This is the first in a series of weekly posts titled “How I Did It”. Throughout this series I will be describing my methods of personal finance, frugality, and what it took to get where I am today.
I like to think that I started my journey toward financial freedom when I turned 18 with my checking, savings, and credit card. However, the more I think about it, the journey began early in my childhood with my parents.
College Savings as a Toddler
My parents opened up a joint passport savings account for me at a local bank. Any and all gifts of cash went here for college. The amounts were small, but they sure added up! Between cash gifts, U.S. Treasury EE Bonds, and compounding interest, I was able to apply this towards a large percentage of my one year technical school. This was excellent, but I had many more years of schooling to go.
Let’s say for example you are to put $100 away every month for your child. Over the course of 17 years, at a 2% interest rate (let’s hope the rates get better), this would yield $24,313.46! You would only make $3,913.46 in interest, but it’s $3,913.46 you did not have. As of this posting, that’s about one semester at a community college here in New Jersey.
Savings Through the Years
Once I was older, I found out that money was a way to obtain things. I did not want to save my gifts of money; I wanted to spend it. However, my parents still encouraged me to save most of the money while keeping some in my piggy bank. I enjoyed seeing my money grow in my piggy bank, so saving became a
habit of mine. I feel having the actual money in hand helped me as a child to save for bigger things. Instead of wasting a dollar at the corner deli on some candy, I would save it for something bigger and better.
In order to stay on track with savings or to reach any goal, it’s best to make your actions habitual. With direct deposit, online savings accounts, and bill pay, you can automate a lot of habits so you do not even need to think about it.
Getting my First Checking, Savings, and Credit Card
After I turned 18 in late 2004, I went over to Wachovia so I could open my Free Student Checking and Savings accounts. While I was opening the accounts, they asked if I wanted a credit card. Hesitant at first, I asked a bunch of questions and went for it. It took about a week to receive the approval letter with a $500 limit. At the time I did not have a full time job; I did freelance computer consulting. I treated this card VERY carefully and only put purchases on here that I knew I could pay off every month.
When did you open your first checking, savings, and credit card accounts? Did you do things in a particular order? Any reasons why?
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