Johnny’s confession: “I used to suck with money”

Warren Buffett - Johnny Moneyseed
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At times I may come off as someone who isn’t sympathetic to those who struggle with consumer debts, car payments, or who generally don’t make enough money to cover their lifestyle. This is more of a half-truth than anything, because I’ll let you in on a secret: I used to be one of them.

To be honest, I used to have a pretty terrible financial track record. When I was younger I had such a bad spending problem that I had to give my mom my debit card so I wouldn’t spend money…on multiple occasions. That was always a pretty good deterrent from spending for me, but I’d always end up in withdrawal (from not making withdrawals). I’d resort to writing $50 checks for $5 worth of groceries so I could receive cash back. I lived paycheck to paycheck and way beyond my means.

It was all fun and games until the debt collectors started calling. Oh yeah, I forgot to mention, I had a couple maxed out credit cards and stopped paying the bills on them. If you’ve ever had a debt in collections you’d know how awful the feeling is. Your phone will ring. Another random 800 number. You don’t answer it, because you know who it is. You hide your phone out of sight while your chest crushes in on itself, no matter where you are or what you’re doing.

It’s truly one of the worst feelings in the world. Your mind will constantly revert to thinking about your finances, which may cause a sleepless night or twenty. You don’t want to look at your bank statements, because you know you’re broke. But you keep spending, because you have to.

I would love to lie to everybody and say that I’ve never been a victim of consumerism, and that I don’t know the sound of a collections call. I would love to tell you that I’ve never tried to run a credit card for a purchase and prayed that it would go through. But I can’t tell you that, just like I can’t tell you that I don’t know what it’s like to tell a cashier “I don’t know why that card would be declined”.

Then all of a sudden one day I started caring about money. No one would have believed in a million years that that was even a possibility, and to this day I’m still surprised myself. I chose the unpopular path of spending less than I made and after not too long I hit a milestone that I had never been able to achieve until that point: I was about to maintain a comma in my checking account. Yep, I was a thousand-aire. I knew I wanted to keep my precious comma, and I never went back to my former life as a spendthrift.

Sometimes when you make an improvement in your life you forget what your life was like before you decided to make the change. You might become more confident and maybe even develop a hint of arrogance. You might possibly look down on those that haven’t taken on the same changes within their own lives. You might think “When are they ever gonna learn?” as if you didn’t just figure it out yourself.

I went through a phase similar to that. And to be honest I think it did a lot of good.

In my younger days when I was lousy with my finances, I harbored financial insecurities. I wasn’t confident with money, and how could I be when I knew my credit card was going to be declined over and over? So when I made my transition, and stopped living paycheck to paycheck, I began to think “Why does anyone else live paycheck to paycheck. It isn’t that hard to save money.”

My thoughts that may have been negative at times actually kept me on track with my own personal goals. I was able to look at a desperate situation and think “That will never be me!” and fortunately I’ve been able to keep my head above water.

I don’t condone outward negativity towards others. I believe that everyone has a unique situation, and without close inspection there’s no true way to make a determination if they’re doing everything they can to improve their life, or if they’re just another hopeless over-spender.

Since then I’ve humbled myself quite a bit. I don’t look down on people who are less fortunate than I am, or even those that just need a wake-up call. I can now understand and respect the struggle that many families and individuals deal with on a daily basis. And I know firsthand what it feels like to be in their shoes. I know what it’s like to have to make the decision to either pay my rent or make a car payment, because doing both isn’t an option.

Buffett Cartoon - Johnny MoneyseedIf you were to try to help me out before I was ready to change, myself, your advice would have fallen on deaf ears. It’s almost impossible to make someone see the bad situation they’re in for what it really is (this applies to more than just finances for a lot of people). Before I was ready, I wouldn’t have taken financial advice from the legendary investor and entrepreneur Warren Buffett.

I’ve also realized that not everyone wants help. People may ask for your advice, because you seem to have your shit together, but they may not have any intention of following through with your suggestions. They may just want to hear themselves admit that they’re in a financial rut. Letting the words leave their mouth is a way of telling themselves that they tried to fix the problem. You can try till you’re blue in the face, but people are always going to make the easier decisions, until they truly want to change.

I feel that if you make a serious positive change in your life you should become a beacon of hope and inspiration for those who need you. You only have the power to help those that you reach out to. Not everyone is going to come to you for help, but at least let them know it’s alright to. Leave your judgments with your bad habits, and try to understand what it’s like to want to help people. Not because you’re better than them, but because you might know what it’s like to be them, and you know that life doesn’t have to be that way.

