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What Growing up Poor Taught me About Money

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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!

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  • Frank Moreau says:

    This is a very impressive sincere article. It is amazing how humble beginnings can sometimes be the inspiration to a great financial future. I am very impressed with this insight into your earlier years and this could serve as inspiration to youth facing the same challenges.

    Wonderful article! I will happily retweet it to my Twitter timeline.

    • Christine says:

      Hi Frank,
      Thank you so much for your kind words. I felt a bit worried about putting such an honest post about my young life out there on the big, bad Internet, but I think it’s important for others to see that where you come from doesn’t limit where you go 🙂

      Part of my motivation to earn well is so that I can provide financial security for myself and my family. It’s a good motivation. Thank you for the share 🙂

  • Will says:

    I read a diary entry one of my relatives wrote a few generations back… they were so poor they lived on stale bread and sour milk.

    My grandfather worked hard to change his situation. His work ethic quickly made him into a multi-millionaire. He showed me anything is possible with hard work.

    He was wealthy. I had to be the one to figure it out though. If you met the man, you’d never guess. This is probably why I work hard and stay frugal. As Warren Buffett says, ‘We measure our success on an internal scorecard, not an external one.”

    • Christine says:

      That’s so cool! It must be really inspiring to have that kind of history 🙂 I agree with that quote – I know wealth isn’t everything, but I’d like to change things so that I have financial freedom, security and there’s something for my future kids to inherit.

  • Sune says:

    I grew up in South Africa and my dad had his own small business. The cost of living in South Africa is extremely high and honestly, my dad made just enough money for us to survive. This has motivated me to stop “surviving” and make enough of my own money to start “living”!

    • Christine says:

      Hi Sune, thanks so much for dropping by. I’m glad you can see the difference between the two and I’m sure you’ll get there. Living week to week is no fun and it is so stressful as well 🙂 Best of luck with your journal to financial freedom!

  • I only lived one year where I knew things were really tight for my parents. That year taught me how to live on a whole lot less and was pivotal in how I make spending and earning decisions today. I can only imagine the impact it had on you.

    Thanks for sharing Christine.

    • Christine says:

      Thanks for dropping by and sharing your story. Were your parents upfront about their financial tightness? It’s cool that it could help shape your financial future /and/ that it was only brief.

      • Yes. They shared, emotionally and verbally. I had no difficulty self-imposing cuts to help reduce the stress the family unit experienced as a whole. Great life lesson. I’ll never forget the feeling.

        • Christine says:

          That’s really cool. I hope I can be that transparent with my future kids one day as I think you learn a lot more than you do from being sheltered. It’s great to see it touched you so much.

  • Great article Christine. I remember when I was younger, my mum and dad living payday to payday for a while and I always remember watching them cutting up their credit card vowing never to use it again. I was only about 11 at the time but I remember saying to myself that I would never ever use a credit card. Fast forward to my adult years and yes I do have a credit card but it is one that gives me cashback and I always pay it off in full every month.

    • Christine says:

      That’s really cool that they cut up their credit cards in front of you and that it had such a positive affect on you! My partner grew up comfortably middle class with parents who did quite well for themselves. As soon as he was 18 he got as much stuff on credit as he wanted and got himself into debt. I really think some transparency is important to help ensure your kids value money and it definitely sounds like your parents gave you that 🙂 Thanks for dropping by!

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