Did you get educated on savings vs debt?

I want to pose a question and then offer a scenario for discussion. the question follows:

From whom did YOU learn about finances; specifically spending and debt when it comes to your financial habits?

Here's the scenario. The discussion of government services got a decidedly political slant, but I want to shed some light about how good people really do have it in the United States. (so pardon me a moment Canadians.)

Alot of political discussion treats people who save for retirement as the anomoly and Social Security as the defacto for most people as far as their choices in retirement options. That people who -can- save for retirement are priveleged few, are getting lucky breaks.

I want to smash this thinking into a million pieces and reduce this to a simple function of life choices. Even at minimum wage all your life, taking advantage of the savings habits and laws in our current tax code.

I learned financial behavior from my parents. They were tenacious savers and never had a car payment or a mortgage. My mom never worked. My Dad worked his way up from draftsman to engineer (by title, not by degree). He never made what could be considered a large salary. He built the house they live in now from savings 40 years ago. Once purchased, a car would be driven until it was D-E-A-D. Our used cars were never sold. They went to the junkyard. Even today, he's very frugal and shops sales and uses coupons.

I am amazed at what they were able to accomplish, and I may be thrifty by today's standards, but by my calculations, I waste a ton of money compared to my parents.

My parents... but it was more along the lines of "we aren't giving you anything past the age of 16, so you better do something about it if you want anything above and beyond food, clothing, and shelter". If you aren't bright enough to figure out that you need to save money to retire when you are older, or that the younger years of your life are the most important for saving due to compounding interest over DECADES of time... I don't think education is going to help with that, it should be common sense

Of course, up here in Alberta, any schmoe with a usable body can earn $15/h and journeymen mechanics are paid a minimum of $30+/h so it might not be applicable. But I still started out earning minimum wage like everyone else, and I could afford a car, rent, and food on $12/h wage. And it was good food and a fun car!

I learned from my parents, but in a "Well I'm not getting sucked into that trap" kinda way.

Parents. I've never made a car payment. Only borrowed money for 2 mortgages and a little tax issue I had 30 years ago.I'm trying to instill that same ethic in my sons, but it's not working as well as I'd like.

Although my folks paid for my college, I purchased my first bicycle, my first car (and insurance), and always had to work for spending money. (allowance through chores, or job) I've been continuously employed since I was 14.

They always stressed the importance of not spending money you don't have. This kept me away from large credit card debt, or car payments.

I've had many, many cars, but only had one car payment. (for a $3,500 E30) and never owned a car newer than a 1997. (bought in 2007)

I see pampered kids who are given everything they want and it almost always results in them taking longer to grow up. You just don't appreciate things unless you have to pay for them.

Parents, both in my fathers frugality and thriftiness and my mom and step-fathers ability to save save save...and spend a little.

Downside is I also inherited my fathers "perfectly content making $10,000 a year"...and some school loans of my own.

Yup, my folks taught me to save. I have invested all the law will allow in a 401k for 15 years now. But then again, I make about five times the average income for an individual here. But I've never had much in the way of debt. Never had a car loan. When I made $28,000 a year I couldn't support myself. Went into just a tic of debt. Seemed like a lot at the time. Don't see any way I could have saved much back then. I had my 401k, but only put 3% in it. Wouldn't have added up to a lot.

Not sure. A bit parents (general conservativeness / thriftiness), but a lot of the specifics more my own.

For a lot of people it seems like their education comes from TV commercials and programs MTV is not a good source of sound financial advice.

One thing I can say is this sort of thing (general knowledge) NEEDS to be taught in schools. It's insane that we are supposedly preparing kids for life and are leaving this out. There would likely be a LOT of push back from some industries if this were to happen though (financially uneducated people are far easier to market to).

You guys are lousy patriots. This country is in the debt business. It is our only real product anymore and you berkeleyers don't have any? Goddamn pinkos.

My dad came from a banking family but found it didn't agree with him so he charted his own course. Never finished college, Air Force in the Korean War era, worked for a huge R&D corporation for 35 years. Started a cash side business (self-serve carwashes) and another small company that developed R/C model airplane accessories.

Mom and Dad were not complete tightwads but they tried to spend money only where it made sense. They were most assuredly not the "nothing but the best" types - if it got the job done and was not horrible to use, it was good enough. By the same token they did live in a nice house that they fixed up themselves, and had plenty of toys (small boats, motorcycles, etc. He told me once "my $600 Kawasaki gives me the motorcycle experience too - it doesn't need to be a $5000 BMW" and that kind of sums him/them up.

They were not completely debt-phobic. They had mortgages and the occasional personal loan, but mostly paid cash for cars (I think).

They bought some cars new and some cars used, but everything but The Good Car ('72 Grandville ragtop, bought new) got well over 150k on it and many were over 250k before getting retired.

He did nearly all car work himself, most of the house renovations and repairs himself, and tended to find hobbies that he could also freelance some work in to support the costs. He fixed specialty cars for friends, and fixed R/C model airplane radios for some of the early manufacturers.

My parents didn't vacation much until we 4 kids were all grown up and he retired. After that, though, he enjoyed some of his savings after mom convinced him to do some traveling to Europe.

