This blog was originally posted as “Budgeting 101 with Sarah” on The Newbie Nesters.
I grew up in a lower middle class household with a father who is a church worker (and believe me, the average church worker doesn’t make much money) and a mother who stayed at home until all four of us girls were in school. That means I didn’t grow up with much. I watched friends get Cabbage Patch Dolls and little pink boomboxes and Barbies galore and I had to be happy with my two Barbies and the Barbie pool I received from my young and childless (at the time) aunt and uncle. What little money I did get in the form of an allowance I hoarded like a mini-Scrooge, and from middle school on, any and every job I worked slowly contributed to a growing savings account that rarely, if ever, saw a withdrawal. A natural saver, the first time I ever allowed myself a spending spree was the fall semester of my junior year of college. After months of saving every penny from my job serving tables at a local upscale restaurant (or at least upscale for southwest Michigan), I spent it all traveling around western Europe while attending classes in London. But besides that one semester, I continued to save, only spending what I had and only when necessary, all while watching my boyfriend, and then fiancé, spending slightly more than he was making.
And so in our early 20s a spender married a saver and lived happily ever after. Kind of. It is fair to say that the spender and saver are still happily married in-spite of the money mistakes that we made all through our 20s. Some of those mistakes we made together, some of those we made separately, but both are having a lasting impact in our late 30s.
Unfortunately, when I got married and graduated from college, those saver habits started to change. At my core I was a saver, so every unnecessary penny spent hurt, but I found that buying things could also be fun. Once I had a full time job and some disposable income, I found myself buying things that I didn’t really need. This was especially true of items that I felt I had been robbed of owning all through my childhood. One of those things were collectors items, particularly collector’s edition Barbie dolls, most of which I still own.
To this day I still don’t know a good way to display them and several of them are hiding in a closet in our guest room.
Immediately after we got married I had an apartment to furnish, so I would buy fun decorative items on sale to cover for all the hand-me-down furniture. I needed a new teaching wardrobe so I would buy various clothing items that I really liked, as long as they were on sale. Sales became my friends and I learned the hard way that habitually shopping sales can actually lead to more spending than saving. Over the last fifteen years post-college graduation I don’t know how many unused or barely used items I have donated or sold at garage sales. Now I don’t buy something unless I know exactly how I am going to use it or where it is going to go in our house. While I’m not ready to get rid of all of our books and movies and other items, I am slowly learning that less is more, a lesson that slapped us in the face a year and a half ago when we lived for six weeks in our 30 foot camper. I am also trying to do a better job of spending my hard earned money on a few quality items over many junky items. I relearned that particular difficult lesson this past year when I decided that I needed a much better camera that I could use in my yearbook adviser work. My husband had tried to encourage me to do just that two years ago when I bought our last camera. At the time I was too cheap to buy the SLR camera I desperately wanted so I just bought a nice standard digital camera. So instead of a single purchase two years ago I ended up spending much more money overall, eventually buying the camera I really wanted.
Another 20s financial failure was dining out, way too much. While dining out (or dining in if you’re the take-out type) can also destroy one’s waistline (as it did for us), it also did a number on our budget. But dining out was so easy. For the first three years we were married my husband was working in Michigan, I was working in Illinois, and we were living in Indiana. By the time both of us got home from work we were too exhausted to cook. And that’s ignoring the fact that when we were first married, my cooking skills were embarrassing, to say the least. I once screwed up a box meal. You know, one of those “just add water and mix” meals. When we moved to Indianapolis and we were both living and working in the same city, the situation improved some. We both starting learning how to cook more and I found that I sometimes enjoyed it. But I was also teaching English and directing the high school theatre program at the same time. There were times during the school year when Chinese take-out and wings nights at Buffalo Wild Wings was just way easier. When we moved one more time and I was only working part time, we discovered that it was financially essential to eat at home. In the last seven years since that move we have learned that cooking at home is way more affordable, tastes significantly better (seriously, the only thing we haven’t been able to “perfect” has been certain pasta sauces), and is way healthier. During those rare weeks when we don’t cook much at home, my husband and I both feel gross and more often than not, we regret our decisions. If I could go back and do my early 20s over again, I would force myself to learn how to cook something better than Hamburger Helper.
While eating at home more would have helped our checkbook, we also should have been smarter about where that home was located. This is probably the one area of our finances on which my husband and I still disagree. We spent the first year and a half of marriage living in apartments and then decided, before we were 25, that we were ready for home ownership. At the ripe old age of 24, we bought our first house. Now we both loved our first house. It was a nice starter home, it was fun to paint and decorate, and it allowed us to get our first puppy, but in terms of our finances, we had no idea what we were doing. We bought a house with more property than I think we intended and ended up spending significantly more on property taxes than originally thought. Or maybe we were just ignoring the extra property taxes because we had stars in our eyes. I had fun decorating but didn’t really consider how much money I was spending trying to emulate the interior designers on TLC (before HGTV became the place all things home design). And we stupidly fell for a buyers club pitch thinking that we would be buying so many things for our new house that the club would help us save significant amounts of money, only to discover that it was over $1000 that we would never see again. My husband wouldn’t change a thing about THAT home purchase, but if I could do it over again, I would have found a house to rent before buying, at least to give us a homeownership test run. A complete rundown of our other homeownership issues can be found here. Let’s just say our experience has been a mixed bag.
But all of the above mistakes could have been avoided if we had just learned how to budget when we were in our early 20s. For the first twelve years of our marriage we never knew how much we were spending, living on faith that we wouldn’t bounce a check between deposits. Our debt increased, our spending never decreased, and it was a constant potential for conflict in our marriage. We took a finance class three years ago and while we are far from perfect and still have a lot to work through, we finally learned the why and how of budgeting. Now I regularly use the website You Need a Budget (which has free plans for students) for all my budgeting needs and we are constantly working on a plan for becoming debt free. It isn’t easy, but I wish we had started doing it before we got married. It would have eliminated many a fight and helped us learn the above lessons much sooner. Not only that, but our retirement savings (which are ok but not great) would be significantly better.
No one ever REALLY wants to talk about money, especially when they are young and don’t have much of it, but I would count my lack of financial literacy one of the greatest regrets of my 20s. Do a better job of spending and planning in your 20s and then you’ll be able to really enjoy your 30s and beyond. Trust me. It will be worth it.