Monday, October 24, 2011

Email: Learn From My Financial Fail

I like your blog -- keep up the good work.  This is exactly the conversation we need to be having.
When I was growing up (I'm 43) we had chores to do, and I received a weekly allowance for doing those chores.  Whether it was taking out the trash, doing dishes, helping with laundry, mowing the lawn or other tasks, I learned a few things:
When your parents tell you to do something, do it.  There are two reasons:  First, because they said so.  Second, it's part of learning concepts such as personal responsibility and hard work.  Also, they are training you to be part of society and, eventually, a parent.  I guess that's three things.  Whatever.
Having a fixed weekly allowance (mine was five dollars; it's probably 20 by now) teaches you about budgets.  If that is your only income, and you have to make it last a week, it forces you to make choices and prioritize your spending habits.  You can either a) spend it all at once and then suffer the rest of the week, b) carefully allocate your precious resource to make it last, or even c) save and accumulate allowance money until you have enough to buy something you really want.  In other words:  BUDGET, SAVE, and LIVE WITHIN YOUR MEANS.
When I got to college, I was fortunate to find a part-time job and make some spare change for living expenses.  I was also fortunate that my parents were able to afford to cover most of my tuition and fees.  The cost of school nearly doubled by the time I graduated, and I understand that costs are way out of control for today's generation of students.  Hence, the massive frustration.  I get it.
While I was attending school, credit card companies would ply their trade nearly every week.  One day I sold my soul to the devil for a bag of M & Ms.  A few weeks later, I received a credit card.  What I didn't receive was a lesson in how to use it ... or NOT use it.  The result was a rapidly escalating pattern of spending on credit that I couldn't afford to pay back.
I'll spare you the rest of my story involving multiple credit cards, low-paying jobs and eventual bankruptcy.  The point is, we need to teach personal responsibility and financial literacy to younger folks so they don't repeat these mistakes.  It's something that parents used to teach their children.  It's a lesson many of the parents forgot themselves, and therefore failed to pass on to their children.
So keep up the conversation, and don't let the haters get you down.