I grew up “poor” by New Zealand’s standards. I grew up in a single parent environment with my dad who was on an invalid’s benefit. My mum was also a single parent to my half sisters on a benefit, so needless to say there was never a lot of money around when I was growing up. My parents had come from parents who were on benefits too. No one in my immediate family had gone to college and neither of my parents finished high school.
I remember some nights where I would sit at the dinner table by myself because my dad wasn’t hungry.
Looking back it was probably because money so was tight.
As a teenager I found it hard to miss out on things my friends had, even though all of my basic needs were met.
I used to fantasise what it would be like to win lotto, to buy a warm house, to have money for everything we needed.
I saw my dad buy new things on credit, paying things off over a long time but paying a lot more than the ticket value.
I spent my entire life in an environment where we lived week to week and there was no spare money for anything.
Compared to some of the countries I’ve visited such as India and Cambodia, I can see how lucky I am, but it was still hard growing up this way.
One of the benefits was that I found myself desperate to have financial security of my own and this has pushed me in ways I doubt I would have been pushed otherwise. Here’s what growing up poor taught me about money:
1) That if You’re Living Week to Week, You’re Living Above Your Means
Honestly, I doubt I could plan a budget on an invalid’s benefit… there’s no room to move, no money to save for emergencies… each week you’re cutting it thin. However, if you work and earn a salary you should be able to save something and if you can’t then you need to look at a side hustle. If you live week-to-week you’re on thin ice; if anything goes wrong, you’re going to have to take away from the things you need next week in order to get things sorted.
If you take out any short term loans, “hock” anything to pawn shop or loan money, it’s going to cost you more in the long run. Even when I was a student and living off $400 a week, I adjusted my spending so that I could save some of my money each week. You need an emergency fund, because life is full of surprises and you don’t want them to cripple you.
2) If You Have to Finance it You Can’t Afford it
A few years ago my dad had bought a laptop on finance, he had a bit of money owing on it still, but he had two options: either pay back $1,000 and save $800 in interest and repayment fees, or pay it back slowly and foot the extra $800 for nothing. He didn’t have the spare cash to pay it off all it at once, so I ended up loaning him the $1000 to save the $800. I am proud to say I have never financed anything; I have bought an expensive $3,600 camera in cash, a $6,500 car, a $2,000 laptop (a few of them over the past few years… all in cash.
I would rather wait and save than pay a premium to have it sooner.
This was my policy when I was a student, too, Now I could easily afford most things I want (within reason) with a week’s pay, but even back when I was earning maybe $25,000 a year I had this same policy.
3) Prepare For the Future, It’s Full of (Nasty) Surprises
My dad had an accident in his early twenties that rendered him disabled, when I was a small child. While he can still walk around, he suffers from extreme back pain and no longer can work in his previous industry (labour). He is in constant pain so unfortunately no job is really suitable for him. Most people in their early twenties wouldn’t have enough assets to live off for the rest of their lives but it’s important to plan for the unexpected. I am now trying to build up wealth so that if I can’t work in 10 years, I would be able to live a good life. I have an emergency fund now that would cover around 6 months worth of living expenses.
4) Education is Key
School’s not for everyone and I recently had a debate on a friend’s Facebook that school is the perfect environment to groom employees, not entrepreneurs. Coming from a family where neither of my parents had finished high school was challenging. By the age of 10 my parents couldn’t really help me much with homework.
Now, there is nothing wrong with being an employee. Just because I took a different path in life does not mean that working for someone else is a bad thing. In fact, it can be a great thing because of the job security that is involved. If I had earned a Bachelor of Science in Nursing degree, for example, I could have applied for jobs at various hospitals and there is no doubt that I would have made a pretty good living doing so. In fact, this is one of the fastest growing careers in the United States.
While many might consider my degree a waste of money, I learned how to write properly, form an argument intelligently and was opened up to possibilities of the world. Without my high school and university education I wouldn’t be where I am now. I believe education is key and that’s why I’ve spent months of my life volunteering in Cambodia teaching English to poor children, in a bid to help them open up more doors in their future.
Those are the main things I learned from growing up poor. How has your childhood shaped your views on money? We all came from different situations so I’d love to hear your side of things!