44 Comments

  1. A wonderful post! You’ve certainly encouraged me to be more mindful of money. Finally broke down and got an account on mint.com a couple months ago after reading your blog and it’s a great tool.

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  2. I had a time too where I was really bad with money. I was maxing out credit cards and opening new ones, lying to myself that they are for a better rate through balance transfer. It was only until I realized why I was doing this that I was able to overcome it and get my finances in order. The key is what you pointed out: until you truly want to change you won’t. You might say you want to change but you really don’t mean it.

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    • It’s like when people say they need to quit smoking when they’re holding a lit cigarette. If you really wanted to quit, you’d stamp the damn thing out and stop buying them.

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  3. The vast majority of personal finance bloggers used to be in debt at one point or another…so this isn’t a surprise! The blogosphere seems to attract creative former debtaholics and a lot of people use their blogs to track their progress out of debt or to keep themselves accountable.

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  4. It’s amazing how you can change when you become more confident in yourself and your abilities. I’m so proud of you and think that your story can help a lot of people who think that there is no light at the end of the tunnel. Thanks for sharing with everyone and keep putting the frugal word out there! Maybe you’ll reach some poor soul and change their life today. :)

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  5. I enjoyed reading your confession Johnny. My favorite kind of PF posts are the ones where people share how they learned from their past mistakes because real experiences = real people :) I’ve never had it so bad where debt collectors were calling me because as bad as I was with my finances, I never once missed a bill payment. Hopefully, I never will.

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    • I never missed a payment when I was younger, because my mom would pay my bills for me. It was a pretty terrible way to learn financial responsibility.

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  6. Well said!! I think it’s hard for us to see what we used to be like until we see it in someone else. It’s now in our nature to want them help avoid the pain that you once went through. But you’re right, not everyone is ready. But that’s the beauty of the blog. People can come and go as they please and get whatever info they want and leave the rest!

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  7. It’s like how they say that failure can pave the road to success – being bad with money for a period has shaped my (and yours, obviously) road to financial freedom. I’m on the right track now but it’s painful to watch those that aren’t. I try not to get judge-y at work and in my personal life but’s really hard at times.
    I feel, at times, bombarded with distractions with my money. Just yesterday, my daughter’s scout troop set up a field trip at the firestation – very cool (and free) and of course they will be going out for pizza afterwards. Well, we don’t eat out very often and I’m not really down to spend part of my (intentionally small) eating out budget with 20 giggly first grade girls. . . . I told the leader that I wouldn’t be going to the dinner, but to put us down for the tour. I KNOW I’ll hear a little bit of whining about it from my kids though. I know that this scout leader has a stack of credit card debt as well as do several of the other parents who will surely be going for pizza afterwards. I know that it’s hard to explain to a 6 year old that you can do anything with your money, but you can’t do it all. I guess it’s hard for us adults to tell ourselves that too. You have to make choices and you can only hope that they will find their current choices to painful to continue before they have done damage they can’t dig out of.

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    • Thanks for sharing, Stephanie! I am not yet a mother (and won’t be for a few years) but I wondered how my frugality will affect my unborn children. If they miss out on a pizza party, will that inevitably scar them for life and send them to therapy?? But, I’m sure that’s over-thinking the situation and they’ll likely forget an hour later. Your behavior will likely rub off on your daughter and she’ll be forever “indebted” to you for your admirable money decisions.

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      • Well, I try not to scar them ;-) but I do talk about it with them at what I hope is an age appropriate level. We’re about to go on a vacation in a few weeks and so I can relate not doing this one thing 10 times to us being able to take this trip together. She seems to get it that way. I honestly think it would be harder on them if you were used to indulging your kids to cut back after they were used to doing and getting everything they wanted.
        She also wanted a yearbook this year from school I told her that if she wanted to use the money she had from grandma she could buy it but that I wasn’t buying it because it wasn’t something she ‘needed’ like lunch or pencils. And she did – it was $11. But when I told her that I wasn’t buying her the magazine at the grocery store with one direction on the front but she could give me the $4 when she got home if she wanted it that badly. She really hemmed and hawed about it but decided she didn’t really want it.
        My own parents are pretty frugal (they are your typical millionaire next door) so it’s more like returning to my roots and following up that tradition but also trying to be transparent about the money lessons you pass on to your kids. We didn’t really talk about money values growing up that I remember.

