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.