My financial upbringing – a “short” history

Stacking Pennies recently wrote a post asking, “What have you received from your parents?” I’ve written before about the five money lessons I learned from my parents, but have never really given a full picture of my financial upbringing, if you will.

At the risk of being labeled a rich girl – which I never would have called myself until reading some of the experiences of other PF bloggers – here are all the details:

I was born and raised in Orange County, California, not the glamorous beach cities depicted on television, but in the suburbs in a town of about 60,000 people. My dad was a banker and while he wasn’t home a lot I know he was working hard so that we could have a nice home and standard of living.

Our nice home included a pool, tennis court and an acre of land to run around on. As a little kid, I thought it was cool but mainly because I loved playing in the pool or climbing the avocado trees in our backyard. I didn’t understand having these things was considered a status symbol. We were surrounded by other houses that had the same features, so this was “normal” to me growing up.

My parents sent me to a private Catholic school for first through eighth grade, although I think this was because my mom wanted me to be brought up Catholic and not because she felt the public schools imparted a lesser education.

At around age seven, my parents divorced and a lot of things changed, although not necessarily for the worse as many people might expect. My dad continued to live in the big house while my mom moved about a mile away to a house that was nice but more modest. This house had a pool and was perfectly nice, but compared to the house I’d grown up in I considered it modest at the time.

I lived mainly with my mom although I still visited my dad every Thursday and every other weekend. I remember times being tight in the early years with my mom since she quit banking to pursue real estate. In part, I think she did this to have a more flexible schedule with real estate, something that was important to her as a technically single mom.

One of my vivid memories from those years is a birthday (I don’t recall which one) where my mom took me out in the car and told me we were going to pick up my birthday present. I’d asked for new furniture for my room and the anticipation built as we drove to our destination.

Getting out of the car, I was surprised to see we were in front of a house and that my birthday present was a used set of girls’ bedroom furniture my mom had bought at a garage sale. I’m ashamed to think of it (and truly I have thought about this several times in the past), but I was so disappointed, almost to the point of crying. I realize now how much my mom struggled to keep things together financially in those early years, and I cringe at how ungrateful I was.

Despite being unimpressed with my garage sale birthday gift, I enjoyed the mornings my mom and I would get up and go to garage sales. We’d map them out together using the Pennysaver and her big Rand McNally map. For me, garage sales were like treasure hunts to find books and other trinkets. For my mom, perhaps they were more of a necessity than I knew.

After the divorce, my sister and I actually got to go on more vacations since my dad would take us on business trips or fun weekend outings. My mom would always take us to Yosemite in the summer and it was heaven…little did I know it was also an economical vacation option back then! I can’t remember one trip – whether with my mom or dad – where we didn’t get to bring along a friend. For me, that was just normal but talking to others since I’ve learned this was a pretty unique perk.

As a teen, my mom would give us $300 at the start of the school year and this money was intended to last us all year. She never gave my sister and me any direction on how we should spend it, but it was very clear there was no more coming if we spent it frivolously.

She also covered food, clothing essentials (i.e. socks, underwear) and other necessary expenses – and gave us a $5 per week allowance until age 14 – but anything related to entertainment, clothing or extras like eating out with friends was our responsibility.

To earn money for my plethora of wants, I babysat around the neighborhood, mowed my dad’s lawn ($10 for the back and $5 for the front – remember it was a huge frickin lawn!) and delivered real estate leaflets for my mom and step-dad at $.10 apiece.

When I turned 16, I hoped like every other teenager in the world that I’d get a new car, knowing deep down that the chance of that happening was slim to none. Let me illustrate: one day while my dad and I were at the grocery store he asked me if I wanted a new car…when my eyes lit up and I nodded eagerly he steered the shopping cart to the novelty aisle and told me to pick out a shiny new toy car. Haha dad. Funny.   

My parents could afford a new car, but they were never buying themselves the newest this or the flashiest that so I didn’t expect anything different for me. As a typical teen, though, I of course rolled my eyes when I was presented with my grandma’s 1989 Oldsmobile, but I was also just happy to have a set of wheels and I made the best of the situation by dubbing it the Granny-mobile and hanging necklaces/beads from the mirror to give the car a little flair.

