My Financial Journey - The Beginning
A summary of events from my teenage years through young adulthood with the purpose of capturing key learning moments.
The Beginning:
I was working from the year I was legally allowed to work. Not because my family needed me to work, but because I wanted to work. Through the hard work of my parents, I was, as Warren Buffet would say, the winner of the “Ovarian Lottery.”
While we were not the “rich” people you see on TV, we definitely were not poor. Despite that, for as long as I could remember, I wanted to work. Maybe it was seeing both of my parents work 10+ hrs every day, or maybe it was the allure of money our consumerism society advertises across all mediums. No matter what it was that motivated me, I wanted a job.
My parents made me wait until I legally could work and made it abundantly clear I should focus on school instead of working. After tons of conversations, it was decided I could work full time during the summer and I would stop working during the school year to focus on school. So it was set, at 14 years old, I got all the paperwork a minor needs to work and found a job.
After I got my first job, before I started my first day of work, my mom wanted to have a conversation with me. As my family didn’t need me to work, she knew I was about to have a lot more expendable cash than I could use. She wanted to tell me a story with a small, but important, lesson.
The story was a memory from her early childhood.
Her father was a farmer and while they could grow the majority of their food, they also relied on their children to work to bring in extra cash for bills/etc. When she was very young, she remembered every time her older brother got paid, he took 1/3rd of his paycheck and gave it to his family for bills. He took 1/3rd of his cash and saved it. Then he took the remaining 1/3rd and spent it as he wanted. My mother ended the story by saying “You know we don’t need you to give us money but you should really think about saving at least 1/3rd of every paycheck.”
At 14, I didn’t care enough to try to understand what she was telling me. Yes, I did what she said and took 1/3rd of every paycheck and put it into the savings account my family had set up for me. But did I understand why I was doing it? Absolutely not.
Then, four years later, on the way home from my first year of College, she tried again. She spent the 7 hour car ride trying to explain Mortgages, 401ks, the stock market, etc. Having lived her adult life through the high inflation of the 80s/90s, raised kids through the tech bubble of 2000 and the 2008 real estate crisis, she knew a few things.
By that point, I had about $10,000 in savings, not including my expendable cash. She knew how much money I had as my parents were joint owners of my accounts and she was now trying to tell me the ways I could use my savings to further grow my financial independence. At 18, just like at 14, I didn't care enough and couldn’t (or wouldn’t) digest the information.
Three years later, by the time I graduated college, every penny of that $10k savings account had been spent. Yes, I continued to work each summer but throughout the school year I stopped working and relied upon that cash to survive. If I had fully understood the lesson my mom was trying to teach me at 14, fully listened to the investing conversation she was trying to have with me when I was becoming an adult, and had taken actionable steps, my life now would be a bit different. But rather than wallow in the past, let's continue to look at my young adult life as a learning example so we can improve ourselves moving forward.
The Present-ish:
Let’s time jump to 2020, the height of the pandemic and beginning of the meme stock era. I essentially grew up on reddit so as the meme-stock subreddits started becoming popular, I saw a lot of the posts and read a lot of the comments. I also was unemployed like most people and the government took months to give me my first unemployment check. When I received my first check, it was thousands of dollars from all the back pay. After months of having nothing and reading about stocks on reddit, now that I had some cash I wanted to invest!
After watching hours of YouTube videos, I built up the courage to ask my dad for advice and he told me the honest truth. “Until you have 3-6 months of savings and a full time job that covers all of your expenses, you should not be investing.” So what did I do? Put that money into savings, find a job, and begin investing?
No, I bought a PC, a chair, a standing desk, took the remaining amount and put that in “savings.” I also didn’t find a job for another year. By the time the summer of 2021 came around, I was broke yet again. Yes I had some nice things but I had no job and no cash.
With the pandemic winding down, and little to no other options, I found a job. Not a good job, but something that would at least give me an income. I was also living at home through the pandemic so I was lucky to have little to no bills. Yet again, armed with this new income source and fragmented knowledge from YouTube videos, I signed up for a 0% APR credit card, and bought a lot of nice things. “There is no interest rate for a year. I’ll be able to pay it back by then” I told myself.
By the winter of 2021, I hated my job. I was working a manual labor job for scraps and not using my brain which always craved to be used. I was still reading about meme-stocks, day traders, and wishing I too could be a millionaire. I bought a few books and I quit my job with no plans. Knowing I at least needed an income, I spent the next month applying everywhere and in less than 2 months, actually found a good position at the beginning of 2022.
Looking to move out of my dad's house and live an “adult” life again, I took the job and made plans to move in with friends 3 months later. I saved for the move, moved, and it was a horrible situation. Great roommates but a horrible community. So we had to move again. With little to no cash on hand, I put more things on that 0% credit card and we moved again. This time we were in a great place physically but I was in a horrible place financially.
Throughout all of this chaos, I was reading the books and watching more videos. Now, I started to understand concepts that before seemed like wizard magic. I also started to take a solid look at my life and thought about conversations from years past.
At this point, mid-2022, I had over $1000 on a credit card that in a few months would have a stupid high interest rate. I had $0 in savings and rarely had extra cash after I paid my bills. Now I knew enough to know, I was fucked. If one small thing happened out of the ordinary. I had no money for emergencies. So going into the summer of 2022, I did what I never wanted to do before - evaluated my finances.
How will I pay off my credit card? How will I build my savings? How will I eventually retire?
The Plan:
I need to pay off my credit card and get my savings together so I don't stress about living my life. I want to invest and grow my wealth but I must tackle the needs first. Credit card is #1 priority and then savings comes second. But before I can do anything, I need to fully break down my ins/outs to figure out why I’m struggling.
After evaluating everything, if I lived minimally for a few months I could pay all my bills, eat food, and contribute $200 a week to my credit card. It took a few months longer to pay off my credit card than expected but by October, right as the interest rate would kick in, I managed to get the balance to $0.
With my new found habit of not touching $200/week, I decided, I’ll redirect all of that money into savings. In the beginning it wasn’t that easy. Having just paid off my credit card I wanted to treat myself. After a few months, I reigned in myself and I began 2023 with $1000 savings!
Yes, I want to spend $3000 to open a Roth IRA with index funds but until I have enough cash to survive for 3 months, I will be patient and not invest. In the meantime, I will work on living below my means and reading as much as I can to further my knowledge.
In Conclusion:
It has now been 14 years since my mom told me the story from her childhood and I fully understand what she was trying to tell me. She wasn’t trying to tell me how to spend my money, she was just trying to help me build habits that will set me up for a successful adult life. Now, I am implementing them in my daily life and just wish my adolescent brain could grasp the concepts my mom was presenting to me.
With the purpose of not letting the lessons I’ve learned (and am continuing to learn) escape me, I am creating this blog to tell my story, record everything I learn throughout the years, and maybe help a few people along the way. If you enjoyed my writing style and want to join me on my journey to financial freedom, I’ll be attempting to post weekly.