During the first installment, I learned some pretty terrible money concepts in my childhood. I believed that money was the method to buying instant happiness and that accepting free things was wrong. I also missed out on any opportunity to learn about personal budgeting or finance simply because there was no opportunity for it.
When I became a teenager, I began to have opportunities to raise money from my own work. I became heavily involved in the at school, mostly because it was the only vocational extracurricular program that my small school offered. It was through the FFA that I first had the opportunity to make money – and to make my own enormous financial mistakes.
I was given the opportunity to start a vocational agriculture program, in which I would learn how to make money using agricultural practices. Given my home situation, I was paired with a local farmer who provided oversight (and some free resources I didn’t have at home) over a pair of small projects: I grew a patch of tomatoes to sell to local grocers and at a farmer’s market and later I raised three hogs for market.
The work wasn’t the hard part: I was used to doing chores around home and I learned a great deal about the process of raising tomatoes and hogs. What I didn’t learn is any sort of financial sense.
My first mistake was I kept no records of any sort. Instead of keeping track of the hours I invested in the projects, the amount of tomatoes sold (and their value per unit), and even the market value of the hogs, I instead just pocketed the money and essentially made up numbers on the data sheet that I turned in each year describing my project. I didn’t view financial records as important, mostly because I had no example of why financial records were important.
My second mistake was I didn’t do anything productive whatsoever with the money I made. I bought all sorts of frivolous stuff with it – and I didn’t put a dime into any sort of savings account. My parents told me that my FFA earnings were mine to do what I pleased with. Even at that late stage, I could have been imbued with some idea of the importance of saving, but instead I learned how great it was to get a Sega Genesis.
My teenage mistakes didn’t end there. An old friend of my mother’s turned up around my sixteenth birthday and he was flabbergasted that I didn’t have the money to buy a car, nor were my parents even considering buying me one. He gave me a 1985 Buick Skyhawk for my sixteenth birthday – a gift that my parents wanted to turn down, but my excitement at being a sixteen year old with a car was too much to overcome.
My third mistake was I didn’t value any asset that I had. The car ran beautifully, but it had a few problems, most noticeably the leak around the passenger side of the windshield. Rather than spending what would have been a small amount to fix it, I merely drilled a hole on the passenger side floorboard to let the rainwater out. You can guess what happened: within a year, the passenger floorboard was completely rotted out.
Even worse, I literally ran that car into the ground. I would drop the pedal to the floor on a regular basis and eventually I started doing stupid stuff like slamming it straight from drive into reverse while going 80 miles an hour – I was a stupid kid with a car that I didn’t respect the value of, what can I say? Eventually, the car I had been so ecstatic about when I got it just died, with more repairs needed than it was even worth. Rather than having a car I could drive to college and perhaps eventually trade in for something better, I had a piece of junk that wound up sold for pennies as scrap metal.
Even though I was born poor and obviously made some poor choices, I still managed to get into college. Even though I could have left for college with a car and several hundred dollars, I left with nothing. How did I get into college? What kinds of mistakes did I make there? Read on to find out!
Want to jump quickly to the other Road to Financial Armageddon posts? Here’s an index to help you out.
#1: The Earliest Mistakes
#2: Early Profits … Lost
#3: Cash & College
#4: The First Taste of Real Money
#5: Love & Marriage
#6: The Yuppie Years
#7: Here Comes Baby
#9: The Road to Recovery
#10: What I Learned