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        • Those are great lessons that thousands (or millions) of dollars cannot buy. I remember scrounging together all the loose change I could find and taking my bike down to the store to buy teeny bopper magazines. My mom couldn’t pay for things like that, but I think I made it out much better than most kids who got everything they wanted. I wouldn’t want it any other way looking back. Nice job, again!

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    • Stephanie — When I was younger my mom would buy me everything I wanted. I had a savings account that I wasn’t allowed to touch until I was 18, so I never handled money. One time (in 7th grade) we went shopping to buy me new shoes. The ones I picked out were $140. She bought them for me. Are you effing kidding me mom?! Obviously when the time came for me to be able to withdraw from my savings account I cleared it out pretty quickly. I hate to blame my parents, but they didn’t enable me with the financial techniques that an adult should possess.

      Basically what I’m trying to get at is that parents can have significant impact on how their kids view money. If you continue having talks with your children about money and explaining why they can or cannot do something, or buy something, they will be infinitely more prepared in adulthood that I was. You did the right thing by not giving in to the pizza party as well. It may only be $10 or $20 but it’s an unnecessary expense and it’s very important for your kids to see you make financial decisions instead of just following the pack.

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      • Thanks Briana T!
        Yikes moneyseed! – I’m sure that growing up in a frugal household (think washing ziplock baggies and reusing) had an impact on my wants as kid even. I had the feeling that it wasn’t really allowed to ask for super expensive stuff when we were shopping. I guess I just knew they’d say no because on a deep level I knew they could afford it because I didn’t have the impression we were poor at all as some do growing up in frugal households. I had everything I needed and LOTS that I wanted. Brand names were never important to me as a kid and they never have been to me as an adult either. My husband didn’t grow up with secretly wealthy/frugal parents and brands were important to him for a long, long time.
        I really try to let them help give input/make decisions about things that affect them – it’s sort of like the yearbook. I’m not going to say that she can’t have it if she really wants it but I’m also giving myself permission not to feel obligated to fulfill her every want. And she has a ‘generic’ american girl doll from target – and is asking why she can’t have a real one. btw, her friends can’t tell the difference from looking at it either but they know that her dolls name isn’t one of the REAL ones . . . ;-)

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  8. I love this post – thanks for sharing some pretty vulnerable-sounding moments in your debt past. I’d love to hear what your “a-ha” moment (or moments) was when you decided to change!

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  9. Nice confession Johnny. You are a good PF blogger because you have been there and done that. You can’t really teach others without being learning the lessons. I wouldn’t listen to you much if you never had problems with money and just wanted to teach people. People like to hear about others that went through or are going through the same things they are.

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  10. Very well put. I am right there with you. I remember not wanting to look at the phone at all because I knew it would likely ring and be a collections call. I felt so helpless and it ultimately was not until I saw the issue at hand that I started to change. Spend less than you earn…why on earth would I want to do something like that?! That was the thought at the time, but once I started that it was all downhill from there.

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  11. This post really hit home. It took me back to my days of crossing my fingers and praying that the transaction would go through. My husband and I have also had a light bulb moment with money and have paid off our debts and have an emergency fund. I still have to remind myself to be humble about getting our act together. I get irritated when I hear coworkers talking about how “the little man can’t get ahead”. I grew up as bonafide trailer trash, and I got ahead. They make more money then I do, but can’t make ends meet. Looking at the situation from where I sit, I want to ‘help’ them…give them advice…tell them how great it could be…but they only give excuses back about how it can’t be done for them. I need to become more meek and humble and as you said…live by example. Great Post!

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  12. I do love a good story of redemption! While I haven’t ever buried myself in credit card debt, I’ve made plenty of dumb mistakes (see my latest post). The important thing is you turned the ship around. What do you think caused you to suddenly change?

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  13. Just curious, what made you change?

    I was always the way I am (tightwad), but I think stories like this are better than mine because change is very hard. In my experience, people don’t usually change unless they find their god or have some other extraordinary event in their lives.

    So, was it an overnight thing? Also, have you ever slipped back into your old ways?

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    • Mr 1500 — I’ll leave what made me change for another day and another post, so I hope you can handle the suspense. I was always kind of a cheapo with everything when I was younger, except for when it came to going out with my friends. I don’t know if I had something to prove, or if I just liked to party a little bit too much. I just knew that I was wasting money, and that I really had nothing to show for it.

