Whether we think much about them or not, we all hit financial milestones at some point throughout our childhood. It may be something as simple as getting that first piggybank, or something as exciting as that first bank account. Either way, those first financial steps in our young lives can be significant and meaningful. They can also help act to form the type of person we become financially as adults and even help to determine our savings habits for decades to come.
Here were some of the most important financial milestones that I experienced throughout my childhood and young adult years, knowledge that I hope to impart to my own children one day.
Age 7: My First Savings Account
I still remember opening my first savings account at the local bank. I had somewhere on the order of $700 at age seven with which to start my very own account. Each interest payment, I would enter in my passbook and keep diligent records of deposits and the rare withdrawal. It was a momentous occasion when I hit that first $1000 mark, and I began to learn early the power of good saving habits.
Age 9: My First Stock
I received my first shares of stock at age nine. It was 100 shares of Oak Industries, at about $1 per share. And while they remained in my grandfather’s name for accounting purposes and tax implications, they were mine nonetheless.
Each night when at my grandfather’s house, we would watch The Nightly Business Report on PBS, and I would check the stock page of the newspaper to see what my stock had done. Most days it remained unchanged or went up or down by 1/64 or 1/32, but sometimes there was the rare day that it went up a whole 1/16 or the catastrophic day when it dropped by that amount. While I think I ended up cashing out my shares once the stock hit 1 ½, gaining a whopping $50 on the deal, it was still a valuable learning experience.
Age 16: My First Certificate of Deposit
It wasn’t until I opened my first certificate of deposit as a sophomore in high school that I really began to realize the power of compound interest. By this point, I had saved enough money to make a sizeable deposit ($2000 as I recall) and was looking to earn more than the low interest rate I was getting on my savings account.
While I didn’t put all my eggs in one basket, choosing instead to give this investment a try with just a portion of my hard-earned savings, as I watched those interest payments accumulate over several years time, I grew to realize just how valuable compound interest can be.
Age 16: My First Car
There can be a lot of responsibilities that come with a first car, many of which a youngster might not fully be prepared for — at least I wasn’t. Sure, there was the initial price of the car, but then there are all the things that came with it. Costs for a flat tire, maintenance and repairs, gas, oil changes, insurance, and similar items added hundreds of dollars a year or more in extras to the cost of the vehicle.
While my first car only cost $1500 to purchase outright, I’d say I probably put two to three times that amount into it over the years in upkeep costs, a valuable lesson in the true costs of vehicle ownership.
Age 17: My First Government Savings Bond
I won my first government series EE savings bond in high school for an essay writing contest. I think it was only a $50 bond (which means it only cost $25), but it turned me on to a new form of saving money with which I had no prior experience.
I purchased more such bonds during college and eventually switched over to the I series bonds (inflation based) to better protect my money against the effects of inflation. Had I not received that first bond in high school though, I might never have made use of this super-secure method of saving.
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