My mom was a single mom in Cameroon. She didn’t have much money, but whatever she did have, she used it wisely. Whenever I wanted something that we didn’t have enough money for, she always explained that we needed to use the money for things we needed, not for things we wanted, and we weighed what we wanted against the cost of other things we wouldn’t be able to do such as be able to pay for another school tuition. It put things into perspective. I never felt bad about it, I saw how she worked so hard to earn money so she could take care of us. She never chose spending on herself over us.
I went to live with my grandma, aunt and cousin when I was six. My grandpa had already passed away, he and my grandmother had worked hard to make sure their kids went to school. We never had a specific talk about money, but there were plenty of lessons for me as I grew up. Just like my mom, she always explained why we couldn’t spend on certain things. My aunt would make us earn money instead of just giving it to us. Sometimes, I had to make bricks for it. I always heard that I have to find a way to earn it, and we participated in all the chores since we understood that each of us needs to do their part.
I was given an allowance, and could choose to either spend or save it however I wanted. I always found ways to save; for example, if I had extra food leftover from dinner, I saved it for my lunch at school the next day and didn’t have to pay for more food. What I saved I placed into my wooden cube coin box. I would save the money for our national youth holiday where we would spend on things we didn’t usually get like pastries, juice and yogurt. It was a tradition for all the kids in my family, and each year we promised ourselves to save more money for the following year
What did you learn about money growing up?
At age 15, I moved to the US with my dad and stepmom. I would say I had more money lessons from my dad. Though he wanted me to focus on school and not work, my first paycheck was when I was 16, $25 for teaching adults how to use the computer. My dad took me to the bank and opened a savings account for me to deposit it in, and every time I had a paycheck, he always took me to the bank to deposit it. He always said, “Your money looks better in a bank.”
When I first moved to the U.S., he had very little debt except for a mortgage for our house and maybe a loan to buy a car, but he always said that one should pay the balance of their credit cards right away so that interest doesn’t pile up.
He also told me it’s best to save and buy your own place rather than waste so much money on rent. “When you rent, you’re paying someone else’s mortgage,” he would say. This is why my dream is to own my own place. He was super good at saving so I learned that from him. I have never seen him splurge on anything, but he spent well on our food and education. Before I took my first job when I was 17 or 18, he used to give me an allowance for the week; I would either save it or send it back home to support my mom and the rest of my family there.
When you went to school, how confident did you feel about money related issues (debt, saving, etc…)? Did you have a plan?
I felt confident starting school. My dad paid for my undergrad, so I didn’t have to worry about it. I was working on campus and saving a little bit. I didn’t really need to work, but I wanted to be independent and to pay for my own MetroCard and lunch at school; whatever I had left, I sent some back to Cameroon and saved some.
I left my parents’ house when I had two semesters left to go. I needed money for an apartment, so I took a cash advance on a credit card which I also used to partially pay for my last semester. I applied to grad school right away, and since I couldn’t afford it, I also applied for a student loan. I was pretty confident about getting approved, and I did, easily. I was teaching at the time and not making much money, so I ended up taking a higher loan to survive and in in case I didn’t end up working as much so I could focus on my school work.
If I knew then what I know now, I wouldn’t have taken out loans. I stopped working when I was in grad school, and had to send a lump sum of money to my sister who was having a crisis. I had three credit cards, student loans, and fell into the vicious cycle of not being able to pay off my debt. Part of it was my fault too, I used a credit card just so I could go to a cousin’s wedding in France; that cost me a few thousand dollars.
I remember the moment I decided this has to be fixed: I had started working at Equinox as a personal trainer and needed an iPad to track my clients’ routines and plan their workouts. I went to Best Buy to get one; they had a credit card offering, so I applied for it of course, since I couldn’t afford it… but I was rejected. That really hit me hard. I went home devastated and crying, I couldn’t believe I was denied and how bad it was. I was paying all my minimum payments, but I felt I was stepping forward onto the same spot and wasn’t moving.
Luckily, things started picking up at work, so I decided to pay off one of my credit cards. Since I get paid bi-weekly, I chose to use the first paycheck of every month to pay off my credit cards and the second one to live off. The first time was so painful, but the following month I didn’t have to pay for it and I felt so good. That pushed me to keep paying off everything else. Every month, I paid all my needed expenses and whatever I had left, I used to pay off credit card debts. I was living on about $750/month, and paid off $10,000 in debt in 13 months I was credit card debt free!
I couldn’t save anything at the time, especially since I was still sending money back home; but, I literally started saving last year and I was able to accumulate some savings in one year. It could have been higher, but I decided to pay off a big chunk of my student loans.
Where are you now with your saving habits? What do you do well, and how might you want to improve?
I looked at how much I was making, spending, and what was left over, and I decided on a specific goal amount I wanted to save by the end of the year. For me, that is my dream, the amount I needed to reach before I could buy a house. I saved whatever I could.
The best thing I did was that I split my pay check in half, to automatically go into two accounts (checking and savings). Sometimes things come up I have to dip into the savings, but it doesn’t happen so much.
I am not sure I have a good understanding of where I am in my savings and where I should be in general. I want to learn how to invest so I can buy a property. What I do know is that I don’t splurge, and I haven’t yet reached my savings goal because I care for my family and send them money. I wouldn’t say I’m bad at it, it’s just something I could use more structure for and to get more educated about. I don’t know what I am missing, but I know I’m not where I want to be.
What drives me is goal setting: When I set a goal, I do everything to reach it: I do my best to pay more than minimum balances to avoid paying extra charges and I don’t eat out often, I cook at home instead. I never tried to quantify how much that saves me, but I am sure you could find yourself spending $30/day for food in NY! Cooking at home, I could maybe stretch it to last 3 days. I also compare things I want to spend on to what my mom and siblings could use it for back in Cameroon.
If you have a daughter what is the first thing would you want her to know? Other things?
I would want my future daughter to learn that she needs to earn money. When you earn something, you spend it wisely. You learn the value of something by earning it.
I also want to teach her the importance of saving. When you save, you can have a decent life if you spend your money wisely. Because I don’t spend my money on partying or eating out like many of my colleagues, I can still put away enough for me to be able to travel and enjoy my life while saving and taking care of my family. It’s all about priorities. Start with what you need and then what you want.
Share your #1 savings tip.
Other than splitting paychecks automatically, I always try to pick the brains of my successful clients and friends to learn how people invested or saved. It motivates me to want to do better and give a better start for my future kids. People encourage me, it really keeps me going. You’re not going to learn unless you ask.