Broke-Ass Student

Finances are an interesting conundrum. In order to eventually reach financial prosperity, one must (ironically) consciously focus a great deal of energy and efforts on their finances in the beginning of their journey through frugality, savings and investing. Doing so wisely allows one greater financial freedom that they desire for the future.

I thought it would be interesting to compare my finances in my teens and twenties, compared to now (early thirties) to gauge my own path toward financial prosperity.

In high school I was young and foolish; any hard-earned money was spent while cruising around town in my friend’s battered green Volkswagen with no air conditioning, with all the windows rolled down as we smoked our forbidden cigarettes and splurged frivolously on shiny gadgets, spa days, expensive clothing, and beauty salon upkeep visits.

At some point during my senior year of high school, I became bored and fed up with this local scene and began to crave something different, but I knew a lack of finances (or savings) was holding me back from my desires and limiting my options. My heart yearned to see different lands and cultures and therefore next I applied for a waitress job, to work after school in the evenings and on the weekends.

I made decent tips while waitressing and began to save aggressively all those crumpled five and ten dollar bills I was bringing home consistently every night. These were all balled together and stashed in a jewelry box until I had accumulated a couple hundred dollars—enough to open a savings account at the local branch downtown.

Eventually I scrounged enough money during my senior year of high school to afford my very own flight ticket to Europe. At the time, my friend Gianna was staying at a flat in London and jubilantly welcomed me to visit her.

For months (the entire summer) we vagabonded throughout Europe while I lived off my savings until, finally, I was forced to return home to the States. I was exhilarated and craved more adventure, but I was also dead broke again. Shortly after, I took out a loan to buy a vehicle with money I did not have—all of my savings were depleted. The debt cycle was thrust into motion, which devoured any hope of building a surplus of savings or any type of foundation to build wealth on.

Instead I was living paycheck to paycheck, enslaved to my bills.

Looking back in retrospect, the worst financial decision I ever made was not to have saved a percentage of my income throughout my teens and twenties. Although I do not regret my life experiences traveling through Europe, I had foolishly used every cent in the process, instead of setting aside a small percentage in order to build wealth with. Each time money passed through my fingers, it was eventually spent in its entirety.

I neglected a huge wealth-creation secret: once saved, never spend your initial principal. Instead live off the interest/capital gain/ dividends generated from that initial principal, or savings.

My finances in my thirties are encouraging because finally I am creating small streams of passive income. Since freeing myself from debt, I have had an opportunity to build a strong foundation of savings that have worked hard for me over the past three years. A tiny sapling is slowly beginning to grow and, with proper nurturing, will become a mighty, fruit-bearing money tree. And the children of my savings will also continue to bear fruit as well to sustain me, while producing further financial seedlings for sowing.

Although I regret not saving more in my teens and twenties, finally my money is working for me and that is truly liberating. If I continue to make wise and prudent financial decisions now, my forties will be spent in even greater financial comfort.

All great fortunes start with savings and every cent counts. Start now and start small. Do not ever spend the initial saving principal and soon your own little money tree will begin to sprout, to thrive and bear fruit and guide you toward greater financial independence and peace of mind.

And it all starts with simply saving.

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(If you enjoyed this article, you may follow my recent financial adventures at Broke-Ass Mommy.)

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