Around the time I stopped sucking my thumb I developed another bad habit. I became a hoarder. Not the kind you see on that heinous reality show with newspapers dating back to the early 1900s or unidentifiable substances in discolored mason jars. Arguably, my hoarding was worse. I loved stashing away money.
At seven years old, I started hiding money in a tin can that still kind of smelled like Hershey Kisses and Reese’s Pieces — perhaps that’s why I have such a positive association with money.
Back then I decided to save up for a red Mitsubishi Eclipse. Say what you want, but I thought that car was the coolest. I believed I could save up enough pet-sitting and Krispy-Kreme-doughnut-sales money to purchase my first car by sixteen when I could get my driver’s license. Hey, at least I didn’t expect my parents were going to be buying me a car.
Pushing fast forward — that never happened because my family moved overseas and I didn’t get my driver’s license until I went off to college — but the hoarding habit lingered.
Sure, I upgraded to depositing money in a checking account where I was obviously totally taking advantage of compound interest and raking in so much extra dough by having my life savings sitting in the bank. (Was that little bit of sarcasm unclear?)
My little hoarding habit didn’t get much better in college.
As a resident assistant I started making the big bucks. $6,000 a year! We were paid in six stipends of $1,000 — three per semester. I lived a pretty minimalist lifestyle and my only big expenses were gas and car insurance (sadly, I was not driving a red Eclipse).
I carried on my hoarding ways and started tucking away 50% of each paycheck into savings. I had big plans to move to New York City after college and this nest egg would help finance my independence.
By now you’re thinking that I’m a financial goddess and clearly have never made a poor money-related choice in my entire life.
Except, I didn’t put it into my own savings account. I asked my Dad to transfer $500 per paycheck into his account. He kept an incredibly detailed spreadsheet showing exactly how much of my money he was holding. My rationale for this method was that I’d have to ask him to transfer money back to me if I wanted to make a big purchase. He never questioned it if I wanted my money, but it gave me a mental checks-and-balance system so it became difficult to buy expensive items on impulse.
Yes, my Dad’s saving account did accrue interest and he kindly credited me with the amount my money earned. My big mistake came when I graduated from college and started to funnel some of that savings back into my own account.
I PUT IT IN CHECKING!
Not only did I put that money in checking, but I held it there for an embarrassingly long time. I didn’t open my own savings account until about a year ago, around the same time I started investing money in places other than a 401(k).
Even sadder, it wasn’t even a thought that I had proactively. A financial advisor with my bank had to nudge me in the right direction. I started the process of putting some money into a mutual fund when the advisor nonchalantly asked why I didn’t have a savings account?
After an awkward silence I said, “Well, can we do that now?”
Moments later I had a savings account all set up. A completely painless and incredibly quick process that would’ve taken me all of 10 minutes to set up at any point in the two years since I’d started taking ownership of my savings.
We all have moments when we realize we’ve mishandled our money. That’s part of the reason financial education is so important. You don’t stop learning about money simply because you amass a certain amount of wealth or happen to make some great decisions regarding your investments. Financial literacy is an ongoing, life-long process. I have no doubt I’ll make other financial mistakes in my future, but I hope to learn from them and become better at handling my assets.
Fiscal responsibility is one of the only ways to become truly independent. That or give up all earthly possessions and become Plays With Squirrels.