I was recently thinking about how the town I grew up in might have shaped the way I feel about money. Both Mr. SFF and I had similar backgrounds even though we grew up in different states. Our home towns were both upper middle class and great places to raise children but as we both watched as our families struggled through difficult times and I can’t help but wonder if this shaped the way we manage our money today. (And to be clear, neither of us have even been given or inherited any money from our families. All of our wealth we have created on our own.)
When you live in a town where the average home price is much higher than the average American home, there is also a correlating increase of the average income and lifestyle of its residents. There were of course regular neighborhoods in our town growing up but there were a high number of nicer homes with big price tags. I believe there was even a regulation from the 80’s that had a minimum lot requirement of 5 acres meaning that a regular blue collar worker probably couldn’t even afford to buy land and build a house there.
I have to wonder that if you are on the lower end of earners in a community like this that you must feel pressure to keep up, and more so than an a more average community. Both of our families were probably defined as middle class, but in a town where incomes can be much higher did they feel more pressure to keep up or is it about the same as any old town?
My parents owned a few houses throughout my childhood, the first one in a different town and then the next 3 in the town I really grew up in. The first one they built before I was born in a pretty average town. This house was a raised ranch and was surprisingly similar to the first home Mr. SFF and I owned. But when I was 5 or 6 years old my parents build a new home in a hoity-toity town (on a 6 acre lot) a couple of towns over. This house was pretty great and my favorite out of all of them. It was a reasonably sized 3 bedroom home with an amazing 2 story solarium. I kinda wish they had stayed there. We had plenty of land to play, trees to climb and even a stream to wade in during the summer. We even had solar powered hot water which was not as common back then.
After this home they purchased a much larger 2800 square foot home with 4 bedroom, 2 ½ baths, a formal living room, formal dining room, and two very large family rooms. There was a lot of extra space for our family of 4. Did my parent’s buy this home to try to match the rest of the town and the wealth around them? I certainly don’t know. Maybe they were trying to keep up with the Jonese. From what I saw of their relationship, I don’t believe they had good control of their finances like Mr. SFF and I have or talked about money like we do.
The recession of the early 90’s must have hit my family hard. Although I don’t know all of the details I do know my dad was saved from a layoff multiple times. I can’t even imagine the stress this must have created. I believe they were on the brink of bankruptcy at one point and this could have been the cause for their next home purchase, a significant downsize in homes. Our third home in town was a much smaller 3 bed 1 bath home that was in desperate need of some updating. It was obvious even to a child that they were struggling with money. And it’s not that we lived lavishly by any means before, but did the little things over time in addition to the big house finally catch up to them?
As I child I was aware that my parent’s didn’t have a lot of disposable income. Maybe I shouldn’t have known this but I did. I didn’t ask for the brand name clothing or for a really nice car because I knew they couldn’t afford it. I did get a used Mazda 323 in high school and will openly admit that at the time I was a little embarrassed parking next to Volvos, Saabs and sometimes brand new cars when in reality I should have been grateful to have a car at all (I have since thanked my mom and apologized for being a snob). But if you are always on the low end of things it is hard not to want what your friends have. Maybe this is human nature or just the ways of a teenager.
The interesting thing though is how this all shaped my view on money. I saw my parents struggle financially and eventually when I was a junior in high school they got divorced. Now I can’t say if money was the cause but I can’t imagine it helped. I guess I have never wanted to be in that sort of situation because even from my pre-teen years I always wanted my own little stash of money. I had my passbook savings account which didn’t have much but I liked that I did have some money (and loved getting the updated stamps showing my interest). Although I do like new things, I have always been careful not to spend more than I had in order to get them. The only time in my life where I have had any sort of credit card debt was from my semester abroad in college, and even that balance was not that big.
So did I learn about money by watching what not to do? Maybe. Because I certainly have not followed in their footsteps.
Although I know only some details about Mr. SFF’s family I do know they also had some struggles when he was growing up. Although they lived in the same home from when he was 1 years old, they had their own struggles and did actually file for bankruptcy at one point. And his parents also ended up getting a divorce, strangely around the same time as my parents. His dad has since passed away and was pretty broke at the time but thankfully his mother was able to get her act together once they split. She is actually pretty inspirational as she was able to come back from the bankruptcy, get both of her kids through college, and then build up her savings to where she was able to comfortably retire 5 years ago. She does have a nice pension and social security covering most of her expenses but she also very smart and was able to pay off her home so she is completely debt free. This goes to show you that you can make it happen, no matter your age or the state of your finances as long as you are dedicated.
Sorry for the tangent there, but maybe it was also watching his parent’s struggle and eventually watching his mother succeed, that shaped the way my husband views money. I would even say that he is naturally more frugal than I am even though he has at times made a pretty good salary. But in the end, it is his frugal nature that has greatly helped us get to where we are now. Because if he spent more on his (our) first home, been less cautious with his money, or not started his 401(k) right out of college, then we certainly would not be only 3-5 year away from our FI goal.
As both of us watched some struggles growing up, it is sort of amazing that we both ended up going the opposite direction, away from the Joneses. I often wonder how many kids are able to grow up and be able to make smart money decisions after watching failure or if many just imitate and repeat the habits they have grown up to believe as normal.
I certainly feel lucky that I learned what not to do and have found ways that really work for us. As now I really don’t care that I don’t have the grand house or that I park next to brand new Audi’s, Porsche’s and BMW’s as my 9 year old Honda Fit does what it is supposed to do (get me to and fro) and the income from our owner occupied duplex covers our mortgage meaning I have more money to save and invest and to get my closer to FI.