Once Upon an Apple – Part Two

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There once was a little apple who didn’t fall far from the apple tree. This little apple, though not really realizing it at the time, intuitively picked up on many good spending and saving habits her parents had exhibited over the years.

Then, one day, on Little Miss Apple’s 16th birthday her parents handed her the keys to her very own car and a credit card.

Wait…THAT doesn’t sound prudent or frugal or wise on the parents’ part at all. Let’s dig a little deeper here (plus I’ll return to writing in first person).

As I was saying — on my 16th birthday —  I got a car, a red 1979  Ford LTD.  It was a BOAT —  for lack of a better metaphor, and before I owned it, it was my great-grandfather’s car.  Dad had a knack for buying used, well cared for cars from family members over the years. This was no exception.  Along with the car, my parents handed me my first credit card complete with my very own name on it. I still remember the feeling of exhilaration I felt holding that shiny silver card and lightly tracing over the letters of my name with my fingers.  What a thrill.

I was told the “rules of card usage” once. Only Once.  And from that day on,  I’ve been using credit cards appropriately.

Rule #1: the purpose of this credit card is for emergencies only – such as gas or a tow truck

Rule #2: you’re responsible for paying the bill – in full – every month

Rule #3: if you break rule #1 or rule #2 you lose the credit card

That’s it. Those were the rules and I followed them. I got a job and earned my own money and paid my bills. As a matter of fact I had the job before the car and credit card. I suppose that was my way of showing my  creditworthiness – as banks refer to it – or by definition the ability to pay back what you borrow.  Dad bought me the car and mom got me the credit card, but I paid for the gas and half the insurance payment (as long as I stayed on the honor roll, Dad paid the other half).  If Dad would have told me I was responsible for the full annual insurance premium, I would have paid that too, and he knew it. I guess that’s what mattered more than the actual cost.

The teenage driving years were good. I had a car and a job and cash for gas and clothes and social fun with my friends. I stopped asking my parents for money, though by now my mom had her accounting degree and was working for a firm full-time so their income had increased significantly. This bump in income gave my parents a nice cushion, but it didn’t mean their spending increased. It meant their savings increased (I could add a few exceptions to that statement here like my spoiled little sisters and brother – but I’ll save that for another day:) I noticed once my mom had a good paying job,  retirement savings increased and they began investing more regularly in the stock market and rental properties. Most importantly, they continued to live in their paid off little home with four of their kids.

I worked as many hours as the theme park allowed. I opened a savings account and started accruing money. Little bits at at time. I met my husband at my summer job when I was 17. He didn’t become my boyfriend though until I turned 19. And then we broke up and finished our college degrees at universities five hours apart from each other.  And then we made up. And then we got married. And here’s where I became Mrs. Money Apple and the story gets interesting…

Once Upon an Apple – Part One

There once lived a little girl who lived in a small town in southeastern Wisconsin. Her dad was a mechanic and welder for a world-wide waste disposal company in northern Illinois. Her mom was a homemaker for about ten years until she went back to school around age 30 and earned her accounting degree.

The reason for this tale is to teach you what the little girl learned from her parents. It’s important because frugality, responsibility and discipline aren’t learned in a day or a week or even a college course. These are lifestyle attitudes — modeled daily by parents — the most significant influence in their children’s lives.  We adopt these habits and attitudes through very little explicit instruction, instead internalizing learned behaviors and eventually making them our own.

Reflect for a moment about your own parents and memories of their interactions with money. How did they respond when you were out shopping with them at the store, and begged desperately to purchase something? What kinds of gifts did you get for your birthday? Christmas? What did they teach you about charitable giving? In short, how did they spend their hard earned money? What did they value?

I can tell you this. I am where I am today because my parents simply lacked the money to indulge their five children. Having no choice is sometimes a good thing. Back in the 1980’s there were credit cards, though I never saw my mom use one. My recollection of mom’s spending was her whipping out the check book for nearly all purchases. This meant she had no choice but to be careful with expenditures. If spending outpaced earnings mom would be left with a negative number on her register which was simply out of the question. So we’d do without, put stuff back on the shelf,  and buy only the necessities with an occasional splurge.

Fast forward for a moment to the 21st century. Even with so-called “credit card reform” –  plastic is still readily available and debt rampant. For most Americans, conspicuous consumption is difficult to get under control — especially for those who don’t understand basic math, or feel compelled to participate in “lifestyle inflation”.

As I mentioned above my dad had a “good” paying union job as a welder and mechanic. And by good, I mean he earned a livable wage that supported a family of seven’s basic needs with enough left over for a modest amount of savings and recreation. Mom stayed home for most of my childhood, though I do recall her peddling things like Avon or dabbling in real estate  to supplement the family income. The best part about this once upon a time tale is that I had a fulfilling childhood. Sure, I wore second hand clothes and rode second hand bikes and we drove around town in big, clunky used cars; but we ate good, smelled good, and took many memory-making, camping trips in the old, black Ford Econoline.

I never rode on an airplane until age 17, but you know what? It didn’t affect me adversely at all.  My parents gave us all happy childhoods on (for the most part) one middle class income.

Do you want to know what would have probably affected me adversely as a kid?  If my parents had projected their constant stress and bickering over money onto me. If they’d gone deeply in-debt trying to “keep up with the Joneses” and give their kids the life they never had…blah blah blah. I saw many childhood friends experience divorce, mostly because of their parents’ misery, regret, and inability to keep spending under control, no matter how much they earned. Now that’s sad.

Mom and Dad bought their modest three bedroom 1.5 bath ranch in 1975 for $35,000. My dad was a competent self-taught carpenter on the side, adding two bedrooms, a playroom and a rec-room to our basement over the years. In 1984 they put on a $10,000 addition to add a little more square footage to the homestead.  Sometime in the mid 80’s my dad had a little celebration. He called us all into the kitchen and announced the mortgage on our home was officially paid off. He made a point of educating me on the importance of this, but at the time,  I honestly didn’t give a shit. I was pre-occupied with other things in my life, like Jordache jeans and pet rocks. I remember though how important this event was to him and that’s why I remember it today.

But, it’s not about a one time event. I had many happy birthdays, lots of great toys like Cabbage Patch Dolls and Atari. My parents could afford, with careful budgeting and saving, just about anything, they just couldn’t afford everything. And by practicing frugality day after day,  Dad proved what small saving habits could compound into: an entire home – paid off – within ten years. Think it can’t be done in this day and age? Stay tuned.