You don't generally associate "divorce" with "excellent personal finance education."
Most children of divorced parents might argue that divorce is a terrible, emotionally unpleasant time -- particularly where money is concerned.
While I agree that it can be a miserable time, emotionally and financially, I also credit my parents' divorce with some of the most important financial lessons of my life, and for making me the financially responsible adult I am today.
I come from a relatively wealthy background -- I grew up in a safe, affluent suburb of New York City, where I was raised by two parents with advanced degrees, and went to excellent schools with kids in similar situations. For much of my life, I didn't have to really worry about shopping for school supplies, or getting the clothes I wanted or having money to go to the movies or other incidentals. It was all given to me, just like it was given to my friends.
And then, at the age of fifteen, my parents got divorced. It was a messy, unpleasant period in our lives, and not worth recounting here (who wants to hear about another suburban kid whose parents fought and eventually separated?).
But as unpleasant as the experience was, I consider it one of the best things that could have happened to me... financially. While my friends were going about their youth unconcerned with material concerns, suddenly I had to learn relatively quickly what it meant to have a handle on your money... and your life.
Here are the three key lessons I learned as a result.
Lesson #1: Financial Independence Is Everything
Around the time I was 15, my mother made a discovery: My father had been slowly draining our family's savings, retirement and checking accounts. By the time my mother realized what was happening, the money was gone. My mom had thought his yearly bonuses would be going toward college for me and my sister, but not only was my dad a big spender, unbeknownst to her, he had also been buying regular tickets to visit his girlfriend in Greece. The money went fast.
Here, I witnessed firsthand one of the most important financial lessons of my life: It is essential as a woman (and for anyone in a relationship, although women are particularly vulnerable) to know where your money is, and to keep an eye on your household finances. You should never rely on someone else to manage everything for you.
Does this mean, now that I'm grown and married myself, that I regard my husband with perpetual skepticism, always under the assumption that he's about to take the money and run? Not at all. But we both keep an eye on our joint accounts (which makes good sense for a number of reasons, including monitoring identity and credit card theft), and we both discuss how our money is being saved and spent. I also know I will always stay in the workforce, even if and when we have children.
My mother, who had a PhD and a J.D., decided to stay home with my sister and me when we were young, then found a job in the Brooklyn District Attorney's office, which eventually turned into a position as a full-time prosecutor after the divorce. As I watched her realize how difficult it would be to re-enter the workforce, I realized how important it is for women to be able to support themselves financially, regardless of circumstance. Divorce aside, in case of any kind of tragedy (death, unemployment, etc.), I want to be able to rely on myself for income.
Lesson #2: Needs Are Expensive
After the divorce, my mother was adamant that we stay in our house and school district. Her desire to make sure we weren't totally uprooted from our lives, regardless of finances, meant that I soon had to rely on myself for all of those financial incidentals I had always received from my parents.
While my mother was concerned with getting food on the table and paying for medical care (we didn't have health insurance -- we had been on my dad's plan and he changed jobs, and my mom was looking for work -- and I ended up forgoing dentist's visits for five years), I soon learned what all of those teenage "needs" cost, and how to budget for them.
From gas for my old Honda (a hand-me-down from my grandmother), to movie tickets for nights out with friends, I learned how much money I would need and what I could go without. I picked up more babysitting shifts than I ever had before, took summer jobs at the local Barnes & Noble and as a tutor, and managed (and saved) my own money.
There were days when I hated everything about our situation. One winter day, a pipe burst in our basement, and my mother had no idea what to do, so I called my father and figured out how to fix it. I remember thinking it was ridiculous, but it really taught me how to take control of a situation when I need to. I can fix things around the house; I'm proactive in making things happen; I'm never, ever late on a bill. It wasn't fun, but it was certainly character-building.
Now, I don't mind making a dollar stretch (cereal for dinner is a frequent guilty pleasure), and I know how to budget realistically. I also realized that I became more independent than many of my peers at an early age. In college, I used my own money to buy clothes or take trips, while many friends were still fully supported by their parents. Resisting spending on non-essentials early on definitely helped shape my habits as an adult.
Lesson #3: College Isn't a Given
Even more importantly, what seemed like a tragedy -- losing my college savings account -- ensured that I knew the value of a college education, and taught me how to find scholarship money and financial aid. My guidance counselor worked with me to find schools that had great financial aid and vouchers so we didn't have to pay for the SAT or ACT.
I'd always been smart, and a good student, but I definitely kicked myself into high gear after my parents' divorce.
I'm not sure how much of that was the hyper-competitive academic environment my high school fostered, and how much was the knowledge that I'd have to do very, very well to get into the kinds of schools that would provide excellent financial aid. Either way, I started figuring out that if I wanted something, I would have to go after it, whether that was an after-school job or leadership positions at my school. I stopped being afraid to ask for what I wanted.
I ended up going to Wellesley College, which has great financial aid. During those four years, I was able to go abroad to London, to intern in Washington, D.C., one summer, and to intern another summer at a literary agency with a $3,000 stipend. That summer at the literary agency, I gave myself $5 for a "fun budget" every week and put any remaining money into a savings account.
Between my jobs during the school year (tutoring, babysitting and working on campus), a few graduation gifts and the remainders of my stipends, I graduated with $12,000 of savings... which I used to fully pay off my relatively small college debt. Now, I'm extremely proud to say I've saved another $10,000 in an emergency fund. (The secret to this? No fun, ever. I don't recommend it.)
My family is in a much better place, financially and emotionally, than we were during those years during and after the divorce, and I wouldn't wish that kind of steep financial learning curve on other teenagers.
But while divorce can seem like the worst thing to happen to a family, what we went through turned me into a more responsible adult than I might otherwise have been, and for that I'm incredibly grateful.
Abigail Dalton graduated from Wellesley College in 2008 with a degree in English and history. She has worked in publishing and the non-profit sector, first in New York, and now in the Boston area.
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