Monday, March 05, 2012
A stay-at-home what?
After coming home from boot camp (I was in the Naval Reserve) for the summer with a wad of cash in my pocket I did what any 17-year old would do with 3-4 grand.
I invested it!
Okay so probably other teenagers would have just spend it. And maybe I would have too if it wasn't for the guest presenter we had come to our high school and speak about the power of investing young. The presentation that we were forced to attend in the gymnasium probably influenced me more than I realized at the time.
The man, who was in his late 50s, said that his biggest regret was not investing sooner -- at the age we were presently. I felt I was given a great gift. With this great piece of advice I could do what he wished he had done.
So I did.
I opened my first account with a family friend. With a large (to a 17-year old) lump sum start of 4-5 thousand dollars, I can't remember, I made my first deposit.
But the key to investing isn't to put your money into an account one time and watch it grow over time. For me, the key was to continue to put money in my account, monthly. So I started with small amounts like $50 automatic withdrawals a month. Eventually I increased this amount when I was in university but not to the point where I noticed the money disappearing from my account.
Now I was very fortunate to continue to do this for 2 reasons:
1) In grade 12 I won the UR scholar. This allowed me to attend university for free, with the exception of textbooks which my parents paid for.
2) I lived at home for free while I went to university while still working part-time (full-time in summer) during most of my studies. In my 3rd year I moved out with a boyfriend for 1 year. Then when he moved to another city for school I moved back home temporarily only to discover I'd rather pay a little more money each month to have my own space. But my parents door was always open if needed.
During this time the monthly withdrawals from my checking account into my investments still happened. But I didn't notice because that was money that I could not touch. To me, it didn't exist.
When I started dating Sung Hyun (at this point it would have been about 4 months into our 'this is not a serious relationship') relationship, Sung Hyun asked me for some money (around $500) to pay off his credit card. We were sitting at VIPS Steak House talking about my return to Canada and then my eventual return to Korea. I never gave him the money.
But I did later on into our relationship when he needed it to pay off his bills. He was supporting 2 people (his mother and himself) on 1/2 of what I was making in Korea. I was happy to help out. Sung Hyun had wild spending habits. Well, not wild but he certainly lived out of his means. His income was less than his expenses (his car payments with gas and insurance combined was over $700). He certainly didn't need a NEW car. But that's the way Koreans roll. You'd never tell anyone that you don't have enough money.
Now that we are in Canada Sung Hyun has become more cautious of his spending habits. But he still has that mentality that says "I'm making more money now than I ever have in my life so I can buy anything I want". I'm here to tug him down to reality to say "hey, I know you work hard, so instead of buying a $35,000 new car why don't we get a $15,000 new(ish) car."
And for the most part things have been going really well. We never really fight over money (well only when it involves being cheated out of money owed -- but I've buried that hatchet). I've disagreed with him spending ridiculous amounts of money on things that aren't needed but for the most part I can say this isn't a serious issue in our relationship. On the other hand, we've NEVER EVER been on a budget either.
Even though I save money I have never budgeted myself personally. I don't know how to work a budget. I'm so frickin' disorganized that I can't bother to keep receipts/ write stuff down. I'm a girl of many half finished projects. Budgeting to me is simple: I know I have a certain number of dollars and I shouldn't spend more than that. I don't need to write it down.
When we were shopping for our furniture for our new place Sung Hyun and I had 2 very different approaches. Money didn't matter to him. If you want it, just buy it! So we did just that. We got the best (read: most expensive) of most things. This made Sung Hyun so happy but it made me uncomfortable.
Saving money all these years made me value the ability to save. The ability to not have to choose the best or most expensive thing. I got satisfaction knowing that I had money in the bank. But Sung Hyun finds value in having the top everything (including a $120 oil-change last month -- because he needs 'the best' oil).
So we decided together that since we are in a new position (new place, new jobs, new financial responsibility) we would make it fun. We agreed on how much we would like to spend a month on our variable expenses. We bought jars (hello Gail Vaz-Oxlade) and have decided to keep track of (and try to stick to) our budget.
This is going to be hard for me because I hate writing things down/ keeping track of stuff like this. To me it's a waste of time.
This is going to be hard for Sung Hyun because he has never restricted his spending before, even when he didn't have money.
But this is going to be great for us. We will need to communicate more about money. I suspect I will start spending more money and Sung Hyun will spend less. We are doing this project together and have allotted a certain amount of money for a vacation fund. This will get us excited about doing something fun together, even if it's only a small getaway to another city. But allowing money for these things gets me excited to do things with him. Also, what a great way to decide together what to do with our earnings.
It's never too late to start investing/saving. Sung Hyun made his first deposit into a personal account, with only his name on it, last week. If saving money is on your list of things to do then start now! Because you don't have to be rich to start saving....
We will be sure to keep everyone posted with how it goes with a budget update next month.