A Financial Do Over

This is a special post from Penny at The Saved Quarter as part of the Yakezie blog swap. This week, we were asked, “If you had one financial do-over, what would it be and why?” You can read my post on the same topic at her site.

Remembering games in elementary school, when the ball went out of bounds, my friends and I would yell, “Do over!” and get another shot.  That is fine for the playground but obviously doesn’t cross over into  financial choices. Thinking back over my financial life, there are a number of instances where I wish I could call for a “do over!”

If I had my life to do over, I would have finished college before having kids. I would have started saving and investing earlier, taking advantage of the awesomeness that is compounding interest. I would have bought a house before the bubble. But the number one financial choice I wish I could do over:  I would have started budgeting sooner!

For too many years, I spent money like water, letting it flow in and out of my life but not making any real choices about how I used it. I cringe to think of how much money I wasted in my 20’s due to irresponsible overspending and overdraft fees. I can’t do over those years, and that money (which could be compounding as we speak!) is gone forever. It’s never too late to change habits and stop the damage, though.

It took a drastic pay cut and brush with food stamps to get my butt in gear and start really managing my money.  I had to budget out of necessity. What a revelation! Making a budget meant becoming aware of my spending, which wasn’t in line with my income, and made me reevaluate what I considered needs. I started using cash envelopes. I made an envelope for each budget category so I couldn’t overspend. I couldn’t overdraw our account. Financial responsibility became a habit. In a little over a year, I was able to turn our situation around, even with a low income. I saved a quarter of our income, dropped the food stamps, and returned to college to finish my degree. I will graduate debt free.

Without becoming aware of my poor money habits and making deliberate choices about how I would manage our money, I would still be wishing for the do over.  I can be glad that I’m making good choices now, and try not to kick myself over the choices I didn’t make sooner.

Image by Gamma Man.

9 thoughts on “A Financial Do Over”

  1. We all know what we “should” do, but it’s really tough to do it. Budgeting can fall by the way side if you make enough money and I’m sure most young people had the same problem as you did. Experience is a harsh teacher, but the lesson sticks. 🙂

    1. You’re so right that we know what we “should” do but that taking action is tough!

      In the gym this morning, a woman complained that she didn’t have time to exercise enough. This woman also wants to lose weight and was upset that it wasn’t happening very fast. The class leader asked if she watches an hour of TV or more a day, to which the woman said yes. said, “That’s like saying you don’t have enough time to set your automatic sprinkler because you’re too busy watering the lawn.” Her point, of course, is that your body can’t get more efficient at calorie burning if you keep wasting time. 

      The same can be said of budgeting: if you’re so busy spending without any concern about where it’s going you can’t really complain that you’re broke!  

  2. I agree – I shudder to think how much money I spent frivolously that could be racking up interest and guaranteeing me an early retirement. However, those little financial boo-boos and uh-ohs can be the reason we budget in the first place – as it was in your case. It took lots of walking to work and ramen dinners to teach me that same lesson, but I’ve carried it with me and learned that it is possible to survive on very little. Of course, you have to treat yourself every once in awhile but it’s such a great feeling to know that ever dollar you save only adds to the cushion.

    1. We do treat ourselves every so often, but now I budget for treats – entertainment, dining out, even a vacation. I no longer spend and then worry that I can’t pay this bills! That shift made all the difference!

  3. I think your point about finishing college before kids (if one has the choice) can’t be emphasized enough.  It can be so much more expensive to go to college when you have kids. Some examples:  Attending part time wastes money when you aren’t getting the maximum credits for your dollar.   Childcare while you are in class raises the cost of attendance.   It is more difficult to study uninterrupted with kids (without paying for childcare), which can endanger your grades/academic success, which costs money if you have to retake courses.  It is difficult or impossible to attend extra-curricular events, extra credit opportunities, and study groups.  If you are under 24 when you go to college, you can be covered by your parents’ health insurance, whereas if you attend school as an older person, you have to carry your own insurance or do without and pay out-of-pocket for healthcare. As an older person with kids, this can get expensive very quickly…way more expensive than being a younger, single person, on average.  There are also fewer lifestyle sacrifices you can make when you have kids. As a 20 year old, I could live on rice and ramen in 300 square feet. As as parent, I cannot make that kind of choice for my child. 
     
    There’s also a lot to be said for the type of employment you have when you or your partner gets pregnant.  With a college degree, you’re more likely to get a job that has health insurance and paid family leave.  That is HUGE!    Not to mention all the years spent earning less than your potential before you get a degree. 

    On the flip side, even though I earned a BA before having kids, I think it was becoming a parent that really taught me what I want to do. I wish I had earned a master’s degree before having children but I probably would have earned it in the wrong subject!  And fertility treatments aren’t cheap either, and if I had waited too much longer I probably would have needed them. 
       

    1. Hillary, finishing college before kids was the second choice for this topic, for all the reasons you mentioned. It is so much tougher now!  

      On the flip side, I’m much more focused and my study time isn’t squandered. My GPA is higher and I take classes more seriously than I did when I was 19.

      I would have appreciated the job with health insurance and paid family leave, though, and the opportunity cost of the decade of career building that I lost by not starting my career at the same time as my peers can’t be understated. 

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