Two summers ago I read a book by Barbara Stanny called “Prince Charming Isn’t Coming: How Women Get Smart about Their Money”.
In chapter one of her book Ms. Stanny recalls how, on her twenty-first birthday, her parents revealed to her the trust fund established in her name. “‘You’re a very rich girl, Barbara,’” her father explains at the breakfast table. Stanny goes on to recount: “‘ You’ll never have to worry,’ I remember my dad saying that morning. It was the only advice my parents ever gave me about money. ‘Don’t worry.’”
At 21, my experience with financial management was a bit different than Stanny’s. Shockingly enough I wasn’t handed a trust fund document the morning of my twenty-first (although I did climb Mt. Sinai that morning, arguably as cool as any other birthday celebration). Far from neglecting to give me money advice, my parents have tried to instill within me the type of financial wisdom that I’m sure many children my age have received from their own parents. My mother taught me how to use and balance a check book. My father periodically discussed the fate of his stocks and the nature of his retirement account. I was given an allowance as a child and encouraged to handle it wisely. I was gently required to get a job when I was 16 and from then on began to pay for more and more of my expenses, like clothing, entertainment and gas.
When I was a senior at St. Olaf, my father instructed me to personally handle taking out a few student loans to pay for that year of college. I was in and out of the Financial Aid Office so often for a span of two weeks that the advisors began to remember my name and could recall my specific case without the prompting of their notes. It was an incredibly frustrating process, but I learned more about student loans in those two weeks than I had ever learned before. And then, after graduating, my parents informed me that I would thereafter be more or less financially independent.
I am a blessed child. My mom and dad have given me every comfort I could have asked for, and more – very, very few children in this world are nearly as lucky as I have been. Still, like Ms. Stanny (and probably like many of you), I’m finding that it’s a struggle to own my financial stability.
Money is a taboo topic, and yet it makes the world go ‘round. There seems to be a direct correlation between wealth and prosperity, between poverty and difficulty. Like Kat mentioned in a previous post, poverty isn’t simply a lack of financial capital; poverty is very much also a lack of opportunity. To evade poverty, to provide for ourselves and our families, to do and experience the things we enjoy, we find employment in part to reap the monetary rewards. And yet, as a society, we are notoriously stupid with our financial lives.
My experience with Thrivent has opened my eyes to this reality. Part of the beauty of our organization is our commitment to the concept of education. Unfortunately, it’s not enough to tell people that you can provide a learning experience for them based on financial wisdom and best practices; often, we require scare tactics to get us to listen. The facts detailing the ways Americans spend their money provide no shortage of shocks to the system. For example, did you know that…
- …77% of the workforce surveyed by CareerBuilder in 2010 was living paycheck to paycheck?
- …according to a 2010 Harris report, 34% of Americans are completely without retirement savings – even though we spend, on average, 20 years in retirement?
- …in October of 2011, Americans owed $2,457.5 billion total in outstanding consumer credit?
So if our money situation is so universally bad, why do we as a people tend to ignore our financial wellbeing?
Part of my job at Thrivent is to promote a financial literacy program on college campuses. We instruct our student leaders to educate their peers on being wise with their finances now, especially because they’re young and have a lifetime to cultivate the right money habits and make decisions that will secure their financial future. It sounds boring, but it’s vitally important. I know the wisdom of my own advice – I’ve taken major steps, like creating a checking account separate from my parents’, maxing out my 401k match, and establishing an automatic payment for my monthly rent. But I still don’t have my own credit card. I don’t save nearly as much as I could each month for major expenses that will be coming fast down the pipeline: graduate school, a mortgage, a family. I’m lucky if I balance my checkbook bi-monthly. I don’t know what my account balance is half the time – I just know it’s above zero. I’m pretty much a walking hypocrite.
Very few people like to deal with their finances. Like so many things in our life we assume that, if we don’t pay attention to it, perhaps our financial problems will just go away. We spend money that we don’t have in order to obtain the standard of living we think we deserve.
So, is there a solution to our ignorance? I’d like to think so. But the point of this post isn’t to provide you with the answers—it’s to kick-start your own search.
Here are some resources I’ve used to help me begin my own journey to financial wisdom. Who knows – they might prove useful to you too…
- Laurie Santos: A Monkey Economy Like Ours. A TED talk about the psychology behind our money decisions.
- mint.com. A free and secure personal finance organization center.
- bundle.com. Like a hybrid between Mint, Groupon, and Googlemaps.
- SmartyPig. A savings solution center with a pig mascot. Slubs love pigs!
- Bankrate. I used this site to research checking and savings accounts, and credit card options and rates.
- Thrivent Financial. Just a plug – Thrivent does good work, and their calculators (under the “Tools & Planning” tab) are super useful when determining repayment options.
- All Your Worth: The Ultimate Lifetime Money Plan by Elizabeth Warren & Amelia Warren Tyagi. Right now I live by their 20-30-50 spending plan. Super comprehensive, incredibly readable.