‘The thought of how much money I have wasted makes me sick’: Trying to set my daughter up better than me. How can I teach her to be financially savvy from a young age?

Hi Money Minder,

Man, thinking about all the money I’ve wasted over the years really makes my stomach turn. Let me tell you a bit about where I’m coming from…

I was born into poverty in a small rural town in the southeastern US, then adopted into a poor family. This town had only one factory, providing jobs for 60% of the population. Everyone was struggling financially and had no idea about money management. Growing up in that Georgia heat was tough – no air conditioning, just one gas space heater, and no shower, just a shared garden tub that my mom heated water for on the stove. And this was all in the 80s…

After high school, I joined the military to escape and find a better life. But no one ever taught me about saving and investing. I grew up thinking being rich meant wearing name brand clothes, not from Walmart. I thought as long as I paid my bills and had stuff, I was doing okay.

Now in my 40s, I look around at all the stuff I’ve bought and the debt I’m in. It’s not crazy debt, but I can’t help but wonder where I’d be if I had invested and saved properly all this time.

I have a military retirement, a regular job, my wife has a good job, and we’ve got a small rental property that’s fully paid off. We’re working on paying off the house, car, and credit card debt.

So, given all that, what advice would you give to someone in a similar situation just starting out in life? Where should they put their money and how much should they be putting away?

Farewell,
Riches in the Making

Response from THE MONEY MINDER:

Hello There,

I acknowledge the challenges you have faced and the realization of how much money has been wasted can indeed be disheartening. Your story of upbringing and lack of financial education is unfortunately all too common, but the fact that you are now reflecting on your financial situation and seeking guidance is a significant step towards a more stable financial future.

Given your current circumstances with a military retirement, regular job, a rental property, and ongoing payments towards the house, car, and credit card debt, it’s essential to prioritize your financial goals strategically. Firstly, focus on eliminating high-interest debt like credit card balances to reduce unnecessary financial strain and interest payments.

Considering your stable income sources, it is advisable to set up an emergency fund to cover unforeseen expenses and avoid falling back into debt. This fund should ideally cover at least 3-6 months’ worth of living expenses. Once this emergency fund is established, you can start allocating money towards retirement savings accounts, such as an IRA or a 401(k), to secure your financial future.

In terms of investing, diversification is key. A well-diversified investment portfolio can help mitigate risk and potentially maximize returns over the long term. Consider consulting with a financial advisor to create a customized investment plan tailored to your financial goals and risk tolerance.

In conclusion, it’s essential to strike a balance between paying off debts, building savings, and investing for the future. By adopting a disciplined approach to managing your finances and seeking professional advice when necessary, you can work towards achieving financial stability and security.

Farewell from THE MONEY MINDER.