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23

How I Can Set A Good Example - Living the Dream and Teaching

Shanti and sisters, oldest to youngest, Chicago, March 2007

I know that I am not old and wise - I’m still young! But I am an older sister, and with that comes the responsibility of setting a good example. Though I didn’t see it for most of my childhood, my two younger sisters mimicked me all the time when we were little. I later came to see that the decisions I made set an example in their minds of how they could or should be, and gave them an early look at what “adult life” really was.

While I managed this responsibility very well in some regards - I got great grades, didn’t get into trouble, and managed my time and relationships well - I didn’t show them a good example with my money. While I looked, on the outside, like I was very successful at a very young age, the truth was that I was drowning in debt and living with a negative cash flow - paycheck-to-paycheck didn’t even describe me.

I have since tried to remedy this by learning about wealth and money planning and by turning my finances around. At first I was very shy about my debt - after all, I was deeply ashamed of it. But over time, I started to open up more about my struggles and disclose my hardship with both of my sisters. They have now watched me battle the debt and actually WIN, and they are reaping the benefits, which makes me happy.

Last month, the older of the two sisters was going to buy a car that was way outside her price range, and I wrote all about how I persuaded her to buy an inexpensive, older car instead. She’s happy with her decision now and glad she didn’t make the in-the-moment decision to buy the more expensive car. My favorite part of the whole ordeal was that after I beraded her for not considering something within her means, she called me to ask my opinion on the older cars she was looking at before going out to test drive any of them. This just makes me grin all over
Following the same trend, my littlest sister called me up a couple of weeks ago and asked me about investing. And she’s 19! She said that she was earning roughly what I earn now and asked me how she could avoid getting into debt. I nearly fell off my chair. This is the crazy sister, the one who is never responsible… the one who lives on a whim! I was positively GLOWING when she asked me about investing.

So, being the knowledgable big sister that I am, I explained all about Roth IRAs and mutual funds. When I suggested that she open a Roth IRA, she asked how much she could put in. When I told her that the max was $5000 this year, she retorted, “Wait, that’s ALL I can save? What if I want to save more?!” I love her!

So we talked more about how she could open a second Roth, or just invest in good growth stock mutual funds. I explained all about compound interest and how she doesn’t have to contribute forever, just for 7-12 years, for her to be a millionaire when she’s in her 50’s. At this point, she was following along but got a little overwhelmed, and then asked me, “OK, well, I’ll save up, like, five grand and then you can tell me what to do with it. That should be in May or June.” You have to love that she just gets to the point
I cannot wait until she calls me up and we can, together and on the phone, set up her Roth. I am hoping that after she dumps $5k into the roth, she’ll save up another $5k and we can discuss the wonders of index funds and investing. I am so excited!

If it weren’t for my long and horrible experience with debt, I would not have ever learned about anything related to personal finance, and I would not have been there to help my sisters as they journey into the world of adulthood. I am just so damn proud that they are doing so well, and that I can be here to offer encouragement and support when they need it.

Have you been in the position to offer financial advice to a family member? Are you comfortable giving advice? Do you have any bad experiences?

I’ll be back on Monday to respond to comments! In the meantime, Sean and I are at the river, doing our own thang away from the internets.

Filed Under Just My Life - Stories, Etc., Self-Help and Personal Progress, money and finance

Comments

3 Responses to “How I Can Set A Good Example - Living the Dream and Teaching”

Dr. Joe on March 24th, 2008 3:17 pm

It sounds as though your sisters are very fortunate to have you.

There must have been some sort of example in your life to have the close family ties to create the trust and bond you all have.

Thanks for all your sharing. Not only are you insightful beyond your years, you are also extremely practical. I love all the links and resources you provide as well.
bethh on March 25th, 2008 9:21 am

That’s a great story! Good for you for being open with your siblings about what you’ve learned. I have good money relationships with my two younger siblings as well. I encouraged my sister to be aggressive about retirement savings, and she’s surpassed me by quite a bit already! I joke (I hope it’s a joke..) that I’ll sleep on her couch when we’re old.

Now we’re working on our younger brother and I was beamingly proud when he showed us his budget and money tracking, and talked about how he was keeping his credit debt at zero. He *did* buy a new car and is a bit bummed out that his payments are four times mine (for my used car). But that’s a learning moment as well, and he can afford the payments, I just think he’s learning that it’s not FUN to be paying on a car forever.

congrats on your great sibling relationships.
Early Retirement Extreme on March 30th, 2008 10:11 pm

Uh, she can’t go around the [ROTH] IRA contribution limit by opening up additional IRAs. It’s $5k for all of them together.