I Spent $1,000 of My $3,000 Savings on a 5-Day Vacation When I Was 21. Here Is Why It Was Not a Smart Decision.
It’s important to spend money on things that make you happy but, when does it become irresponsible?
Hi, my name is Chukwuma Okereke and I’m here to share a little bit on my financial journey. Ever since I got my first job at Big 5 and started making my own money, I never really paid attention to my finances and saving. I just made sure I had enough money in my account to buy food or clothing I wanted at the time. That is definitely not the right way to go about things, but I am definitely lucky in that I came from a middle-class family with two working parents. For the longest time, my brother always encouraged me to invest but I never took it seriously because I didn’t want to take the time to learn and I also thought I didn’t have enough money to invest. This was definitely a mistake on my part.
I have an older sister that lives in California, so my family and I often take trips there for vacation. Two years ago, I went to visit her, and take a brief vacation. Listen to me when I tell you I was not financially prepared for this at all.
Reckless Spending, Is Not A Good Strategy
I had just graduated from college and had been traveling for some other summer trips, so I had not had time to really budget anything for this trip. My brother on the other hand was well prepared and had decided we were staying at a 5-star hotel and renting a Porsche (as practice for his future car). Our goal was to simply drive around, and hit up as many food spots as we could. On one occasion, we drove an hour to try a taco truck, and the day before, we ate steak on the 70th floor of the Intercontinental Hotel at La Boucherie.
All this wasn’t cheap! Over the course of 5 days, I managed to spend $1,000 when I barely had $3,000 to my name!
Since I hadn’t saved properly, I was constantly transferring funds from my savings to my checking account to buy things. That my friends…is no way to live. At one point I had to transfer money just to buy a basic denim jacket, that’s when I knew I needed to make some changes.
Starting Fresh
After our trip I started investing a little. I started out with Acorns, which invests the spare change from any purchase you make using a debit card. Next, I started investing on the Robinhood mobile app which allows for quick, easy access to basic, and complex investment tools. Concerned that you don’t have enough money to start investing? I started with investing with $50!
Shortly after returning from California, I landed my first full-time job and was actually making fairly good money. Since I was living at home at this point, I was able to reduce my spending, starting saving, and I began to invest more regularly. One memory I will always have was being on vacation two years ago, and needing to transfer money from my savings account, to my checking account to afford a jacket. Doesn’t sound so bad? Well…the jacket was only $40.
Note: The purpose of a savings account, is to SAVE. Transferring money out of it, to buy items that are not necessities, is a surefire way to ensure you don’t hit your savings goals. Objectively, it is bad practice to use money from your savings for anything outside of a financial emergency.
I use that memory as a reminder of how far I’ve come on my financial journey.
I know saving is a tough thing to do. People come from so many different backgrounds, and have a variety of responsibilities, but I think one thing everyone can do is keep track of their expenses and budget accordingly. This way you find out what you might be overspending on and can make adjustments to where you can start saving. Even if you start out saving $10 a week, it’ll add up in the end.
Want to hear more from Chukwuma? Watch The Most Money I’ve Ever Spent
