People often ask me some version of the following question: “Where did you get this idea that you should live a debt free life? How did you, in a world where credit cards are ubiquitous and debt is the norm, decide that you were going to go against the norm?” People are curious about my lifestyle choice because it seems so foreign to most of them. The simple answer is: It came from my parents.
My parents paid cash for everything, except their home. New cars, Christmas gifts, furniture, you name it, it was all bought with cash. And they saved, both for the short term and the long term, setting themselves up nicely for their elder years. My parents were not wealthy, either, nor did they have high paying jobs. Dad worked and mom stayed at home. I had some cool toys and we took some good vacations, but never to excess. I heard the word, “No” a lot when I wanted something that wasn’t in the budget. We had a nice house in the suburbs and two cars. Just your average middle class family that knew how to budget, save, and live beneath their means. I grew up watching the example they set and it stuck with me.
But beyond setting a good example, my parents made sure that I understood that the comfortable life that I saw was not how they started out. By the time I came along, they had been out of school for several years. Both my parents worked until I was born, banking every extra cent for the future. They had already lived in the rat hole apartment while dad went on for his Master’s degree. They had already driven and sold the clunker car that required a kick every morning to start. They had already been through the phase of having no furniture and sleeping on a mattress on the floor because it was all they could afford at the time. When I came along, they were in a better place. They’d bought a nice house and some furniture. They had a better car. They had money in the bank and dad had advanced enough at his job that he was making more money. As I grew up, they were able to upgrade things even more and by the time I was in high school, they were able to send me to some great camps and on school trips that they could not have afforded without sound financial planning.
All I saw was the result of all that hard work. I only saw life in suburbia. I could have been forgiven, I suppose, for thinking that this was just they way things were. That everyone just got out of school and ended up in a nice house, in a nice neighborhood, with a nice car, and a good paycheck. But my parents made sure to tell me (and show me pictures) of how it was in the early days. They explained how they had stretched their dollars and saved for the future. They showed me how living low to the ground those first few years and not taking on debt had set them up for the secure and prosperous future they were now enjoying. They also made it clear that I could expect to do the same, because they would not be supporting me once I got out of school. It was an eye opening lesson, and one I’ll always be grateful for because it prepared me for the life I was about to enter, not the life I was about to finance.
If my parents hadn’t explained this to me, I probably would have gotten out of school, gotten a bunch of credit cards and set about trying to recreate that nice suburban life I’d left. And that wouldn’t be surprising. After all, who likes to go from the comfort of your family home to the crappy 500 sq. ft. apartment on the iffy side of town? But I was prepared for the lean phase of life. That’s not to say I liked it, but I was ready for it. I had an example to follow and I made the best of it. I didn’t take on debt and I went through the crappy apartment, the clunker car, the mattress on the floor, and the no TV phase of life. Gradually I upgraded things as I could afford them, all the while saving for the future, too. Today I enjoy much the same standard of living that my parents had when I was born. And let me tell you, I have a lot more respect for the time and effort it took for them to achieve it.
I think a lot of kids today don’t get that lesson. As a result, they aren’t prepared for the lean years when they go out on their own. They think that they will simply live as they always have, and that means taking on massive debt loads when trying to accomplish that on a first job salary. Many parents try to protect their kids by not telling them about their own lean years. They think that by not telling them of their suffering that they can magically make it better for junior. Like if they don’t say it, then it won’t happen. Either that or the parents themselves never learned the lesson and just financed their way to a better life. But not telling kids about your own lean years (or the screw ups you made in trying to avoid them) does them a disservice. These kids just grow up assuming that they will pick up where mom and dad left off, and they don’t understand that a “standard of living” has to be achieved gradually and with thought and effort, not via credit cards and loans.
Take the time to explain to your kids that you just didn’t magically wind up with a nice life. Explain the effort it took and show them how you struggled in the beginning. Teach them that a successful life is built slowly over time and not bought on time. They’ll probably roll their eyes and say, “Oh, man, not the story about kicking the car every morning again,” but if the lesson sticks and they go out on their own prepared to brave those lean years and build up a debt free life, it will be worth every eye roll.