My sister and I grew up 2 1/2 years apart. We were raised by the same parents, went to the same school and had similar extracurricular activities. However, we are very different financially. I reached financial independence in my 30s, while she doesn’t have much savings, still rents and makes little more than minimum wage.
Growing up, my parents pushed me to start working very early. I had several side hustles all the way through high school. My sister, on the other hand, was encouraged to focus on school and only had a part-time job in college.
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We were both taught to respect money and try to spend it wisely, but I think at one point I took that message a bit too seriously. My dad quit his job and spent a few years trying to take a business off the ground, which ended up losing him a lot of money. I was old enough to be involved in the family finances, and the fear of losing it all made me super frugal. It also pushed me to build the biggest safety net I could, so a job loss or any other tragic life event would not affect me that much. My sister was more carefree and kept living life as usual.
In college, as I was saving for a yearlong trip and other big goals, she would spend a lot on nights out, taxi rides home and clothes. I remember a few conversations where she would wonder why I had so much money for travel or investments, and I would try to point out that her lifestyle — partying and paying full price for things — did add up over the long run. But, she would shrug it off with a “YOLO” attitude.
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A few years later, she became a social worker, with the expected low paycheck attached. She got married and had a daughter. I was concerned because her lifestyle was heavily reliant on her husband’s paycheck. The big house, the holidays, the two cars — she couldn’t afford half of that on her own.
When they got divorced, reality hit her hard. She left the four-bedroom house to move into a 450-square-foot apartment, sleeping on the couch so her daughter could have the only bedroom. It was rough. Fortunately, she now has a partner again, so they rent a bigger place and life is a bit easier.
Still, I can’t help but wonder, how could two parents raise two people with such opposite financial habits?
The first thing that comes to mind is our slight age difference. We didn’t experience family events at the same time in our lives. She was younger and my parents tried to protect her, both by not pushing her to work early on and not letting her in on the family’s money concerns.
Also, our personalities are different. I am a planner at heart, and can see down the road how a spending decision would affect my lifestyle, or how a $50 night out every week adds up to $2,600 at the end of the year. That’s a crazy nice holiday, or, considering this is after-tax money, almost half of what it takes to max out your IRA for the year.
Lastly, I think we both chose career paths that fit our personalities; in my case, that meant business and entrepreneurship, and in hers, social work that barely pays the bills. While I am grateful for my parents letting us choose our professional paths, I think it is important to show your child early on the pros and cons of picking one career over another.
As a woman, I find it especially important to be able to afford to live on your own. You should marry for love, period. Having the ability to leave a relationship when things get bad is paramount for me and a pillar of my financial stability.
I am sure life will be good for both my sister and me. Nevertheless, I wish my parents had taught her the importance of saving so she could have weathered a divorce a bit better.
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