People often ask me why I became so interested in personal finance when I was only sixteen years old. My first answer? I don’t know. Second answer? I’m a nerd and I can’t help myself. But this really got me to thinking… Why am I so interested in handling my money responsibly? What is it that happened that gave me such an interest?
I have a few thoughts about what happened to change my mind and help me see money so differently:
My Parents Gave Me Real Responsibility
When I turned 14 my parents implemented a financial program with me that they also did with my older brother. (They gave us both an allowance from around the time we turned 5.) Rather than continuing to buy all of my clothing for me, they started giving me the money every month that they would have spent, and I was responsible for making clothing purchases for myself.
In the beginning, my mom and I went through my closet and took an ‘inventory’ of what I had, what I should save for the next year, and what needed to be given to friends or donated. After all of that, we would make a list of things I needed. Maybe another dress or skirt for church or a few casual items. We would also see what shoes I needed for the new season.
She helped me understand how sales and clearance racks work, and I quickly learned how much more I could get for my money by shopping carefully. If I had any money left over then I could purchase the fun things that I wanted. This was the first step toward being more money conscious. It was also at this time that I parted ways with the local mall…too expensive!
Now that I have proven myself to be responsible, mom allows me to make all of the decisions myself.
(And just so you know, my grandparents did the same thing with my mom. Parents are so important but grandparents can have a big impact for good on their grandchildren when it comes to financial smarts. I really admire how careful and frugal my grandparents have been in their life because it has allowed them to be generous to others. Thanks Papa and Mimi!)
Seeing the Effects of Debt and Job Loss in Other Families
Although I was starting to learn how to shop smart and get a lot for my money, I had absolutely no thought toward saving anything. My plans for my money only involved how I was going to spend it. However, as I got a little older I started to see first hand the terrible effects of debt in other families.
We had close family friends that lost their jobs and/or their home and we knew others that were facing huge credit card debt. I got to see what it is like for a family to lose a job and not have any savings and it was frightening to me even as a young teen.
What happened next hits very close to home. My parents told my brother and I that they were getting a divorce. As you can imagine, this was devastating news. Most people know one of the effects of divorce is the toll that it takes on a family in financial terms. Our story is no different and things are not the same for us financially as they once were.
As my mom sought to recover from those effects, she decided to read “The Total Money Makeover” by Dave Ramsey. She had to borrow it from the library and they only had the audio version. At almost sixteen, I was so mad about having to listen to some stupid financial book four days a week on our way to the rock climbing gym!
I can honestly say that listening to the book was one of the best things that could have happened to me. I realize that a number of people – especially other personal finance bloggers – think that Dave Ramsey is
the spawn of Satan, a terrible person, not very smart about personal finance, but he explained things in simple terms that I understood.
He helped me see the importance of saving money and the huge difference that it can make for my future. I am really grateful to him.
No Retirement Plan
The other thing that helped change my mind about money is having a front row seat to what my mom is dealing with since she has no savings for retirement. I am thankful that she has been open and honest with me regarding the things that she would do differently.
Often, parents make the mistake of never talking with their teens about poor choices (or good choices) they have made financially and this is a huge mistake to make in my opinion. My mom has now taken control of her money and is working through those Dave Ramsey ‘baby steps’.
This inspired me and by the end of 2012 I was able to save up my first $1,000.00 for my emergency fund. I am now working on saving money for college, a car and my retirement.
As I have given this some thought it is obvious to me that there have been many things in my life that have brought me to this point. Not all of the experiences have been thrilling, but there is no doubt in my mind that everything has contributed to the change in my thinking towards money.
I am thankful for parents and grandparents who have taught me how to budget, about the joy that comes from giving, and that material things will never bring me real happiness.
Eva Baker is a high school student passionate about preparing for her financial future and helping other teenagers prepare as well. When she isn’t rock climbing at the gym or pinning ideas for her non-existent wedding, she documents her financial journey over at TeensGotCents.com. Find her on Facebook, Google+ and Pinterest!