Growing up my Dad got me into personal finance probably around the age of 12. I intend to do the same thing with my kids. He opened a kid checking account for me at Bank of the South (now owned by Pinnacle). A lady named Mrs. Adeline worked there and took care of us quite well.
Here I was, 12 years old and I had a checkbook and a statement showing up each month. My dad showed me how to write checks, how to balance a checkbook and, really, how to think about money.
I can still remember being off by pennies a couple of months and him helping me walk through how to find it.
Fast forward a couple of years and he helped me take out my first car loan… again with Mrs. Adeline. I think it was for a 1994 Jeep Cherokee that I bought and sold before turning 16 or it might have been for the 1994 Chevy S10 SS that we bought from my Uncle Doug. Side note: I miss both those vehicles and would buy them again in a heartbeat.
He started to teach me how to create a budget and he emphasized the universal statement of “spend less than you make”.
He’d have me break down…
- What goes to the loan?
- What goes to gas? (the most important thing to me as a 16 year old…)
- What goes to food?
Above and beyond all that, he instilled a critically valuable concept -> “If I could go back in time and start over again on my financial journey, I’d live on 80%.”
I’ll say it again “live on 80%”.
That is, by far, one of the best things he’s ever taught me on Finance.
Once you start making a salary and start buying a home, car, extra things… it becomes difficult to reign it back in.
For my dad, he was instructing me:
- Look at your gross (Total before taxes) income.
- Give back 10% of that (for us, that’s our tithe to our local church)
- Give 10% to your future self (401k, Savings, etc.)
- Live on 80% of that (bills, groceries, insurance, life stuff)
Dave Ramsey teaches “give every dollar a purpose” and if you connect both these concepts together – you can start out your professional journey with an invaluable approach to managing your money better than most Americans by applying these two principals.
1. Live below your means (80%)
2. Give every dollar a purpose (assign it to budgets/categories/etc.).
My encouragement to you as you continue your internship (or your ongoing careers) is to start out living on the 80% and giving the other 20% to others or to your future self.
An aside on Tithing (10% to Church) – my dad was big on Malachi 3:10, where God says “test me in this” (NIV) and he (my Dad) sees it as a promise. Not prosperity gospel but on the basis of faithfulness that God time & again says He will take care of you.
Malachi 3:10: Bring the whole tithe into the storehouse, that there may be food in my house. Test me in this,” says the Lord Almighty, “and see if I will not throw open the floodgates of heaven and pour out so much blessing that there will not be room enough to store it.
Luke 12:24 –Consider the ravens: they neither sow nor reap, they have neither storehouse nor barn, and yet God feeds them. Of how much more value are you than the birds!
I know a good amount of people who profess to be Christian but then don’t prioritize taking care of their local community. Feeding the hungry, taking care of the widow, taking care of children. They spend all their money on themselves, fancy things, experiences. I’m not saying that I don’t do that same thing sometimes. I am just emphasizing that it is very difficult to prioritize church & community and that it takes intentionality. I hypothesize that starting early makes it simpler.
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