Wednesday, November 28, 2007

My big money mistake and how to avoid it

The Canadian Capitalist is running a contest in celebration of his third year blogoversary. He’s offering some truly snazzy prizes. Go check it out and recall your own biggest mistake for him. We’ll all learn from it.

My biggest monetary mistake was taking eight years to graduate from university. Yep. Eight. Impressive, no?

Why did it take me eight years? A combo of reasons, the first of which is going to sound arrogant as hell. Apologies in advance.

I’m an intelligent person. It doesn’t always show (this being a case in point), but I score highly on IQ and other aptitude-type tests and breezed through most of my school years with no trouble at all. I never learned how to study because I never needed to. My parents never noticed the deficit. I was getting As, clearly I was doing all right.

My grades started to fall in my upper high school years as the work got harder. Sadly, this corresponded time-wise with my highest levels of teenage insensitivity and angst, so I didn’t even try to figure out what was going wrong. Consequently I still got into the university of my choice, but I didn’t get the scholarships my earlier marks would have assured me. Financial mistake #1: Not realizing the potential savings four years of free schooling would have provided. Luckily for me, my parents were prepared to pay for my first two years, and I had enough saved up to cover the other two.

Enter first year. Become overwhelmed with entirely new level of expectations and knowledge. Still fail to learn to study. Ergo, fail first year.

I made a substantial effort to learn more (and drink less) and scraped through my second year, earning the credits needed to pass the first year and ending the suspension the university had placed on me for failure. But I still had no study habits or methods that I could apply regularly. Financial mistake #2: Not taking full advantage of half a free education.

Then I got married. Hubby and I moved into our first apartment. We both went to school that year and scraped a few credits out between us. Seemed Hubby had the same problems I did, for similar reasons, only he wasn’t draining his savings, he was chewing through student loans. Financial mistake #3: Wasting my own money on an education I wasn’t paying enough attention to, and allowing us to become saddled with more debt than was necessary.

I spent the next two years going to school part-time and working full time in an effort to keep us above water before taking a year off to 'rest' (from school, not work). Hubby went to school and advanced slowly, graduating in computers just in time for the crash. Suddenly the streets were filled with out-of-work programmers who had way more experience and knowledge than he did. He ended up working at Timmies...not the most lucrative of positions.

I finally went back to school full time where I was fortunate enough to meet two important people. Erica was gregarious and naturally brilliant, and spent every spare moment sucking up spare knowledge and learning everything she could from everyone around her, be they biophysics professor or homeless man, because to do otherwise was a waste of time to her. Penny was not as quick at picking things up and not as brave, but she worked like a pack mule until she understood everything she needed. I learned to love learning for the sake of it from Erica, and I finally learned how to study from Penny. Together they were unstoppable, and after three years I finally graduated with an excellent upper year average.

Hubby went on to take a three year college diploma in computer engineering, which he worked very hard at. Guess he learned to study somewhere along the way too. I eventually landed a research position at a non-profit, and he recently started working for a now-recovered software company.

Financial mistake summary: In total I wasted four years of my life and ended up with a $4000 student loan and an $11,000 line of credit. We also had $22,000 in Hubby’s student loans to pay.

Couple of geniuses, that’s for sure.

Things you could learn:
1) If you’re good at something, you can always become better.
2) Don’t under-appreciate other people’s generosity, be it institutional or familial.
3) Make sure your children value and nurture their gifts as much as is possible, be they academic, artistic, athletic or otherwise. Ensure they’re not bored or coasting through life without effort. It’ll bite them in the end.
4) Watch the spending, particularly when your income is slim to none.

Any lessons in there that I missed?


Canadian Capitalist said...

Thanks for your post on this topic. This is the first time I discovered your blog, so let me add to the "congratulations". It's a lot of work having children but there are moments when it is totally worth it. Cheers!

guinness416 said...

Hard to argue with your 4 takeaway points, good points well made all. But honestly I'm often perturbed with a lot of advice on finance blogs which assume your average 17 year old can do cost benefit analyses on issues they have no experience with (career, real money, etc). Or cost benefit analyses on anything other than guinness versus carlsberg! We all screw up in one way or another when we're 18, 19 years old; the good thing is we have lots of years to learn and make up for it.

Wooly Woman said...

I can relate to what you went through too- but what guiness416 says make sense too- money management was not a priority for me in my early 20's... even though I sure wish it was. Thanks for sharing your story!

Fecundity said...

@Canadian Capitalist - thanks for giving out the idea, and for the congratulations and congrats to you on three whole years.

@Guinness & Wooly - You're very right. I wouldn't have been able to do a cost benefit analysis back then (except if booze was involved, good call). However that doesn't stop it from being a mistake, nor does it stop me from wanting to go back and give my 18-year-old self a good swift kick.

Actually, what I'd really like to do is go back and have a chat with my ten-year-old self. "You are a spatially oriented person. You learn things visually. Draw a diagram and you'll understand it better. Understanding is better than memorizing. Keep drawing them about everything until it makes sense. If it still doesn't, ask about it. Oh, and this thing called the Internet will be in use in about ten years. You want access as soon as possible."

Thanks for the insightful comments.