Photo Credit: money.msn.com
By Erika McDaniel
I have had the pleasure of teaching a Fiscal Responsibility and Personal Wealth workshop for a number of organizations. In addition to sharing tips and tricks to help with saving, budgeting and financial planning, I also share a number of stories about my own personal misadventures in money management. The lessons that stick with us are often some of the hardest to learn. That was most certainly the case my freshman year of college.
The year was 2001 and I was a wide-eyed freshman at the most
prestigious university in all the land, Howard University (and no, I’m not
biased at all!). As my parents were about to head back home to Ohio they
pulled me aside and handed me a check and gave me some very specific
instructions. I was to take the check to the First Union Bank (those
don’t exist for anyone who wants to age me a tad more) just off campus and
set-up a checking account. That money was to last me for the entire
semester. In theory, it really shouldn’t have been a problem. A
semester is about 15 weeks or so, right? The money should easily be able to
stretch that far for a kid who had no car on campus (so no gas), a meal plan
(so minimal dining expenditures), no cell phone plan (this was prior to my
parents kicking me off their plan), no rent (on campus housing) and no real
responsibilities. Heck, I didn’t even have to pay for my books!
The money should have gotten me through the entire
semester. But it didn’t.
You may or may not know that Howard University is
consistently named as one of the most fashionable college campuses in the
US. And D.C. is full of fun (and sometimes expensive) places to
eat, drink, socialize and shop. And
every HU student needs to be dressed down in cute gear from the bookstore –
especially for the first football game. There’s the Howard-Hampton game
and do NOT get me started on Homecoming! Soon – I found myself more
concerned with keeping up with the Jones’ and less concerned with keeping up
with my bank account. Before I knew it, I had blown through that money!
And I still had most (like way more than half) of the semester left to get
through.
With my tail between my legs I had to call my parents and
explain that I had blown every bit of money on clothes, shoes, restaurants, and
I don’t even remember what else. I then had to ask them to send me more
money. To my delight they both said “yes!” And then my
parents dropped a nugget of reality on me – I would be responsible to pay back the money with interest.
Not unlike a bank or credit card company, my parents were willing to give me a
loan but they wanted their money back . . . and then some! My own
parents! Charging me interest! The horror! Every two-weeks,
when I got paid from my summer internship, I would send home a check to my mom
and dad. It took the entire summer to give them their money back plus
interest.
12 years later and that is a valuable lesson I will never
forget. It was painful at the time, but taught me to think once, twice,
sometimes three times, before using a credit card or taking out a loan.
Credit cards and loans are going to be a part of our lives - whether it is a
student loan, mortgage, car loan or emergency credit card. The best way
we can make sure we make smart and responsible fiscal decisions is to learn about
them early, understand how they work and use them responsibly. Hopefully,
you’ll learn from my experience (and get a good laugh) and consider how you’ll
manage your own finances when you’re responsible for them in college and
beyond.
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