During the first installment, I learned some pretty terrible money concepts in my childhood. I believed that money was the method to buying instant happiness and that accepting free things was wrong. I also missed out on any opportunity to learn about personal budgeting or finance simply because there was no opportunity for it.
When I became a teenager, I began to have opportunities to raise money from my own work. I became heavily involved in the Future Farmers of America at school, mostly because it was the only vocational extracurricular program that my small school offered. It was through the FFA that I first had the opportunity to make money – and to make my own enormous financial mistakes.
I was given the opportunity to start a vocational agriculture program, in which I would learn how to make money using agricultural practices. Given my home situation, I was paired with a local farmer who provided oversight (and some free resources I didn’t have at home) over a pair of small projects: I grew a patch of tomatoes to sell to local grocers and at a farmer’s market and later I raised three hogs for market.
The work wasn’t the hard part: I was used to doing chores around home and I learned a great deal about the process of raising tomatoes and hogs. What I didn’t learn is any sort of financial sense.
My first mistake was I kept no records of any sort. Instead of keeping track of the hours I invested in the projects, the amount of tomatoes sold (and their value per unit), and even the market value of the hogs, I instead just pocketed the money and essentially made up numbers on the data sheet that I turned in each year describing my project. I didn’t view financial records as important, mostly because I had no example of why financial records were important.
My second mistake was I didn’t do anything productive whatsoever with the money I made. I bought all sorts of frivolous stuff with it – and I didn’t put a dime into any sort of savings account. My parents told me that my FFA earnings were mine to do what I pleased with. Even at that late stage, I could have been imbued with some idea of the importance of saving, but instead I learned how great it was to get a Sega Genesis.
My teenage mistakes didn’t end there. An old friend of my mother’s turned up around my sixteenth birthday and he was flabbergasted that I didn’t have the money to buy a car, nor were my parents even considering buying me one. He gave me a 1985 Buick Skyhawk for my sixteenth birthday – a gift that my parents wanted to turn down, but my excitement at being a sixteen year old with a car was too much to overcome.
My third mistake was I didn’t value any asset that I had. The car ran beautifully, but it had a few problems, most noticeably the leak around the passenger side of the windshield. Rather than spending what would have been a small amount to fix it, I merely drilled a hole on the passenger side floorboard to let the rainwater out. You can guess what happened: within a year, the passenger floorboard was completely rotted out.
Even worse, I literally ran that car into the ground. I would drop the pedal to the floor on a regular basis and eventually I started doing stupid stuff like slamming it straight from drive into reverse while going 80 miles an hour – I was a stupid kid with a car that I didn’t respect the value of, what can I say? Eventually, the car I had been so ecstatic about when I got it just died, with more repairs needed than it was even worth. Rather than having a car I could drive to college and perhaps eventually trade in for something better, I had a piece of junk that wound up sold for pennies as scrap metal.
Even though I was born poor and obviously made some poor choices, I still managed to get into college. Even though I could have left for college with a car and several hundred dollars, I left with nothing. How did I get into college? What kinds of mistakes did I make there? Read on to find out!
Want to jump quickly to the other Road to Financial Armageddon posts? Here’s an index to help you out.
#1: The Earliest Mistakes
#2: Early Profits … Lost
#3: Cash & College
#4: The First Taste of Real Money
#5: Love & Marriage
#6: The Yuppie Years
#7: Here Comes Baby
#9: The Road to Recovery
#10: What I Learned