I was responsible for 1/3 of my car insurance and all gas expenses. Which reminds me of another story…my dad forgot to tell me the gas gauge was broken in the Granny-mobile so I ran out of gas within the first few weeks of having the car. I felt like an idiot until noticing the gauge said the tank was still almost ¼ full! Yeah, funny again dad.

The first summer I had a reliable car, I went on the search for a job that would allow me a more regular paycheck. I have to admit I didn’t have high ideals and I was content working in a pizza parlor like my best friend.

My dad was not impressed with this idea and he told me he’d pay me the same amount I’d make at the pizza place if I got an internship instead. I’d expressed an interest in journalism so I wrote a letter to the editor-in-chief of the local daily newspaper and voila, I soon had an internship. And as promised, I submitted my hours to my dad at the end of each week and he paid me $7 for every hour worked at the newspaper.

When it came time to apply for college, I don’t know why but I had big dreams of going to school out of state. I applied mostly at out-of-state schools, with three state schools thrown in somewhat grudgingly for my parents as “just in case” options.

At the beginning of the process, my parents were up front about what their contribution would be: $7,500 annually from my dad and $6,000 from my mom. Anything above and beyond would need to be covered by scholarships and student aid. With out-of-state tuition at most of the schools being well above my parent’s entire contribution amount, that narrowed down my college choices considerably.

Which ended up being a good thing in the long run! The state school I selected had a great reputation and a good journalism department. Plus, although I’d originally wanted to go out of state I liked being close enough to my parents to drive home on a weekend but far enough that I didn’t have to worry about them showing up on my doorstep.

The first year in college, my mom handed me a check for $6,000 while my dad paid for my full year’s tuition and my dorm/meal plan, which came out to about $5,500. I also applied for and received a student loan for $3,000, so I didn’t end up asking my dad for the additional $2,000 he’d “promised.” Each year after that, he paid the full amount in one check.

During my first semester of college, I found myself bored after classes so I sought out a job and found an ideal situation working as a receptionist in the student government office. Honestly, this was the best job ever because my bosses were students themselves and they were fine with me doing homework when it wasn’t busy. I was only allowed to work 20 hours each week (per school rules) and I was paid just a little over minimum wage, but it was a great way to earn extra money.

In my junior year of college, I wanted to buy a more youthful car so I appealed to my dad for a loan to help me get rid of the Granny-mobile in favor of a used Ford Mustang. He loaned me $6,000 and put me on a re-payment plan without interest. I paid him back faithfully every month until graduating at which point the remaining balance was close to $2,500. Around that same time I received my first student loan bill and a light clicked on in my head.

Looking back, this was maybe a little presumptuous of me, but I brazenly reminded my dad he hadn’t contributed the entire amount he’d promised during my first year in college and told him the remaining balance of my student loan was about equal to the amount I still owed him on the car. I considered it an equal trade and my dad didn’t put up a fight. What do you think, was that wrong of me?

The year before I graduated college, I studied abroad in London. My parents had some concerns about the costs but I assured them I could make it work without having to borrow additional money. Maybe  I underestimated the exchange rate or maybe I had a tad bit too much fun, but either way I spent most of my money for junior year and ended up having to charge a lot of stuff during senior year to make up for it.

I graduated with about $4,000 in credit card debt, $3,250 in student loans (although my car was now paid off!) and without a job even though I had a high GPA and three internships under my belt. Several employers expressed interest, but the answer was always the same: “we’re in a hiring freeze.”

For about a month, my mom let me live at home for free as I sent out resumes and went on interview after interview. My search area was small since I wanted to stay in Orange County and I found the lack of responses frustrating. One day, though, I was sitting on the couch reading a book and she laid down the law.

She told me I needed to get a job and I immediately broke into tears, sobbing about how I was trying and how I’d done everything right in college but the economy was making it impossible to find employment. She sympathized, but ultimately was unmoved and told me if I couldn’t find a job in PR/journalism then I needed to look elsewhere.

After I pulled myself back together, I headed to a temp agency. Luckily, within a week I finally received a call back from one of the PR agencies I’d interviewed at, saying they’d gotten around the hiring freeze and they wanted to bring me on full-time. I made $26,500/year and continued to live at home rent-free for the time I was there.

