How I’m Correcting My Financial Illiteracy

If I could go back to my early twenties, this is what I would say to help change my perspective on money.

The first time my then boyfriend, now husband, and I discussed our financial situations was one of the most embarrassing moments of my entire life. The conversation happened after we had been dating for about three months. Things were progressing fast — we had already said our ‘I love you’s and were making plans to move in together. We were completely starry-eyed and in love as we began to plan our lives together, so I had no reservations whatsoever about laying bare my financial history.

Now I’d always known that I wasn’t the most fiscally savvy person. But I wasn’t aware of how much I didn’t know until Matt looked at my debt and complete lack of savings with genuine shock (he actually gasped when I told him how much I owed in student loans). As the conversation progressed, Matt’s incredulity grew with every layer of debt I uncovered — and my anxiety did as well. By the time we reached the ill-advised store credit card debt I had accumulated post-college, Matt was exasperated and I was so embarrassed that I stopped the conversation completely and stormed out of the room. For a while, that is how a lot of our conversations about money ended.

I’ve always considered myself to be a well-informed person, which I why the depth of my financial illiteracy was such a hard pill to swallow. I had no idea what I didn’t know and it was incredibly frustrating trying to catch up. Matt and I would start a conversation about money, but every time he shined a light on an area of my fiscal ignorance, I immediately would get defensive. Acknowledging bad money habits was like admitting a personal shortcoming that I couldn’t fathom as truth.

 

I’ve always considered myself to be a well-informed person, which I why the depth of my financial illiteracy was such a hard pill to swallow. I had no idea what I didn’t know and it was incredibly frustrating trying to catch up.

 

My entire adulthood, I’d never had any issues taking care of myself. I had just started what I thought was going to be my career, and I was making enough money to cover my bills and buy a few extras. I would occasionally make half-assed attempts at savings, but those funds were inevitably depleted by the end of the month. To me, that was enough because I honestly wasn’t thinking further than the next paycheck. When I met my husband, he forced me to reckon with my financial future. I had to face the disservice I had done to myself by being uninformed.

Money habits are learned in the home. And despite the glaring disparity between my financial knowledge and Matt’s, we actually come from similar economic backgrounds. We’re both from middle-class families and we both grew up in suburbs in the Midwest, we both went to decent schools, and we’re both from dual-income households, with our father’s salaries covering most of the bills while our mothers provided supplementary income (actually both of our mothers were teachers). But where Matt is a from a white family that benefited from a history of smart financial decisions that allowed the wealth to pass through generations, I’m the daughter of an African immigrant and a black woman from the south. My family’s entire financial history starts with my parents. Though seemingly insignificant, our racial backgrounds have contributed to our access to financial knowledge.

The generational wealth my husband grew up with allowed him to pay for college outright and also provided him with access to things like credit unions, CDs, company stocks, and investments. Before he married me, his credit score was 804 and he was only 24 years old (mine was 565). Unfortunately for me, generational wealth wasn’t something I had access to or even knew existed. My financial knowledge was accrued via woefully inefficient high school math lessons and anything that was gleaned by observing my parents. And I implemented what was taught to me.

 

Acknowledging bad money habits was like admitting a personal shortcoming that I couldn’t fathom as truth.

 

First and foremost, as the daughter of an immigrant, you don’t talk about money. Offhand comments about being broke or being excited about payday are fine. But any more revealing information is off-limits. Secondly, you always take care of your family. To this day, my father sends an unknown amount of money to our family in Ghana every single month. Next, pay your bills. Sometime you may need to stagger payments here and there (my mom calls that financial gymnastics), but make sure they get paid. And enjoy your money while you have it, because you can’t take it with you. My mom’s frequent refrain is that if you work hard and make your own money, you deserve to buy things you want.

Now, all of this isn’t inherently bad advice — however it isn’t a foundation on which you can build long-term financial success. The extent of my financial knowledge was how to stay afloat. Hence why I considered it a successful month if all of my bills were covered and I was able to buy a new purse.

I’m older now, and the further I advance in my career and the more money I make, the more I worry about our financial future. I’ve matured enough to be nervous that one day I’ll look back on my life and realize I’ve spent every penny I earned. But now that I have a sliver of access to white privilege, I’m going to use it. Matt is a smart man, he loves money, and has had access to resources I have not. He’s the reason I finally started my 401K and he is the reason we have a savings account that I contribute to (irregularly).

I do still struggle to listen to my him when he talks about money. My knee-jerk reaction will always be to shut down or get defensive. And my eyes still glaze over if he mentions anything more complicated than a debit card. But Matt and I have been together for four years and married for five months. In that time, we’ve lived in three different apartments together, almost bought a house, planned a wedding and a honeymoon, and bought a dog, all while not depleting our savings or falling into massive debt. These are small victories, but I couldn’t have conceived them a few years ago. We have a common goal, so I choose to look at every complicated situation we encounter as something that will bring us closer as a couple and provide me with opportunities to absorb some of his financial acumen.

 

I’m nobody’s financial guru. But, if I could go back to my early 20s and impart some knowledge onto myself, this is what I would say to help change my perspective on money.

 

Your value as a person is not determined by how you manage your money.

Sometimes capitalism sucks. We live in a capitalistic/class-based society, which means we associate financial success with moral integrity. But having access to money and being fiscally savvy doesn’t make you a good person. And alternately, not having money doesn’t make you a bad person. But when Matt said that I was bad with money I perceived it the same as if he had said that I was stupid and a bad person. That’s why our first money conversation and subsequent conversations went so poorly. And that’s why it’s important to divorce those ideas from each other. Because once you realize that money management is a skill (like swimming or baking) and not a trait (like smart or good) it’s an easier topic to tackle. Sure, some people have greater access to financial knowledge, but no one is born with the innate ability to handle money — it’s learned.

 

Money management can be cultivated like any other skill.

When I was in college, I decided I wanted to learn French, so I signed up for an introductory French class. A few weeks into the semester I realized that I wasn’t good at French, and I also didn’t care that much about it. But instead of dropping the class and chalking up as lost, I buckled down and did the work. Was I ever going to be fluent in French? No, not a chance. However, I did pass the class. The same idea can be applied to learning about money. Am I ever going to be a trader on Wall Street or an accountant? Absolutely not. But I can buckle down, find some resources, and learn about personal money management.

 

Financial literacy is more than just paying your bills.

The reason it took me so long to realize I wasn’t financially literate is because I was doing fine with what I thought was money management. But true money management is more than making ends meet. It’s about investing in your future. In my early twenties, my future was not something I was worried about (obviously, at the time I was chain smoking and binge drinking every weekend). My short-term money goal was to upgrade my wardrobe and invest in a nice collection of purses. My long-term money goal could be summed up to finding a large bag of money. I’ve since reassessed those goals as I approach my thirties. Now in the short term, we want to buy a house, and in the long term, we want to have one million dollars in a retirement account by the time we’re 65.

That doesn’t mean I’m not still buying things I want. I’m my mother’s child — I’m always going to be out here shopping. Now I’m just less likely to drain my savings to buy a Kate Spade bag, no matter how badly I want it. It’s all about balance.

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