First-gen financial literacy
When I get my first job after I pass the bar, I’m going to make more money than my parents ever have. It’s an incredible accomplishment and a testament to their sacrifice. Yet, since my first paycheck at fifteen, I’ve never learned how to set money aside “responsibly.”
My first job
My first job was at El Pollo Loco which was a ten-minute walk from my home. I got the job because I did what my parents told me to do: walk in and ask if they were hiring. I had already done this at several other fast-food chains within walking distance and getting promptly rejected. I remember joking with my friends that I couldn’t even get hired at McDonalds. This time, I was rewarded for my “persistence and grit.”
My parents encouraged me to get a job but they insisted that I wouldn’t be helping with bills or giving any portion of my paycheck to them. I know I could have helped but they didn’t want me to work for the sake of money. To them, a job meant learning responsibility and sacrifice. It meant that I wouldn’t be able to hang out with my friends whenever I wanted because I was scheduled for a shift. It meant that a movie and a dinner literally cost “two hours of my time.”
I learned the value of time management and responsibility soon enough, but I didn’t know what to do with the money coming in. My parents were focused on keeping us in school and keeping food on the table. I asked my older sister for advice and she told me to “just spend it on what you want.” So that’s what I did.
Poor habits
My dad helped me apply for my first Discover credit card when I started college. I could use the card to front the costs for textbooks, class registration, and anything else I might need. He instructed me to pay off the statement balance in full every month but didn’t explain why. At that point, I didn’t know what a credit score was and I was already in the habit of spending money on whatever I wanted.
Eventually, I just tried submitting a minimum payment on my credit card bill and waited to see if anything would happen. The bank accepted the payment and sent me a bill the next month with another minimum payment due. I was so excited that I thought I had hacked the system. I didn’t tell my dad because I would technically be disobeying him but he never asked about my bills so I didn’t feel the need to tell him. If the bank didn’t have a problem with it, why would he? I wasn’t living in poverty but after reading excerpts from Hillbilly Elegy, in hindsight, it really felt as if I was always planning what to buy with my next paycheck.
Today, I know what a credit score is and how stupid I was for thinking I had figured out a loophole. But for a lot of students like me, the idea of a credit score was so intangible; I needed to “build up” my credit score? Why? I’m just an undergraduate student making minimum wage. If I need to buy a car or a home, I’ll worry about it when I’m making more money.
I think this is a big struggle for a lot of first-gen students like me; we never experienced the benefits of accrued wealth. We are more likely to graduate with debt and much more likely to drop out of college. It’s difficult to convince myself to set money aside that’ll be a boon to me 40 years later when right now, my student loan debts are going to compound on itself every single month. The ever-present problems that have stood before us our entire lives built poor habits and the costs of social mobility makes it even harder to break these poor habits.
One step at a time
Financial literacy is an ongoing process, especially when you don’t have a safety net to fall back on. After having worked full-time, I’m still learning. I read Dave Ramsey and I asked financially literate people around me. I’ve learned how to create a monthly budget, I try to contribute to my ROTH IRA and retirement savings, and I’ve slowly repaired my credit score.
Now, I’m confronted with the fact that I’m going to have a salary that eclipses my parents. I’m going to have the luxury of setting money aside but I’m constantly worried that I’m making a mistake. I’ve resolved to take it one step at a time and to not stress over money I don’t have; an odd reversal of the poor habit of spending money I didn’t have.