For the most part, though, I paid for my own food because a) my parent’s had gotten a social life while I was away at college and they were out many evenings and b) I preferred eating what I wanted rather than what my mom wanted to make.

I worked at that job for a year until a new opportunity presented itself, one that would take me up north to work at a national park doing PR. I jumped at the opportunity and for the time I was there I supported myself entirely on my own.

Looking back, I really should have saved a heck of a lot more since I was making a very nice salary and paying approximately $200 a month in company subsidized rent (which included utilities), plus getting 50% off most food and beverage and barely driving my car since I walked to work in the morning. My friends and I made up for the fact we lived in a national park, though, by spending money on other luxuries so I had little to show for my time there.

After three years, I was ready to move back to “civilization.” My mom was thrilled to have me back in Orange County but she made it clear I would pay rent if I wanted to stay at her house. No problem, I found the $200/month she charged me very reasonable and it helped me get along in Orange County with my lower-than-expected salary and higher-than-expected expenses.

I was only in Orange County for a few months before my current employer came calling. They wanted me to move to Texas to work as their PR director and I jumped at the opportunity because I didn’t like my OC job and it would be a big promotion in terms of prestige and salary.

Moving to Texas at age 25, I was completely on my own financially for eight months until my dad and step-mom came to visit and convinced me to look at the possibility of buying a house. Texas real estate, at least compared to California, was incredibly inexpensive and after running the numbers, I took the jump.

I bought a house in the low $200,000s with help from my dad on the down payment. He kicked in $45,000 with the understanding that I would pay back ½ of this – plus $100 per month in interest (5.333%) – within five years. The other ½ I would have to pay to my IRA or 401(k) with the full amount having to be accounted for also within five years.

Although some may be surprised that my dad charged me interest, this was much lower than my 6.25% interest rate and I know of no loan company that would basically forgive half of a loan! I actually paid off all of the interest-bearing part of the loan in less than three years so this ended up being much less than a traditional loan. Besides, with compounding interest on the IRA contributions, I’m sure the interest will be more than paid for over the years.

I will mention, the $100/month in interest remains in a joint checking account we have together despite me repeatedly offering to write my dad a check. The thought’s crossed my mind that he may just let me keep this money, but I’m certainly not counting on it and I consider $2,700 a small price to pay for owning my own home.

In terms of vacations, there’s no set expectation of who pays for what although I do like to treat my family every once in a while and vice versa. When I went on vacation last with my mom, I expected to pay for my part of the accommodations, but when it came time to write her a check she waved it aside.

And another example, in 2010 my dad and step-mom want to take the family to Africa and they’ve said they would foot the entire $10,000-$12,000 bill. However, I want to contribute and I’m currently saving money for that purpose. Will I write them a check outright or just throw out my credit card on a couple dinners/excursions? I don’t know, but it’s important to me that I show them I don’t take their generosity for granted.

Speaking of, I always pay nowadays when I fly from Texas to California to visit my parents. There was one time my parents wanted me to come out to my brother’s Eagle Scout ceremony and the airfare for that specific weekend was running $500+. They offered and I let them pay for my airfare that time because it was outside my travel budget and the trip had to be that particular weekend. Otherwise, I figure if I want to see them, then I will pay for that pleasure.

My sister, on the other hand (who by the way is two years older than me), still expects them to pay for part or all of the bill if she comes to visit. For Christmas, my dad and step-mom paid for her and her boyfriend’s flight. Does it annoy me? A little, but more so because I feel like my sister takes advantage of them and not because I feel like my parents should be paying for me to come visit too.

When I am visiting, usually they take care of everything but I try to pitch in, even if it’s in much smaller ways. For example, offering to do the morning Starbucks run or to grab something at the grocery store, or sometimes picking up the family dinner tab. My step-mom always offers to repay me but I don’t mind at all since they’re generous in so many other ways.

Now that I own a house and I’m saving towards a new car, I don’t anticipate having to turn to my parents again in the future for a loan or any other type of financial assistance. But, I do know if I ever found myself in dire financial need my parents would step in and help me out. It’s comforting but I hope to never find myself in that position.

Phew, that turned out to be much longer than I intended and I apologize if I rambled on there a bit. I have to say, I found it somewhat cathartic to write it all down and if one day my parents come across this, I want them to know fully how much I appreciate and feel blessed to have them as parents.

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