      Once I realized how money worked I never went back to my old habits. It was a light switch moment, and my life is 100% different than it was before. I research every purchase I make, even small ones. I try to find the lowest price items without losing quality, and I only allow us to spend 50% of our take home pay. If we splurge, it’s still within that 50%, so I think that’s reasonable.

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  14. You hit the nail on the head for the reason I started my Budget Friday series. I was there, I had no idea where my money was going, and I was stressed out about it. I love being able to help others with the same things I struggled with, and help show them a way that could help them. Most of us in the PF community have lived and learned the hard way. Best thing we can do it pay it forward.

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  15. I was an absolute financial disaster! I also had one of those random epiphanies where all of the sudden I cared about money. Working my ass off to get where I am today has paved the way for a future that makes me seem almost like a different person when compared to the past.

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  16. Good advice ,Im a mom of 3 girls , modest budget, but we own our company , house and land,, I have never have paid anything late, I try to teach my girls the same , not easy to tell a teen 3minutes in the shower is enough , water bill is killing me , sometimes teen just don t understand , I havent had to bail out my kids yet , but Im sure I might have to one day.

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    • I remember taking 20 or 30 minute showers when I wasn’t the one paying the water bill. I can’t imagine what their utility bills looked like when me and my sister were both in our teens. I would probably think about reducing the amount of hot water that your hot water heater holds. If there are only a few gallons in there, the kids will probably try to get out of there before it gets too cold. They probably wouldn’t even try to fix the problem either.

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  17. Excellent article! I can relate to the lousy financial turmoil of my early twenties. It took a facepunch and lifestyle change to face the reality.

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  18. Great post, Johnny! I love hearing personal anecdotes. It really validates humans’ willingness and ability to change. Sometimes you have to be at the bottom, to learn how to crawl to the top! Glad you turned yourself around.

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  19. Really inspirational Johnny – most people would probably curl up into a ball if they’d reached $60k debt! Determination is surely a really hard thing to find at that stage – your story is a massive encouragement.

    While I’ve never reached that level of debt, I’d like to try and save up to buy a house here in the UK, but have always felt it completely impossible… Perhaps not? :)

    Fi

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  20. A great story, thank you for sharing it. I agree there are some people who don’t want help or advice – they are very content living their life waiting to fall off their own personal fiscal cliff. I hope they wake-up before that happens. I find we can only do what’s right for ourselves and other our guidance and wisdom to those who are ready to make a change.

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  21. I love when when people who have really sorted out their finances reveal that they weren’t so well-behaved to start with.

    I suddenly started caring about money about six months ago, specifically knocking off my random discretionary spending. Unfortunately it didn’t happen until I’d already pretty much maxed out my $75,000 student line of credit.

    Granted, I’ve now got a law degree but my big secret/confession is….my Dad paid my tuition. So I have really no excuse for having spent that much.

    That said, one of the other things I’m working on is not beating myself up over my past mistakes. Yes, I shouldn’t have spent that much money, but hating myself for it doesn’t accomplish anything. I intend to have it paid back in two years, and i think it will be a valuable learning experience.

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    • Jess — It doesn’t matter when or why you decided to make the change to become a conscious spender, it only matters that you did. You can’t change the past, but you can use it as a tool that will help you to avoid future mistakes. If you land a $100k+ job as a lawyer (which is definitely possible depending on the area of law you studied), it doesn’t mean you have to have a $100k+ lifestyle. Going from student to professional is a huge change. You can start paying for the things you earned, instead of putting it on the student line of credit. I like to keep our family’s spending at around $40k/year. We have a nice house, take nice vacations, and we pretty much buy whatever we want, but no matter what type of raises we may see in the future we’ll always keep our spending around the same level. I wrote another post about not beating yourself about making poor investments in the past. It definitely applies to your situation as well though. http://www.johnnymoneyseed.com/investing/delayed-gratification-and-the-coulda-shoulda-wouldas/

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  22. What a great, honest post. I love the part about your negative feelings towards others and how that actually benefited you (as long as you kept it in).

    It seems like a very logical progression. First, you have a problem with money. Then, you fix the problem, but you’re insecure about your financial prowess, so you lean on certain crutches like this one.

    Finally, you become secure enough in your financial plan that you don’t need those crutches anymore. You are confident and can now help others out.

    Seems like a progression that you can probably find in many areas of life, not just personal finance. Great post!

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