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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It definitely doesn’t take a PHD or anything to be successful with money. Heck, the math for personal finance we learned back in grade school, Income – Expenses > 0. The issue is that most people aren’t exposed to it, whether at home or at school. This is unfortunate, but even if it were required in school I don’t know how many people would truly apply it to their lives. Maybe it needs to be a requirement in college since hopefully they would be more mature at that age.
I can’t wait to have kids and pass along all the great information there is. Although since I’m excited about I’ll have to make sure I don’t overwhelm them.
It’s a fine balance. I don’t want to be talking about money so much as to give my daughter a complex, but I do want her to know about everything related to finance: mortgages, interest, loans, etc. Maybe it won’t apply until down the road, but it will at least be familiar.
It’s funny how kids have a way of changing our perspective on many things in life. It’s true we have a huge influence in their lives – more than we probably realize. I can already see how my kids are thinking through their money decisions based on things we have taught them. It’s an awesome thing to see.
My parents never talked about money or taught me anything. Luckily I became interested at personal finance at a pretty young age so I never went into major debt. I will teach my kids about money though and hopefully prepare them to handle money when they become adults.
I think you’re doing a great job!
I care because I don’t want to fear what would happen if we suddenly couldn’t make it. Financial independence is my main goal now.
A great goal indeed!
My parents were always running out of money. I certainly didn’t learn any money skills there! Except for balancing a checkbook, because my mother’s dyslexia made it difficult for her to do it herself.
Maybe you learned what not to do?
My parents didn’t make a lot of money growing up, but they were able to teach me some great financial life lessons because of this. They did an awesome job telling me where they went wrong and where they went right. They always say that they don’t want us to go through the same financial hardships that they went through.
That’s kind of what I hope to do. I hope my mistakes might prevent her from going down the same path.
Kids are absolutely a sponge! My entire relationship with money is based off what my parents taught me and what I observed from their behaviors. I’m certainly going to be going back through and reading some of the posts you mention about getting out of debt. Thanks for sharing your story!
I always say don’t do it if you don’t want it repeated.