I used to think of myself as someone who was fairly good about money, considering that I didn’t have much. My credit score is about as high as it could be for someone with no car payment and no mortgage, indicating a stellar history of on-time payments and overall “responsible credit use”…as defined by the credit industry, obviously.
However, recently I’ve come to see that I was not quite as good as I thought I was. I’m not losing sleep over it, exactly, but here are the things I’m going to talk to my godchildren/potential nieces and nephews about, one of these days.
1) My budgeting never included long-term savings. It wasn’t really all that systematic either; I’ve made back of the envelope budgets for my entire adult life, but they only ever projected, at most, a few months out, and I only made them when I had credit card debt to pay off (frequently.) Otherwise I just spent what came in. I knew that I ought to think about retirement savings of course, but that seemed dumb when I had student loans, and until just a few months ago, I’ve always had student loans (although the undergraduate ones were in deferment for quite a while before my parents paid the remainder off with an inheritance they’d received. But by that time I’d racked up some graduate school debt.) I went through periods where I was spending less than I earned, but they were always followed by periods when I ran through everything I’d saved and then some. If I could do it all over again, I’d have figured out IRAs early on and put something, anything, even 5% or 10% of my income, into one.
2) I took out the damn graduate loans. I didn’t really need them; if I was going to go to grad school in the first place, I should have been willing to commit to getting out debt-free, even if that meant living situations I didn’t find thrilling. I think the problem here was that I was valuing immediate gratification and not really thinking about how much clearing a $19,000 debt would impact my first year(s) out of school. I got really lucky in that my first job, even though it only lasted a year, was unusually well-paid. That job saved my a$$, financially, and it was pure dumb luck that I ended up with that and not with any of the much less well paid jobs I’d already been rejected from by the time I got it.
3) Speaking of which, I literally did not research salaries in my field until I was halfway through my graduate program. WTF. This mistake is part of a more general mindset I had through my twenties, namely, “do what you love and as long as you accept that you won’t get rich, don’t worry about the money.” Well, not getting rich is one thing; not being able to afford a basic middle-class lifestyle is another. If I were doing it all over again, I would have invested in some really serious career counseling that would have included budgeting — “ok, teachers make X a month, how do you live on that? accountants make Y, what about that?” — as well as an assessment of my skills and interests. I do, in fact, really like what I do, and I think it is even useful to the world. But maybe I could have chosen a field that would have been something I liked, something useful, *and* not expected me to move halfway across the country at a moment’s notice for a salary that’s less than what most of my students make right after graduation.
4) I didn’t get married to a financially successful person 🙂