Growing Up Poor Has Made Me Rich In So Many Ways

 

Two recent articles on finances made me feel so grateful for everything my parents taught me about money – AND inspired today’s post!

 

One article was on Warren Buffett’s belief that parents need to start teaching their kids about money by the time they’re five years old. The other was on how having our finances in order, makes us happier and more confident.

In looking back on my life, I consider myself incredibly lucky to have grown up the way I did. And strangely, although I grew up in an impoverished household, I never realized we were poor. Everyone around me was in a similar situation. We were all non-English speaking immigrants from Europe who had made our way to Australia.

My parents and I lived in a house that was a shack. My father, who was not a carpenter, built it by hand (along with all of our furniture). Whenever my parents got a little money, the house would get a bit more finished.

I do recall that we had a vegetable garden and fruit trees which turned me on to fresh produce at a very early age. Being able to go into our backyard to pick an apple, a plum, or a pear right off one of our trees, went a long way to making me feel rich as opposed to poor.

Here’s how I grew up:

  • We didn’t have a car until I was almost a teenager. My parents got around on bikes.
  • No television, no phone.
  • No indoor plumbing. We had an outhouse and once a week, an old school “honey wagon” would come by to pick up/replace the bucket (in Australia, these outhouses were called dunnies).
  • No AC (even though Australia gets super hot – we would sleep out in the yard if the house was too hot).
  • We NEVER went out for dinner.
  • My mom always cooked from scratch – never processed foods, never soda.
  • No sitter for me EVER. On the rare occasions my parents had somewhere to go, the neighbor’s German Shephard was brought in to watch me. He’d growl whenever I tried to get off the couch. May have something to do with my aversion to dogs to this day.
  • Neither of my parents graduated from high school. They worked in factories. My dad was, however, a master welder, so he was never lacking for a job.
  • To supplement our income, my parents worked on farms on weekends picking crops. A truck would pick us up well before sunrise and take us out to the fields. I considered this the most fantastic adventure. And that’s probably why, to this day, I love getting up at the crack of dawn. Picking peas was my favorite! My mom would let me eat as many as I wanted. So tasty!

I don’t recall specific conversations with my parents about money, but I do know they instilled in me, at a very early age, the importance of saving and being debt-free.

The message I got from my parents was that money was hard to come by and that we, as a family, would always live within our means. I have no memories of ever coveting, or badgering my parents, for anything that was beyond our reach. It was ingrained in me that if you didn’t have the money for something, you didn’t get it. My parents also did not believe in credit cards. I do have two credit cards but have always paid them off in full each month.

Being debt-free was vitally important to my parents. They never took out a loan or a mortgage. I’ve done likewise, and all I can say is that my early frugality (learned from my parents), has allowed me to live as I do now. And for that, I will be forever grateful.

 

Read on below for highlights from the Warren Buffett interview on the #1 mistake parents make in teaching kids about money. If you are a parent, this is a must-read.

 

Warren Buffett On The No. 1 Mistake Parents Make When Teaching Kids About Money

“Sometimes, parents wait until their kids are in their teens before they start talking about managing money — when they could be starting when their kids are in preschool.”

  • Buffett also mentioned that his dad was his greatest inspiration, teaching him to save and have good fiscal habits early.
  • One study from Cambridge University found that kids can grasp basic money concepts between the ages of 3 and 4. And by age 7, basic concepts relating to future financial behaviors will typically have developed.
  • According to a 2018 survey from T. Rowe Price, only 4% of parents said they started discussing financial topics with their kids before the age of 5.
  • 30% of parents started educating their kids about money at age 15 or older, while 14% said they never did at all.

“It’s never too early,” Buffett said in a Q&A with Yahoo Finance in 2013.

  • “Whether it’s teaching kids the value of a dollar, the difference between needs and wants or the value of saving — these are all concepts that kids encounter at a very early age, so it’s best to help them to understand it.”

 

Happiness And Confidence Are Tied To Money (Source: Motley Fool)

92% of Americans claim nothing makes them happier or more confident than when their finances are in order. If your finances are a mess, chances are it’s wreaking havoc on your mental state.

Here’s how to clean up your act — and enjoy the feeling that comes with being on top of your finances.

1. Set up a budget

  • It’s hard to feel like your finances are in order when you have no idea where your money goes month after month.
  • With a budget, you’ll get a sense of what your expenses look like, and you’ll be better positioned to cut back as necessary to boost your savings or free up money for other objectives.

2. Build an emergency fund

  • Nothing says “peace of mind” like a healthy emergency fund.
  • Ideally, it should contain enough money to pay for three to six months of living expenses.

3. Map out your long-term goals

  • Having a strong handle on your financial goals improves your outlook and increase your chances of success.
  • Half of Americans don’t know how much money they can afford to spend now versus how much they should be saving.

 

Bottom Line.

The secret to good fiscal habits (much like healthy habits) is to understand that actions have consequences. Spend too much and live above your means and your finances (and your mental state) will be a hot mess.

From first-hand experience, I can vouch for the benefits of being frugal in your younger years. Instead of squandering your money on clothes or eating out, sock it away. It’s the only way to guarantee longterm happiness and satisfaction with life.

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