me to get my license I was told that I would need a steady paycheck to pay for car insurance and gas. You can’t have one without the other, said my parents, so I got myself a real job. My first paycheck came and I drove it to the bank and cashed it. They charged me $5 to cash it, even though it was cut from the same bank because I did not have an account. It was a $16 check, so that $11 wasn’t even enough money to get me to work until my next check.
I’m not quite sure why my parents didn’t go with me, or give me any advice, maybe I didn’t tell them? Either way that happened a couple more times before the clerk asked me if I wanted to open an account with them. She let me open a savings account, but not a checking account. That meant I was charged for every withdrawal after 3 per month. That bank was not very helpful and I was young and dumb and let that go on for over a year! Can you believe that? I couldn’t even use my bank card because it wasn’t a debit card. I lived and learned and opened a checking and savings account at a better bank (or so I thought until years later when they screwed me over).
Lesson #3- Educate yourself in banking
After I moved out and started accruing these things called bills, I was eventually offered a credit card. It was a student card from my bank and I saw no harm in getting one. Strangely enough, after 1 application they sent me 2 separate credit cards, one student card and one gold card. Things went pretty well for a couple of years. I opened a store card and then learned that you have to be VERY clear when asking the sales girl to pay off your balance. Sometimes they hear- close my account. That was a little lesson in and of itself.
Sadly, as many people do, I began to use my credit cards and ended up with more bills than I could pay. At 19, this is a tough lesson to learn. I tried to be grown up and in control of things and spent beyond my means. Sometimes it’s the tough lessons in life that mean the most.
Lesson #4- Don’t spend more than you earn
As I said before, you live and you learn. The next lesson came after Joe and I started living together and sharing expenses. It wasn’t as profound as some of the other lessons, but I learned that compromising and sharing a budget is not such an easy task. Especially when you have such different philosophy’s about money. Fortunately we were able to reach an agreement and can communicate about our finances. It has been tested a few times, but we always tell each other what we think and we always listen to each other.
Lesson #5- Practice good communication with your S.O. about money
Perhaps the best lesson I ever learned came from a weekend job that I had while in SLO. I worked at a Real Estate office and made friends with the loan officer. She is so knowledgeable about credit and mortgages. We would sit for hours talking about credit reports and money. I will be forever thankful to her for the wisdom that she imparted on me.
Lesson #6- Educate yourself about credit reports and your FICO score
Throughout the years I have learned some other lessons as well about 401ks, IRAs, and some really cool budgeting tools. I love to read about financial tips and tools.
One of my favorite things to do is to keep a spread sheet with my finances. I’m a sucker for and excel spread sheet.
There is a website that I like that has so many great tools available for free! Such as savings calculators, budgeting tools, and debt tips. I usually prefer to make my own, but these are great for people who don’t have the time to make their own or who don’t know how. thenest.com
I also enjoy using templates from Microsoft Office. They have budget and other tools that you can download for free as well! Surprisingly, Pinterest is also a wonderful source of information. I found one really neat pin that lead to Angie’s blog post about a organizing your bills in a household binder. This girl is so smart! Her blog is called Echoes of Laughter and you can find her binder here.
I’m sure I will have many more financial lessons in my life, but for now I am going to ask you.
Q: What are the most important financial lessons you have learned?