4 Important Money Lessons I Learned From Growing Up in Foster Care

October is Money Month at Apartment Therapy! That means we’re sharing stories about saving money to buy a home, hacks to help you stick to your budget, and more all month. Head over here to see them all!

Budgeting can be challenging for anyone. In order to do it successfully, you often have to be diligent about where your money is going and have goals for what you want in the future. And these habits can be vastly affected by other things in your life, including your past relationship to money.

My own relationship with money and finances was majorly impacted not only by the practical presence of money (or lack thereof), but by how I grew up: I spent high school in foster care and that influenced me in numerous ways. Many of those aspects still impact who I am today, over a decade later. From teaching me to love my alone time to motivating me to see as many places as possible, being in foster care helped me become who I am. When I was younger, it was natural to focus on the profoundly negative ways it affected my life — such as when I had to live in a youth shelter — but, as I’ve experienced more, I’ve been able to see other ways I have been shaped by the adversity I once lived through. 

Some of my experiences — like moving abroad — were costly, but they were completely worth the expense for me. In order to make these things happen, I had to plan how I was going to earn and use each and every dollar. It took a significant amount of time and work, but it taught me to create financial systems that work for my needs.

Growing up without much money can affect people in different ways. Some end up with a scarcity mindset and tuck everything away because of the fear that it might all disappear eventually, while others go in the opposite direction and celebrate the life they have by spending every dime they can. I’ve spent time in both of these extremes, but have been able to settle nicely at the in-between. Here are four strategies I’ve used to make this happen, and how my time spent in foster care has informed or influenced each one. 

When I was younger, I worked as much as possible and still barely had enough to survive. Because of this, it was necessary for me to make budgeting a habit from the beginning: I knew what my bare-bones budget needed to be and used that to outline my plans. 

I created my first budget in high school, after I started working and needed to make sure I could buy food and new running shoes for cross-country practice. My system was very simple then: I wrote down how much I expected to earn each pay period, what I needed to buy during those two weeks, and how much of the rest I would save. This technique wasn’t perfect, but it worked; by the end of my freshman year, I had enough saved to pay for the entirety of a school trip to Germany with no outside support. 

From there, I learned about creating sinking funds, or separate saving accounts for each major purchase, and decided how to allocate my money, revising and updating my budget spreadsheet as I went. My current, more advanced system grew from that experience. To create it, I started with Smartsheet’s Personal Monthly Budget Template and adapted it for my needs. I start with my expected income and include my sinking funds, all of my monthly expenses, and each of my investment accounts. I follow a zero-based budget every month, which accounts for each dollar and leaves me with exactly $0 at the end of the month. Now that I make enough to comfortably live on after living paycheck-to-paycheck for so long, I know what’s important to me, making it easy for me to give every dollar a job.

Considering an estimated four out of 10 Americans cannot afford a $400 unexpected bill, prioritizing my emergency fund since I was 16 has had a profound impact on my financial standing. In high school, I was making just above minimum wage at Dunkin Donuts — so little that it was almost unfathomable to be saving anything — but I started with just $25 every pay period. This eventually added up to a substantial enough amount for me to count on when I needed it.

This habit proved fruitful, because more emergencies popped up than I could have expected. In college, I ended up with an expensive dental bill after my state-provided health insurance suddenly lapsed. At the time, I was just scraping by and the bill cost more than my food budget for the entire month. Another time, my car broke down on my way to work, and that bill was even higher. I had built my emergency fund for situations like this, however, and that kept me afloat during these predicaments and many more like them.

My emergency fund is now exponentially larger than it was then, but the system has remained the same: No matter my financial situation, I keep an emergency fund that is 100 percent separate from all of my other finances for when the unexpected happens. I keep my emergency fund at a separate bank — to ensure I never dip into it unless absolutely necessary — and have enough saved that I could live off of it for at least six months.

When I was younger, I never paid sticker price for anything, often more out of necessity than principle. I barely earned enough for the necessities, so the only option was to learn how to do everything for less. From only going to the movies on student nights to paying for my first skydiving experience with Groupon, I became an expert in finding deals for anything and everything. 

That tendency became a fruitful habit and now I almost never buy anything without stacking cashback through Rakuten, credit card points, and whichever promo codes I can find. This habit has allowed me to experience new things and buy what I need without stressing too much about the cost. When I was in foster care and had few opportunities for earning money, this was my only option. Now, it’s a way for me to afford to do even more.

When I was in foster care, I wasn’t always allowed to travel, participate in extracurricular activities, or even spend much time on my own. These limitations inspired me to want to do everything I could as soon as I was able to. I have spent every day since then trying to make my past self proud — I went skydiving at 18, studied in London at 20, moved to Germany at 23, and have continued on the adventures every year since.

Adventures, travel, and entertainment cost money and preparing for these experiences took quite a bit of planning. A common mistake people make when budgeting is not planning for enough “fun money.” Doing so can make your budget feel far too restrictive, which is a reason that many people give up on their monetary goals or struggle to get started in the first place. 

I have always included things I can look forward to in my budget, even when I was just making enough to live on. As with the other categories, my splurges have increased as I have been able to afford a bit more, but I have always made sure to leave enough entertainment money each month in my zero-based budget.