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Sep 06, 2016

The dress that taught me to budget

Young Enterprise CEO Terry Shubkin celebrates Money Week by sharing an experience from her youth.

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It’s Money Week and for me, this week is about being smart with your money.  Because the smarter you are, the more choices you have in life. 

I’m lucky.  I’ve always been good with my money and I have my parents to thank for that.  While they instilled in me the importance of savings, the biggest lesson that I am grateful for was how to budget.

When I turned 13, I was put on a clothing budget.  Not for the week.  Not for the month.  My budget was for the entire year.  Every piece of clothing I bought came off my budget.  Back then we didn’t have Excel spreadsheets, so Dad made me do all of the calculations by hand.

I did great my first year.  I kept track of every purchase.  I made decisions to forgo some items so I could afford other things.  All was going well until the end of the year.  My budget was used up, but I had less than a month till my new budget kicked in.  The problem was that I didn’t plan on the end of year school dance.  Surely, that dress didn’t count?  Well, apparently it did. 

I remember begging and crying.  I hate to admit it, but I probably also said some very mean things when I didn’t get my way.  In the end, my parents stuck to their guns and I had to borrow a dress from my older sister.  As a 13 year old, I was utterly mortified someone might find out.  But, I can honestly say I never made that mistake again.  And the skill of budgeting long-term has given me so many more choices in life.

A couple years ago, I noticed that my nieces were not very good with their money.  They had developed such a propensity to save (which is good) that they literally stressed about spending their own money.  And my sister thought that because she wasn’t spoiling them, it was fine that she bought everything for them.

I told my sister that she was doing them an injustice and convinced her to implement an annual clothing budget.  My sister tells me that they are making wise decisions now, and thinking ahead to future purchases before deciding on current ones.  I’m not sure if my nieces are thanking me just yet….but they will one day.