Tuesday, March 4, 2008

What my parents taught me about money

Money is not a subject I find comfortable discussing with people. Oh, I can converse about investments, mutual funds, thrift stores and similar frugal living topics, but to talk actually numbers, ask for a raise or even consider negotiating for money and Frugal pursuit cringes inside. Part of my attitude comes from my parents who did not talk numbers in front of their children so I only had the vaguest sense that money might be tight or not. I cannot blame it all on them, but it took me some time to work up the nerve to ask them to help me with a down payment on my house. My dad said yes and I was grateful, but in the end, I did not need their assistance and was happier for that I think.

My dad is a farmer and my mom kept track of the farming books so they knew they lived on irregular income however regularly the milk check came. Their finances depended on how healthy the cows were, how much milk they gave, how well the weather cooperated, how good the harvest was and how high the prices were when the crops were sold. I never felt deprived (even though I really wanted that fancy dress or that boom box), but I knew that times were tighter than others. Farmers always talk about the crops, the futures prices, the weather and the price of seed, fertilizer and other necessaries--and in the 1980s, whose farm was being auctioned off.

Despite my mom taking care of the books, she never sat me down and told me how to budget. When I earned money, she encouraged me to save. Once I had my first part-time after-school job, she told me to save 2/3 and spend 1/3. I wanted to go to college and she was telling me to save for my education. It ended up I likely saved closer to 50% but you cannot blame a mom for trying and a teen for wanting to buy those teen magazines. However, I did save money and even had a few Certificates of Deposits by the time I graduated high school. These did go to help me pay for college at one of my state's universities.

I was also responsible for buying most of my own clothing. Mom would have a designated amount to spend on clothing, but anything above and beyond that, I would have to pay for. I had hand-me-downs from a couple aunts and also sewed about 50% of my wardrobe in high school so I spent less on clothing than many others especially as name brands were not a high priority.

Since I used the family car, I was charged per mile for usage which included gas, wear and tear, and insurance. My parents were even-handed about this as my brothers and sisters were allowed the car under the same circumstances. It helps a teenager get a better sense about what a car costs even if I did not always like paying Mom and Dad.

My mom also showed me I could do my own taxes. As young as I was, the taxes were straightforward and only required the EZ form. I am pretty sure Mom did some of my taxes when I was in college, but most of my adult life, I have done my own. I was concerned when I made the step into homeownership that my taxes would be so complex, but web sites or software packages make it more approachable.

I thought this post would show how my parents did not help me learn about money, but I see that they gave me a good foundation. However, I had to find the nuts and bolts myself. College I was not wise with money, used a credit card and ended up with debt when I went to graduate school. With a stipend paid monthly, I knew how much money I would receive and distributed money into spending categories accordingly. I paid more for housing as I lived by myself (I was tired of communal living at that point), but took the bus to and from work. The only money I saved during this time was for paying taxes, and I never really got ahead on my credit card bills.

Graduate school was the first time I explicitly wrote down a budget and I continue to have a spending plan to this day. With more income comes more responsibility to keep spending under control and to save well. I also took my first auto loan from First National Mom and Dad and was charged interest until I made my last payment. After graduate school, I also learned to save for a larger ticket item like an Apple computer. It was nice paying off the credit card bill when it came in the mail.

My mom is a practical person with common sense and that has been fostered in me. I still bounce ideas and thoughts off my mom when I am looking for another perspective. My approach to frugality has been multifold: I want to save money, I want to live a greener, more sustainable life and I do not want to throw something away just because it can be. I have grown into a generally responsible adult and while some of this can be attributed to my personality, if my mom and dad did not raise me right, it would be a steeper uphill battle. So thanks Mom and Dad for helping me be a more fiscally responsible person!

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