The Lessons I Learned From My Childhood
If one wants to define the future, they must study the past.Confucious
I find this quote by Confucius to be truly compelling, and yet so simple. For Mrs. Dollarman and I to define our future, we must first understand how our present came to be. Where did we draw our personal finance behaviors from? What financial mistakes did we make in the past? How can we devise a plan going forward to avoid those same mistakes again in the future? In a series of blog posts I’ll be diving into my financial backstory pre-Mrs. Dollarman. I’ll take you guys on a journey throughout my life highlighting the financial lessons I’ve learned along the way; both the good and the bad.
My parents immigrated to the United States in the mid-eighties. They felt pressured to leave their country of origin due to civil unrest, and political turmoil. They showed up in America (legally) not knowing how to speak a word of English. Landing smack dab in the middle of a major U.S. city they toiled away at labor intensive jobs. The major impetus for them leaving their home country was to ensure that we had a chance to succeed. Through a strong work ethic, and resilience my parents were able to make it in America.
My dad continued doing his masonry profession when we arrived here in the states. He had essentially started all over; first as an masonry apprentice, and ultimately moving all the way up to becoming a master craftsmen. Through his career he secured many benefits such as healthcare, labor rate increases, and a pension. My mother on the other hand jumped around from one minimum wage job to another. While not working, she switched off with my dad to watch over us. As minimum wage jobs weren’t cutting it, my mother started a small scale business that was mildly successful. My siblings and I all made it through college, my parents paid off their home, and retired in their 60’s.
The financial lessons I learned from my parents
Every Sunday afternoon I would observe my dad pulling out his suitcase where he stored all his financial documents. He would meticulously balance his checkbook to ensure that we had enough money to pay the bills (FL#1). My dad, due to his profession would often find himself out of work. Out of necessity he made sure to always plan for the worst case scenario. To smooth out the ride during bad times they kept one year of emergency savings on hand (FL#2).
My mother was (still is) extremely frugal. She would often use her mercantile skills no matter where we went to get the best deals. There was no such thing as “my”, “his” , or “her” money in our household. My parents viewed their financial situation with the mindset of “our” money (FL#3). My parents always figured out a way to put food on the table despite us not having a lot. They also both didn’t believe in excessive spending. They focused their finances on ensuring we had the necessities first before splurging on our “needs” (FL#4) .
To help out with the expenses my parents learned how to house hack. They rented out a good portion of our home in order to have adequate cash-flow coming in. For the longest time growing up I thought the people who lived upstairs owned the place. Although life could of been a bit cushier, the memories we made with the tenants children I’ll never forget (FL#5).
Childhood financial lesson summary
FL# 1 – Budget
Despite not having tools such as Personal Capital, or Quicken my dad was able to keep track of our expenses. Being able to stay on top of my expenses is a trait I’m fortunate my dad passed along to me. I started tracking my expenses via Quicken mid-way through college. I’ve never missed a payment in my life due to the diligence my dad instilled in me as a child.
FL# 2 – Plan for emergencies
This is something I’ve not been very good at up until recently. Maybe due to the blind arrogance of having a “safe” career. Life can throw you many curve balls so it’s best that you plan for emergencies. My dad truly got it, he always planned for the worst case scenario; I can see that now. Mrs. Dollaman and I are actively putting our plan in place so that we’re ready for whatever life throws at us.
FL# 3 – Share everything with your spouse
Getting philosophical with you guys again with this good tidbit.
The whole is greater than the sum of it’s parts.Aristotle
It means you could only do so much when things are disjointed in your life; to include your finances. Not having joint finances with your spouse means you’re not on the same page. When it comes to accomplishing your overarching life goals as a couple I feel having joint finances helps. The easiest way to make great swaths towards achieving FIRE is doing so in a concerted effort. With only a few years on this journey together, Mrs. Dollarman and I have accomplished so much that we could have not possibly done on our own. There were also some bad/poor decisions we made as well, but the key is that we did it together.
FL# 4 – Be frugal and avoid overspending
This is another lesson I failed to take to heart as you’ll see in the next part of this series. Growing up my parents never brought us name brand clothing, expensive video game systems, or toys. They understood that material goods were not necessary for our well being. They valued saving, and only buying stuff necessary for our survival (home/utilities, food, basic clothing). These values went straight out the window as soon as I graduated college and started making “real” money.
FL# 5 – Figure out different ways to make money
As I mentioned earlier in this article my mother started a small scale business while raising us. My parents also house hacked my entire childhood. Today they’re bringing in a lot more rental income thus allowing them to live comfortably in retirement. Mrs. Dollarman and I plan to follow in there footsteps. Additionally, my hope for this blog is to grow it into an additional source of income. It’s exciting to make money discussing something that I feel passionate about.
Tune in next time for “Mr. Dollarman – Financial Backstory: (Part 2) The Lessons I Learned From My College Years.”