Managing Money – Sans Parents!

This is a REALLY long post about FB’s question: “What have my parents given me?”

I feel that we 20-somethings who had parents who were a little more frugal towards us (whether situational or on principle) are sometimes better equipped to tackle life fresh out of the nest (or fresh out of college if you had the luxury of going right after HS).

Sometimes I feel like ranting on this subject, because there are so many out there who were handed more in life than I was. I came from frugal parents – anything we wanted, we worked for. My mom made us account for all our income and expenses in extra check registers she had stocked up – to this day, I’d struggle to function without a running total of what I have on hand.

My parents did buy my first car. I must admit, it was a piece of crap and when it finally died during my senior year, we upgraded to my Subaru. My parents told me that if I paid the insurance and gas, I could drive to and from school and work. If I graduated with a certain GPA, I’d receive my car as a graduation gift.

As graduation time approached, I started looking at furthering my education. My parents, at the time, didn’t want to cosign on funding that precious education. They took me to seminars on “how to pay for college yourself” wouldn’t help with my FAFSA. I was horrified as my friends were all accepted into colleges, or made their life plans and I was left dreaming of classes at any University. Months before our graduation ceremony, I was accepted into a school about 3 hours from my parents place. I had a measly $500 scholarship, but couldn’t figure out how to pay the other $3600 the school wanted up front for my room, board, meal plan, etc. I hadn’t even chosen my classes. I hadn’t bought any books. What was that entire $3600 for!? I decided then and there that the chances of me paying for college outright were slim with my insurance payments and room and board deadlines. I decided opportunity lie “out west” and so I moved. I had my Subaru and a small chunk in my savings that my mom had made me open. Out west, I enrolled in the school of life.

I stumbled a bit, here and there, in the years after I’d moved. My parents, who hadn’t wanted anything to do with my financial aid for school, finally caved to my pleas for help with student funding. I’m glad they did, because total $3000 I spent via student loans paid for HALF of my associates degree requirements through a local community college. I still sunk myself for books and transportation, but not nearly to the degree I could have. That’s one $3000 check I’m glad I’ve written. If you can swing it, it’s much more affordable to do your preliminary credits through a community college.

Unfortunately the necessity arose to replace my dying vehicle (I can honestly say I drove that car till the wheels fell off!) and to pay rent I ended up picking up a full time job. While I worked corporate retail, I learned the meaning of materialism, and I learned how people racked up more than they were worth in debt. I made some good choices, some mediocre choices, and one very excellent choice to change my direction. I got out of retail (and in doing so, curbed part of a very heinous materialistic streak), I moved to affordable digs, and I made a plan – I sat down and wrote it out by hand. At that time, my mom suggested I create a sheet detailing my assets and liabilities – though I had no idea at the time. That really made me look at where my money went.

Once situated in a sweet (cheap!) little apartment in the south end, I slowly but steadily worked my way through my plan to pay off my car, pay my student loans, and pay off the bit of debt I’d accrued as a casualty of life; meanwhile I put myself through school. I found a way to do so, while still being able to enjoy good meals and good company. I ate on the cheap, planned ahead, and saved what I could while paying bills and more-than-the-minimum on debts. When I had to, I’d work a second job part time to pay something off, so I could reallocate that cash. The fact that I have the cash to pay my tuition outright is a testament to strong planning abilities. I know a lot of people my age who have experienced the push and pull of a dollar like I have, and who have not been able to free themselves from its grip. I know a lot of people who are sunk in student loans, and I secretly rejoice in paying for school myself.

Sometimes I wish my parents had done what every other parent had done and just put me through school (mostly I wish this before and during major exams), but I wonder if I’d have the same appreciation for my education. I wonder, if my mom hadn’t rigorously made us account for our cash as children, would I have been able to pay down my car, get my own place, and find myself in the fantastic financial position I’m in? Instead of making loans, my parents purchase things I need in my kitchen, buy food and gas when they’ve visited and generally coach me on life and how to budget for it. Of course, what worked for me may not work for others. I had to learn lessons as they came… and I’m glad I did!

I wonder if I’d be the awesome adult I am today if my mom and dad hadn’t been who they are. And I shrug and say “Probably not.”

If you’re stuck in some sort of financial wedge, where you feel like your budget doesn’t allow for the good things in life, or if you’re a serious shopaholic and want to find a way to be debt-free and fund your habit, I’d suggest taking a look at Fabulously “Broke” in the City’s site. Get a head start by tracking what you’re spending and find out how to reduce that.