They put money away all the time, officially in the company retirement plan and their own investments, and unofficially some skimmed cash in the bottom dresser drawer. With Dad providing most of the income (Mom worked off and on for her own sanity, but mostly raised 4 kids) they were able to retire in their mid-late 50s and remain financially secure. Dad died at 68 but mom lived comfortably to see her late 70s with plenty of money left over.

So all in all I got most of my role model from him and am trying to follow along, though I lack the skills and patience to do much of the handwork he did for himself.

My folks, who were very anti-debt. Oddly, I don't recall hearing in as much detail about saving, but that may have more to do with my youthful listening skills...

I remember taking economics in high school, but couldn't tell you anything other than that the cover of the book was red and grey.

I stumbled along for a while trying to have a car habit while pouring coffee professionally, and similar episodes. I had one pretty thorough fail with credit card debt on that front.

Now I pretty much just have some student loans, and my biggest concern is making up for lost time on the savings front.

I am astonished, from where I sit now, at how well we lived on my dad's paycheck, and that people who make a lot less than I do and who have kids can get by, let alone save.

Of course, I'm still really struggling with the notion that anybody ever buys a new car, but I know my used ones must be coming from somewhere

Bad experience.

The upside to learning the hard way is you learn well.

I thought we just work like crazy until the day we die? Savings is for the B-E-E-R-R-U-N.

The common missing link in this thread is that no one was educated in a classroom.

oldsaw wrote: The common missing link in this thread is that no one was educated in a classroom.

Can't learn what they don't teach.

fast_eddie_72 wrote: ...When I made $28,000 a year I couldn't support myself. Went into just a tic of debt. Seemed like a lot at the time. Don't see any way I could have saved much back then. I had my 401k, but only put 3% in it. Wouldn't have added up to a lot.

i'm glad you can enjoy the fruits of your labors now, but imma gonna smash that 'only 3%' bit of perception there in a minute. ;p

Can't learn what they don't teach.

you got that right, bra~

My grandmother saved saved saved all her life, now she is flat broke and living on medicaid and SS. All that saving goes really fast when you are aged and in and out of the hospital all the time.

My family tried to drill into me the saving thing and delayed enjoyment. If you're just an average Joe with a couple hundred K in savings its either going to be stolen by some investment banker who contributes nothing to society. Or used to pay for some overpriced heath care when you are really old and everyday life is miserable.

Yes I know who Dave Ramsey is, I am a fan of some of his teaching and even went to one of his live events once. He exagerates what the average person can really do with a meager income in my opinion when it comes to building wealth.

I guess to answer your question, I learned by observation. I don't take anything anyone tells me as the truth. I see the value of being debt free, I don't see much value in saving excessively.

Tim Baxter wrote: Bad experience. The upside to learning the hard way is you learn well.

Same here.

My parents in all of the good things I feel they taught me, financial stuff never really went past "Don't spend all your money."

Now at 29, I own* a house and neither of them do. I'm by no means a prolific saver or anything, but I'm doing much better now about 401k contributions and saving (about 15% of salary between the two, and eventually I'd like to bump that number up to 30%).

*own as in paying interest on a mortgage.

z31maniac wrote:

Tim Baxter wrote: Bad experience. The upside to learning the hard way is you learn well.

Same here. My parents in all of the good things I feel they taught me, financial stuff never really went past "Don't spend all your money." Now at 29, I own* a house and neither of them do. I'm by no means a prolific saver or anything, but I'm doing much better now about 401k contributions and saving (about 15% of salary between the two, and eventually I'd like to bump that number up to 30%). *own as in paying interest on a mortgage.

School of hard knocks - master's program

So i'd say the consensus here so far is LARGELY a parental figure gave counsil on the ways of financial means.

I'll go as far as to say most of you are self-sufficient. ;p

Most of you also included remarks of endearment about your education from them, the feeling that it was useful life tools given to you.

So my NEXT question to you all is, who do you think educates most of the people that have to take government aid as a primary means of their lifestyle?

I learned financial responsibility from my folks, and from their example of common sense spending habits. We're not "all debt is bad" people, had car loans, etc. but most of our cars have 100K+ miles (in some cases bought new) and we never spent money we didn't have.

That being said, my middle school Civics teacher made everyone learn to balance a checking and savings account, fill out a 1040EZ tax return and what all the forms are, and do some basic compounding interest/retirement type math problems. I thought it was cool as hell.

madmallard wrote: So my NEXT question to you all is, who do you think educates most of the people that have to take government aid as a primary means of their lifestyle?

Can we answer your question with a question? Who thinks that people PRIMARILY in those positions (not all, but most) would be receptive to education in the first place? Especially since there is literally ZERO incentive to follow it.

I must be the anomaly here. My parents did a superficial job of encouraging me to save money, yet always were in debt for cars and other things. Never precariously in debt, mind you, but always having at least one car loan and a home equity loan for something.

I started working at age 13 delivering newspapers, which taught me to be self sufficient, punctual, reliable and honest among other things. I've only been in debt for cars two times in my life, and I hated it both times, so don't do it anymore. Currently, the wife and I only owe on the house, and once that's done (10 years or less) never debt again.

So really, I don't know where I got it. I just sort of developed a strategy of living within my means because it just made sense to me. As for question #2, can't tell you, haven't lived that lifestyle.

madmallard wrote: So my NEXT question to you all is, who do you think educates most of the people that have to take government aid as a primary means of their lifestyle?

I don't see why it would be much different.

Learning about finances and doing what you have been taught are completely different things.