Lessons Learned in Financial Literacy

financial literacyMy financial education has come at a very slow pace. I have not been a fast learner. I have failed tests, repeated classes and expressed a general sense of apathy.

It wasn’t that I didn’t want to learn. Initially I never even knew I was supposed to be looking for financial education. No one told me about it. I wasn’t given the tools I needed early on in life. And therefore, in my adult years I simply learned as I went.

The problem with this method is that I learned a large number of lessons incorrectly. This caused me to make repeated mistakes and cost me thousands of dollars.

Lesson 1 – Using coupons helps you save money.

I first began thinking about coupons in my mid-twenties. My money was tight and I needed to stretch it as far as I could. I knew that coupons helped people save money so I decided to start using them. I diligently purchased a paper each Sunday. I cut out only the coupons I knew I’d use. When I went to the grocery store, I bought the items I had coupons for and left thinking I had done well.

Grade: Fail! I never realized that I was not using coupons effectively. In fact it took me a number of years to even realize that I wasn’t hardly saving any money. It’s no surprise that I didn’t use coupons for very long, I wasn’t seeing any results.

Lesson 2 – Extreme couponing, deal seeking and shopping clearance sales.

When I had my first child, I decided to stay at home to raise him, effectively cutting our income in half. After a year of living the way we always lived and struggling financially, I realized that I had to make some changes.

I began to stock pile and became a big time coupon shopper. I bought multiple papers each week, followed deals online and made multiple trips to different stores in the hopes of saving as much money as possible. I spent time online looking for great deals out there and snatched up clearance items for selling on eBay or to use for future gifts. I was being a smart shopper.

Grade: Fail! I wasn’t being smart. I was doing some things correctly but I was also doing them in excess. I would often find great clearance purchases (think Target toy clearance) and bought them to resell. However, I put the purchases on credit cards. Anything purchased on a credit card that isn’t paid off quickly is NOT a great deal.

Lesson 3 – Living with a budget.

I don’t even get a grade for this lesson. I didn’t even finish the class. I never lived with a proper budget. I thought I was doing fine when I didn’t have late bills or run out of money before the next pay check. It never even occurred to me that I could have cut back on some expenses (like eating out) and use that money to pay off debt.

I had heard about budgets and knew that they were supposed to be beneficial to keeping yourself on track. I just didn’t understand what that meant. I didn’t grasp the concept of only spending $40 a month eating out but nothing more after that because the budget was set up that way.

Lesson 4 – Saving money.

I never signed up for this class. I was told that I should have a savings account but I never thought I had enough money to put into one. The idea of paying myself first was foreign. The concept of an emergency fund was never brought to my attention. Saving money just wasn’t a lesson I ever learned.

It wasn’t until it was all too late that I was able to correctly learn these above lessons.

In early 2010, I was an unemployed, divorced, mother of 2, living at home with my mother and I had just driven my car it’s last mile. I didn’t have a savings account or an income. All I had was piles of credit card bills that I couldn’t pay. It took this dark point in my life to start me on a path of financial education.

It hasn’t been an easy 2 years but since that time I have made many changes in my life. I haven’t paid off all my debt and I’m not financially secure but with the lessons I have learned and the knowledge I have gained, I know that I will not be placing myself in a similar situation again.

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4 Responses to “Lessons Learned in Financial Literacy”

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  1. Great points you bring up some of which I have said in the past and hope that others understand. You mention using coupons to get great deals but putting it on your credit card. I often say that if you are putting anything on your credit card and not paying it off in full at the end of the month you are wasting your time clipping coupons.

    An emergency fund is crucial and everyone needs one IMO. You never know when you will need money to pay for something that you didn’t anticipate. We were chatting on my Facebook Page today about Unions and strikes. With the Canadian Railway going on strike today the topic of what would you do if you went on strike? Would you have the fund to keep your house going. If the answer is no, then people need to buckle down and prioritize what’s important to them, eating out or a roof over their head…

    I also agree 100% when you talk about the budget. If you have $40 to spend you spend $40… if the money is budgeted you can’t pull money out of thin air to pay for things. If you try like most it ends up on some form of credit. Most times people can’t pay off the credit and keep building and digging a hole for themselves. Budget and stick to it…. spend less than you earn.

    Cheers,
    Mr.CBB

    • Ugh Budgeting. I’m so bad at it. It’s even worse now that I don’t have consistent income. I just try not to spend any money at all and hope for the best. I definitely need to fix that and fast! thanks for the comment.

  2. Amiyrah says:

    I loved this. I especially liked what you said about budgeting and your above comment about it. I hate budgeting. With a passion. It really does help to do it, but I feel like budgeting is that nagging parent that tells you what to do all the time, and if you want to do something on your own for once, the budget “tells” you that you can’t do it because you’re not “grown up” financially to do so. And just like those parents, we get aggravated by them but we do need them in our lives to give us that tough love. Budgets royally suck but we need them.

    • Jessica says:

      Thanks Amiyrah. Budgeting is my weak spot. I try to do one and I always fail to stick to it. I give in to myself ALL. THE. TIME. I need to get better at them.

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