Why I Care About Financial Literacy
As you may know, April is Financial Literacy Month. I was honored when Shannon at The Heavy Purse asked me to participate in her carnival celebrating this month. Today, I’ll tell you why I care about financial literacy and how it has changed my life for the better.
If you are a regular reader, you know that up until a couple of years ago, my husband and I were swimming in debt. We are well educated, productive people. We haven’t had any crazy medical expenses or lost jobs. We simply lived above our means and tried to fill what we lacked emotionally with things. I think we felt entitled to a certain lifestyle because we went to school for a long time and earned good incomes. I also was a workaholic who had become disillusioned with my career path. I believe I spent money to try and make up for the stress and unhappiness I felt at work.
We used to get to the end of the month and be out of money. We brought in plenty, but we spent it faster than it was coming in. I can’t tell you how many times I’ve cried over working myself into oblivion only to see it all go to the credit cards. I seriously thought about quitting it all and getting a job at the animal shelter or as a baggage screener at the airport for a fraction of my current salary. I was already broke, so what difference would it make? After some soul searching, arguing, and finally getting mad at our debt, we were able to make changes and turn our lives around. It took some time. It did get frustrating, and we certainly had setbacks, but I’m happy to say we are now debt free except for our home and rental mortgages. I’ve been able to cut my work schedule to part time, and I actually enjoy what I do again. I remember why I wanted to be an optometrist instead of seeing it as a way to pay the bills.
You don’t have to have a doctorate degree to be financially literate. It’s actually pretty simple, and if you follow a few simple rules, you can change your financial future.
- Write down all of your debts and interest rates.
- Start tracking every penny you spend
- Stop spending money on things you don’t need.
- Find a way to start tacking your debts.
- Allow yourself small rewards to celebrate each debt you pay off.
- Look at every non-necessary purchase and decide if it adds value or happiness to your life. If it doesn’t, you don’t need it.
- Think long term. Where do you want to be in a year, five years, ten years? If your current lifestyle isn’t going to get you there, it’s time to make changes. It also does no good to repay your debts if you run them right back up again.
While becoming financially literate has improved my happiness a million times over, I think the biggest reason that ultimately brought on change was our daughter. We have a 6 year old who is like a sponge. Whether you want to believe it or not, kids notice what their parents do from a very early age. I don’t want her to have to figure it out when she’s in debt and almost 40 years old. I will give her the tools so that being smart financially becomes second nature. My parents never wanted us to worry about money growing up, but I wish we had. It might have saved me from worrying about it as an adult. I also don’t want her to have to take care of us when we get older because we blew all of our money and have no assets other than a closet full of clothes and a fancy vacuum cleaner (yes, I did once finance a vacuum).
Ultimately it’s up to you in choosing to learn and practice financial literacy. They generally don’t teach it in school, and often our parents don’t teach it at home. I care about being financially literate for my sanity and for the legacy I will leave through my daughter. There really are a million reasons to get your financial house in order, and unless you like debt, uncertainty, and sleepless nights, there really is no reason not to.
What makes you care about financial literacy? Did your parents give you great money lessons, or did you figure it out on your own?
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Thanks for participating and sharing your story, Kim. The legacy you leave behind – that’s something I think about frequently. And honestly, it was one of the things that motivated me to start The Heavy Purse. I felt I could make a difference and wanted to share my knowledge, knowing so many people needed help. And there is absolutely no reason to not become financial literate and hundreds of reasons why they should. Thank you for helping people along their journey to financial literacy.
No, thank you for being a good role model and leader in this field.
My parents made sure I opened a savings account and started saving (and later on donating) so I got into the habit. We weren’t deprived growing up :), but we also didn’t buy things we couldn’t afford!
We didn’t either, so I somehow lost that message, but my parents never talked about having a mortgage or how much things cost. I had no clue about most things when I first started out on my own.
I’m glad to hear you have both changed the way you think about money and have gone on to manage it. When I read this “we felt entitled to a certain lifestyle because we went to school for a long time” right away I could think of some people who are like that where I work. It doesn’t matter how much you earn it’s how you save and spend it and that is why personal finance is important to us. We don’t want to spend more than we have but rather would like to save for the pleasures that we desire in life. This is what makes us happy. Keep on going Kim, you are inspiring many!
Thanks Mr. CBB. I’m just trying to be like you!
I became financially literate just before getting married. And now that we have a kid, I’m SUPER excited to teach him the ways 🙂
Thanks for the reminder of how important it is, and how many still need to hear about how finances really work. An honorable mission to be on!
Teaching your kids about money is one of the best gifts you can give him. Parents have a lot of their plates and sometimes the effects of not teaching their kids about money isn’t immediately evident, but there are repercussions. You’ll be a great role model for your son!
I can see your son as a little super pumped up guy getting excited about money and financial stuff!
Having my daughter made me get my financial act together, too! 🙂
It certainly changes your wiring or chemical makeup or something.
I care because I want to be self sufficient and not have to rely on others ever. It’s 1 part pride, 2 parts paranoia, I think.
I think many people consider themselves to be self-sufficient, but don’t realize how heavily their independence depends on their credit cards, which really isn’t being self-sufficient at all. I’m glad there are people like you showing people what true self-sufficiency and independence looks like.
Pride and paranoia are pretty powerful emotions.
I think I learned a lot form my parents, but I was always interested in money. In fact I made a career out of it. I was a CFO of companies for most of my private industry career and then I went into business myself.
I was too interested in spending it for many years. I’m making up for that now.
It sucks when you become financially literate because “you have to,” which is how so many people become financially literate. If we spend more time on educating our young people, who may or may not learn it at home, then I think we’d be in better shape for your future. I mean they teach math, so why not basic personal finance skills!
Amen, Tonya! We take a lot of classes that have little impact on our day-to-day lives, but personal finance skills, which everyone single one of us needs, is no where to be seen. Hopefully those days will be coming to an end soon!
I’m not sure I would have paid much attention, but it does come back pretty easily if you’ve learned it as a kid.
Nice story Kim. My parents provided well for us, but now that I think about it, they didn’t really discuss their financial picture with us. I think if I would have learned about it when I was a teenager, I might have not gone down the same path. I have learned now, but I wish I could have that $50,000 back from the credit card companies.
I kind of feel the same way. My parents never had credit, so maybe they just assumed I never would either or that I’d be smart enough to avoid it. I guess the bar was set a bit high!
I learned two very simple financial rules from my father. 1. If you don’t have the money for it, you can’t buy it (houses and cars are the rare exception). 2. Don’t put out more than you’re brining in. My very first budgets were simple. I got XXX for allowance, and I was not allowed to spend more than that. My father has also been an avid budgeter from way back, so my love for putting numbers on a spreadsheet comes from him. 🙂
Having an avid budgeter for a dad must make it second nature to be organized with your finances. I don’t think my parents tracked things that well. They just didn’t spend a whole lot and never used credit.