One of the things I have not had to be saddled with in my young adult life is student loan repayments for my wife or me. We both went to state schools, not the fancy private schools that really don’t typically provide much better (statistically) of an education anyway. My wife’s parents paid her tuition all 4 years, and her housing the first 2 years. She got a job to pay her housing otherwise.
I’ve had a lust for learning for as long as I can remember. I taught myself geometry at home while I was learning algebra at school so that I could compete better on the math team in middle school. I began taking accelerated classes in 3rd grade, went to the “gifted” middle school program, was one of 30 kids in my county of 3000 freshmen to be accepted into the math and science program in high school, and went on to get a full academic scholarship to college. It covered tuition, housing, food, books, and a small stipend. I also applied for a couple small ad hoc scholarships that gave me some extra spending money those 4 years.
Side note – I finished 16th in my class and opted to go to a state school with financial aid rather than a private or more prestigious school that I would have to pay for. My parents said 2 things early on: If you get a scholarship to college they’d buy me a car (hey, cheaper for them) and if I didn’t get a scholarship, I’d be going to the local state school. Massive student loans and private/out of state tuition weren’t an option. I am so indebted to my parents for many of the hard lines they drew, knowing what was best for their children despite us not being able to see it at the time.
Anyway, each step of my academic career prepared me for the next. I worked hard in elementary school to test into the middle school program. I really developed my passion for math in middle school and used it to get into the high school program. My success and test scores in high school propelled me to a college scholarship. My work ethic in college, despite the many factors that some adolescents fall victim to, had me graduate with honors and find an engineering job with the federal government – in the midst of the recession when the vast majority of all my graduating classmates couldn’t find work.
I was lucky to be born with a propensity to learn quickly and retain information that allowed me to succeed in school. However, I did not squander that gift and worked hard to use it efficiently and make smart decisions with my future in mind.
My parents instilled values in me that complemented my internal motivation to succeed. They created expectations that told me that anything less than success wouldn’t be tolerated. They even “dangled the carrot” of the new car that really catalyzed my drive (pun intended) to get that scholarship. These actions, both direct and indirect, in our household throughout childhood built the foundation for a solid academic career that got my finances and my net worth started in the positive direction once I became an adult.
One of my earlier posts focused on the ways my parents set my values for frugality, strategic decision making and spending, and saving. When I got money as a kid, I first saved it, then chose to carefully spend it when something was worth buying. When I got money from grandma for birthdays and Christmas, I put that money away for a rainy day rather than going and spending it all the next day. My wife and I still operate that way. Rather than looking at this “extra income” as a source of money to go buy something we don’t need, we simply add that money to our regular financial accounts to fund our next goal or debt payoff.
My parents led by example. When we traveled, we stayed at lower cost hotel chains, or with family and friends. We drove all of our vacations because flying was expensive. We brought our food and ate meals outside of restaurants where possible. Our day to day didn’t involve many restaurants. Feeding a family of 5 adds up quickly when you eat out. We didn’t have video games, a big screen TV, or the highest cable package, as socializing and playing outside is far more important to adolescent development than sitting behind a screen like many kids of the current generation.
As soon as I was old enough to understand, my dad began teaching me about investing. While in high school he helped me buy my first mutual fund (one that I still have, but I’m trying to find the right time to sell now that I realize the horror of high expense ratio funds!). When I went to college, I learned that he had been investing on behalf of my siblings and me for many years, and then gave us the money he’d invested as a gift to get us started in the real world.
Everything I saw, and continue to see, my parents do with any relation to finances or income and expenses is deliberate, and with the future in mind. This has translated to my own daily thinking. It became a habit, became natural. Since these thoughts and weighing of fiscal pros and cons have been part of me for as long as I can remember, it’s easy for me to analyze options on the fly and choose the best decision for my family in the moment. I don’t even have to try.
The one place that I would say I have deviated from my parents is my willingness to turn off the conservative thought process and attack my financial future with more risk and aggressiveness. However, growing up in a household of conservative money management gives me the past experience to draw from that keeps me grounded as I leverage more debt and make choices to expand my net worth as quickly as possible.
Stay tuned for more on the net worth conversation…