One of the great tragedies of my generation is that we don’t understand where money comes from.
I’m not exempt from this.
One of the fundamental issues of 18-to-35-year-olds is that we don’t understand how to make money.
That seems basic, but if it was why are we doing so poorly? Why are so many of us moving back in with our parents? Why are we so frightened to go out and live on our own?
I talked about this issue a bit in money 101, but it’s worth another discussion.
The problem starts when we’re young. Our parents don’t teach us about money in any sort of depth. Instead, we glean our spending habits from TV, credit card offers, and the spending habits of those around us.
And with poor spending habits come poor earning habits.
As children, most of us were handed money from our parents. I was blessed with a family who made sure I understood that money comes from work, but many of my friends weren’t so lucky.
Instead of working for their money, many in my generation received an allowance. By the time they hit high school that allowance had turned into “I need some money to go out with my friends” and their parents were all too happy to oblige.
It’s becomes a magical piggy bank that’s never empty. And without bills, hard work, or interest many of us have no idea how to earn money.
Unfortunately, college isn’t much help. Until recently, it was easy to get a credit card as an unemployed 18-year-old student. You don’t need a job to go out with your friends, just a credit card with a $5,000 dollar limit and a 25% interest rate. Like with our parents, we assumed this was free money.
Those of us lucky enough to miss out on credit cards had student loans available to pay the bills, buy toys, and do the things we enjoy. We were never told that student loan are unbankruptable, and that we would be paying them off into our 40s. No, all we knew was that, like with our parents, money came without effort or consequence.
Even worse are auto loans. A friend of mine who was unemployed and struggling to eat was given a $20,000 dollar car loan. She was told she’d have plenty of time to find a job and pay it off since they wouldn’t make her pay anything for 4 months; all the while gaining interest. She got a minimum wage job and almost drowned under the debt.
You may think this situation is unusual, but it’s not.
Our parents assumed we would know the lessons their parents taught them. But we didn’t learn them.
The banks, creditors, and financial “experts” were no longer trying to help us, they were trying to sell to us; or, as the Bible puts it, to own us (Proverbs 22:7)
At graduation, we were left with a college degree and a pile of debt.
Most of us don’t know how to get a job, how to work hard, or how to sell ourselves. Instead, we know how to get A’s on multiple choice tests (that get easier every year) and how to use someone else’s money (Visa’s, Sallie Mae’s, or our parents’).
Where Money Comes From
So where does money come from? It’s easy to say, but harder to understand.
Money comes from work. It isn’t something anyone deserves, it is something that’s earned.
As Dave Ramsey likes to say,
“Your ability to earn money comes from your ability to go out, kill something, and drag it home.”
Another way to say that is, you earn money when you can do something that someone will pay for. If that’s designing a smart phone that changes the world, then you will earn a lot. If that’s flipping burgers on the weekend, you won’t earn as much.
Where do we start?
We start by killing the myth that all work is fun and fulfilling. A lot of work is boring and difficult. Even jobs you love will sometimes grate on you.
Let me say that again. Even if you love your job, sometimes you will hate it. That’s a truth most people don’t want to deal with.
The second thing we have to do is learn that enjoyable, high paying work takes time. Think of people you know who make a lot of money. I’m not talking about people with big houses and nice cars. I’m talking about people who earn $100,000 or more a year and can keep a good chunk of it in the bank. People who have wealth, not stuff.
How many of those people are under 50? Statistically, not many.
Most people under 50 aren’t working a job they love and making over $100,000 a year. That kind of income takes time. The average 30-year-old is still trying to figure out what she wants to do with her life, not working the job of her dreams. And statistics tell us that the highest income you’ll make will be between 50 and 65.
It’s reasonable to take 50 years to earn the knowledge, experience, and expertise in a field that demands that kind of income. Some people do it earlier – but most don’t.
Finally, we need to get out of debt. Debt steals your ability to take chances, to experiment, and to build wealth. If you leave college with $50,000 in student loans, $20,000 in car debt, and $3,000 in credit card debt you pretty much have to take the first job offered. But if you are debt free, have a solid emergency fund, and are budgeting every month then you will have the freedom to test different jobs, expand your knowledge, and grow in the marketplace.
Easy to understand; difficult to live out.
When you graduated college, where did most of your money come from? If you’re in college, where does most of your money come from now?
For more resources on getting work check out 48 Days to the Work You Love: