Growing Up With Money Doesn’t Make You Good With Money

I grew up with money, but I’m bad with money. Right now I’m the kind of bad that has collection agencies calling. The kind of bad that has trashed my credit score. The kind of bad that leaves me feeling like a Rockefeller if I have more than $50 left in my checking by the end of the month—something there hasn’t been a single instance of in my working life so far. The norm: Daily alerts from Chase that I have $3.50 in my account the week before a paycheck. And I have a well-paying job.

I have no excuses. Growing up, my family had money. I half assumed we did, in fact, have a money tree growing out back. My father made the money, a lot of it, and my mother spent it, a lot of it on me: figure skating lessons, summer camps, horseback riding lessons, eventually a horse.

The family money meant I haven’t had the roadblocks to financial health others have. My family paid for my education, gave me money to spend during school. After graduation, I was able to live at home with parents in New York while I looked for a job. When I found one that paid but not enough for rent, I stayed longer, and I even received a generous allowance from my father. He wanted to help me out while I was getting on my feet. I was profoundly grateful, but I squandered the gift.

I saved exactly zero dollars. I managed to blow through all of it—and then some. I maxed out and then ignored statements from one credit card, then two, racking up $2,500 in debt. I try to see a silver lining: If I’d gotten a card pre-credit crunch and actually made payments, the evil overlords might’ve increased my limit to $10K (as they did for many of my friends) and I would end up in a deeper hole. For that I’m thankful for my wrecked score.

My spending was about feelings. I felt like a failure for living at home, and going out to dinner and bars and shopping and taking cabs made me feel like less of a failure. Cabs and dinners and cocktails allowed me to pretend to be one of those very busy and important adults I saw everywhere. Adults spent money, and I was determined to behave like an adult. So I did.

I’d convinced myself I was behaving responsibly by spending with wild abandon. But it made me happy to be able to meet my friends who worked in finance or consulting out for drinks, to buy a few rounds of $15 martinis. It felt like my peers weren’t leaving me quite as far behind. So I kept up with them, and spent all my money. When I finally got a job with a higher salary, the kind of salary where I could get my own place, I still had to ask for help: I needed yet another loan from my family for a security deposit and first month’s rent. I got it, and then I still kept spending. More clothes, more drinks, more dinners, and now rent.

And then, an empty bank account and a trashed credit score before me, I decided to make some changes. Last month, I sat down with my checking and credit card statements and highlighted where most of my money went. The culprits: eating out, ordering in, online shopping. I resolved not to online shop or order in at all for a month, and to keep careful track of every single dollar I spent. And suddenly I began to appreciate the value of a dollar.

Now I’m the friend who insists on waiting 18 minutes for the C train after midnight instead of taking “only a $12 cab home.” It may be awhile before I’m good with money, but I want to be decent, at least.

 

Kate Louis lives in New York.

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15 Comments / Post A Comment

thecoffeestain (#1,483)

Great start. I’d love to hear more from you regarding your financial journey, Kate. Keep on trucking!

boringbunny (#3,260)

This is not the lesson I’m supposed to be taking away, I realize, but I’m kinda impressed that you’re only $2,500 in debt. Seems like you could turn this whole thing around really quickly (maybe not the credit score, but the rest of it).

@boringbunny yeah i’m always tempted to take numbers of these things – because that’s how i read it too, OH THAT’S IT? and it also works the other way, when i read about someone with more debt than i have, it makes me feel like mine AINT NO THING. but more information is better than less information, i think? and it’s also good to be reminded i think, that spending $2500 you don’t have is actually a very stressful deal for many people! and should maybe have been a bigger deal to me (to you?)

@Logan Sachon @boringbunny To put it in perspective, if she made $100 payments without putting anything else on her CC (which is probably way higher than her minimum monthly payment), it would still take 25 months/2+ years to pay this off. (But don’t let that get you down! One day at a time, etc.)

readyornot (#816)

@Logan Sachon @boringbunny And perhaps one of the reasons why it’s only $2500 is because she was able to live with her parents and work a job, they paid her security deposit and last month’s rent, they gave her an allowance during college, etc. But not all situations are directly comparable, is my takeaway. And excellent story.

limenotapple (#1,748)

This is wonderful, and I think a lot of us can relate to it in some way. I made a lot of the same mistakes and my credit suffered for it too, but after a lot of hard work and time, it did get much better. After I paid everything off, I called many of my creditors to see if they would consider taking the bad stuff off my credit report, and to my surprise, some of them did! This was a lovely, honest piece…thanks so much for sharing it.

rorow (#1,665)

i relate to some level, and have a similar amount of debt! this site has helped tremendously, with the check-ins and the goals and the learning about emergency accounts.

i was very proud of myself for taking transit back from EWR yesterday, spending $12.50 instead of $101… even though the commute from the airport took longer than the flight.

I’d be curious to know what, if any, financial lessons your parents taught you growing up? Why do you think you were so ill-prepared for the real world of managing your own finances?

Even Tyrion Lannister mentioned this on “Game of Thrones”

Wilgrims (#1,318)

@KathleenD@twitter Are you sure you don’t mean TallTyrionLannister?

bgprincipessa (#699)

@Wilgrims Ice Town clown.

ThatJenn (#916)

This is a really great piece, and must have been hard to write/put out there publicly.

Good on you for setting out in the right direction! Just remember that if you have setbacks, stressful weeks/months when you fall back into your old pattern for a time, that only means you’re human.

Also, I think this gets at the heart of the financial troubles of my first marriage: “Adults spent money, and I was determined to behave like an adult. So I did.”

swoosiekurt (#3,770)

“My spending was about feelings. I felt like a failure for living at home, and going out to dinner and bars and shopping and taking cabs made me feel like less of a failure. Cabs and dinners and cocktails allowed me to pretend to be one of those very busy and important adults I saw everywhere. Adults spent money, and I was determined to behave like an adult. So I did.”

Augh, this exactly. I was given no financial education from my parents – money was always a private thing, something you don’t talk about in polite society. No education about credit, except “oh you don’t need one” throughout all of college. So now I have total financial anxiety about everything which makes me want to spend more to feel better? Bad, bad cycle.

loquaciousmusic (#3,771)

Several years back, Consumerist did a story on the “Snowball Method” of paying down debt. It’s intriguing, and it looks like the link still works. You can find it here.

On another note, in order to trick myself into saving (and having some fun at the same time), I set up an “Apocalypse Fund” in 2011. I began by consulting the Internet to find out when the world was supposed to end, which, as you recall, was 10/21/11. Then, I set up an automatic savings account through my bank into which I deposited $25 per week. I ended up with about $1,200 in my account by the 21st; when the world didn’t end, I was going to buy myself something nice, but I actually ended up enjoying the saving so much that I pushed the end date on the account to 12/21/12. Then I bought patio furniture, paid down some debt, and still had money left over.

If $25 a week is out of the question, you can set up a smaller transfer. Online banks don’t care, and I guarantee that you won’t miss the cash! I now have part of my paycheck automatically deposited into my “Apocalypse Fund,” and it’s the best way I’ve found to keep myself honest about saving.

Pope Leo IX postulated (in 1514) that the world would end in 2014, so let’s set up our accounts now and save, save, save!

jquick (#3,730)

I hope your parents have learned that they aren’t and haven’t been doing what’s best for you. They need to let their adult, highly educated daughter actually live like an adult, instead of a child.

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