Yesterday, we watched as I stumbled through college making a series of classic financial errors. Yet I finished (albeit in six years) with a pair of degrees, and I was able to find work utilizing both of them. I was suddenly making more money per year than my parents had made combined in any year, ever. Surely the lessons of my childhood poverty would instruct me on how to be thrifty with my windfall? Think again.
Rather than living thrifty, as I had observed growing up, my financial windfalls led me into a giant buying spree. I bought a monstrous television, a state-of-the-art computer, a brand new vehicle, tons and tons of DVDs and music and games of all kinds, expensive gifts for my family (including buying my niece a computer for Christmas)… I bought and bought and bought and bought, because I had learned as a young child that happiness comes from fulfilling every whim of your heart.
Now, this wouldn’t be so bad, but my spending quickly spiraled out of control. I was making a lot of money, but I was soon spending more than I was bringing in. I got a couple credit cards and it wasn’t long before I maxed them out. I just kept buying stuff I didn’t need without any rhyme or reason because I didn’t understand what it all really meant.
It wasn’t long before I was making minimum payments on the cards in the area of $200 a month simply to cover all of the foolish things I had purchased. You would think that this might be a wakeup call, but it wasn’t… I would just pay the bill and then go buy something else that would bring a few moments of joy.
Even that could have been at least somewhat overlooked except for the fact that I had no savings plan whatsoever. I was saving absolutely nothing of what I was bringing in. Even though I had more money than anyone in my family could imagine, I was actually living paycheck to paycheck because I was spending so much on frivolous things.
Perhaps the biggest problem was that I allowed myself to appear much richer to my family in friends than I actually was. They began to have this impression that I was just made of money – and it just wasn’t true. But I felt this desire to keep up the charade because… well, because it made me feel good. I thought I was an inspiration, particularly to my nieces and nephews, and a source of pride.
To sum it up, I became a complete consumer. My focus was on buying things immediately that would make me feel good and I believed that the future would just take care of itself. It is a stage that I fear many people find themselves in today, a stage that I was eventually forced to move myself out of by seeing the financial havok that I had wreaked not only on myself, but on my family as well.
I allowed this spending to continue on for a while, even as other things in my life were changing. I began to date a wonderful woman and eventually we decided to get married. If you’re thinking “Uh-oh,” you’re probably right. Tune in tomorrow to read the whole sordid story.
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