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Money Talk

November 9, 2009

money_tree

NPR has been running segments on the program “Marketplace Money” about the lessons we learn as children about money.  Listening to these interviews has started me thinking about what I was taught and not taught about money growing up and how these lessons affect my financial decisions today.

I was raised in a home headed by a single mother without a college degree.  She worked mostly manual labor jobs as I was growing up, sometimes holding 2 jobs at once.  She always drove used cars that frequently refused to start on cold winter mornings.  Our homes were always rented apartments or duplexes.  There was no cable TV or expensive stereos.  We were working class to be sure, but my mother somehow managed to earn enough money to put me through 8 years of private school, entertain me with lots of dinners out and movies, and keep me in the latest Jordache jeans.  Compared to most of my classmates, I actually felt pretty well off.  We only went on one vacation out of town, but it wasn’t like my school chums were jetting off to Paris every summer either.  The bills were always paid and I wasn’t refused anything for lack of money.  Money wasn’t even something I thought about.

My mother has had only one credit card her whole life and that was a Sears card she paid off in full every month.  I always saw her paying with cash.  You’d think that would have taught me something positive but instead it only made me obsessed with the allure of credit cards.  I would see the glamourous people on TV whipping out their MasterCard at a fancy restaurant or to pay for a plane ticket and think that was the lifestyle for me.  Classy, beautiful people paid with credit and that was the kind of person I wanted to be.  I remember making a fake MasterCard for my little wallet when I was about 8 years old.

We had learned how to balance a checkbook in grade school.  I had been earning a weekly allowance for many years for doing household chores.  By the time I was in high school I was earning $20 per week, which, when added to my part time earnings working in restaurants after school, made me feel like a rich woman.  I was able to keep myself nattily dressed and stocked with the latest Love & Rockets albums.  I had a checking account and an ATM card since the age of 16, yet no one had really talked to me about responsible spending, saving, and investing.  I knew enough not to overdraw my account, but that was the extent of my financial acumen.

When I turned 18 the first thing I did before I headed off to college was accept an invitation for an American Express card.  Finally, the glamour of this plastic card was all mine.  My mother never sat me down and talked to me about using a credit card.  I don’t think I even told her I had it, so I can’t exactly blame her for that.

I quickly got into financial trouble once on my own.  The notion that I had to pay back my credit card purchases within 28 days was lost on me.  An even more nebulous concept was that I would someday have to pay back my student loans, so taking out the maximum amount just so I could pay for beer and pizza was probably not the best idea.  By my junior year I was getting collection calls from American Express.  I remember one horrible morning missing class as this evil debt-collector kept me on the telephone demanding the $250 dollars I owed while I sobbed like a little girl.

To this day I still view credit cards as magic money.  I pay all of my bills on time and have excellent credit, but the idea of not purchasing something unless I can pay cash is still somewhat difficult for me to put into practice.  I have fairly hefty balances on all of my accounts.  Recently I closed 3 of my credit lines because they were going to raise the interest rates.  I now have only one credit card that I promised myself I would only use at CostCo and pay off in full each month because it is a CostCo American Express card.  Everywhere else, I am forced to pay with cash for the first time since I was 18.

While my mother was a great money role model, I wish she would have actually talked to me about finances.  I wish someone would have sat me down and taught me the importance of using credit wisely and of saving.  My mother did the best she knew how, to be sure, and I take full responsibility for my choices as an adult, but I wish I didn’t always get whatever I wanted as a child so that I didn’t now have this sense of entitlement and a lack of delayed gratification.  What I have learned is the importance of actually talking to children about money instead of expecting them to learn by osmosis.   I still feel the rush of freedom and power when I use my credit card, but now I fully understand that there is a high price to pay for that few seconds of freedom.

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