Finances – The first 25 years

I was raised in a conservative household. That might lead you to believe I received a good financial background, but you would be wrong.

There are a couple of reasons. First, money was never discussed, it was a private matter. So, I never was taught anything about money. Second, my mom was home a lot (super, super awesome), to raise the kids, but this means that money was a little tight. When, you combine this and money never being discussed, you end up being told there is not enough money for the things you want, but never told why.

Suddenly you are 18, and start to operate on your own. The vacuum left from not being taught about money is filled by learning from your friends, and advertising. So, I did what everyone else did, and just like I was told by advertisements. It felt very safe and comfortable to be the same as everyone else. So I spent pretty close to all the money I made, mostly on things I really didn’t need. Almost none of these items are with me today, they are comfortably resting in the dump! I did have some credit card balances here and there, but thankfully I stayed out of deep trouble with those. I put aside a little money, once in a while, since I knew that I was ’supposed to’. But I blended in with everyone and everything I saw, so I felt like I was doing ‘ok’.

The vast majority of my money I spent. A very large percentage of that spending was on items that took natural resources to make, I then received very little use from most of it, and almost no joy. Now it sits in the landfill. A hit to my pocketbook, a hit to my time, and a hit to the environment. The consumer culture we have created is nuts if you slow down enough to think about it.

Repeat this for 25 years. This brings us to 2.5 years ago. I am ~43 years old at this time. I have 6 months cash – Good. I have no credit card debt – Good. My only debt is my house (~50% of value) – Medium. I have ~$28,000 in retirement savings – Bad! Really bad! 25 years of making money, half of that time I was single, and my net worth* is negative!

*I measure Net Worth differently than most. I measure it Tamale Style. I don’t include the value of my house. Why? I will need a place to live for the next ~15 years of my life (until the kids are out of the house, then vagabond, van life here I come!). So, even if my house is paid for, the real value to me is only in the lack of monthly payments. The actual equity doesn’t help out since I have to live somewhere! I could sell it, but I would have to buy another place, or set aside the money to pay for rent. It starts becoming more of an Asset to me once I can downsize and get some of the $ out of it, which again for me is 15+ years away. Until then, once I pay it off it is simply a lack of an expense. This is simply how I prefer to look at it. Measure it however works best for you, just think it through. For me the house equity artificially inflated my net worth.

Many blogs I have run across are people who started the road to financial freedom much younger than I did. Many of them have no kids or 1 kid. (There are some with more, I am not all alone!). So here I was reading about early retirement (I will explain in my next Financial post), but I was starting way too late, with 1 income and a 5 kids.

Well, so should I try? I am waaaaay late to the party. Or do I just give up and plug back into the Matrix?
Stay tuned for my next Financial post (Actually it’s here now, click here).

– Stuck in Life

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