I wish that when I was in school there had been a course on how to teach the gift of money management. My husband and I both grew up in families with limited finances, although we didn’t know it at the time. When my dates came over to pick me up for the night I always wondered if they could see the pillows under the blanket that covered the hole in the couch. I think we called them davenports back then. Wow, that word just came to my mind. Life is all about memories, right?
I grew up with homemade bread my mother made. When I would go to friends after school we would take her soft white bread and spread a thick layer of butter (I bet it was margarine) and then sprinkle it with cinnamon and sugar. It tasted like dessert to me. My mom made great bread, but we never had store bought fluffy white bread. I sewed all of my clothes from the time I was very young, and I’m grateful I learned early in life to sew. I think the fabric was cheaper back then. Now it’s cheaper to go to some of our local stores to buy clothes on sale or clearance. I think I had 5 dresses (yep we had to wear dresses to school), one for each day. I go to my daughter’s houses and their closets are filled with clothes. Man, I would have loved to have had seven dresses to choose from for school. My sisters and I had one pair of shoes. Yep, no matching shoes to every outfit for my family or special ones to use outside. I just laugh because life changes for each of us, and that’s a good thing.
Mark, my husband always wanted shirts like the other guys in school when he was young. You know the ones with the button down collars? He spent one whole night sewing on buttons to the collars of his shirts so he had “button” down shirts like the other kids. Mark lived in Salt Lake City, Utah where the snow in the winter is just about the best in the USA! If you snow-ski you can picture the white fluffy powder snow and the sunshine peeking through the trees on the ski lift. In Utah, most ski resorts have buses that take kids up to learn to ski. Our daughters learned to ski at a very young age by taking that bus with friends up to some of the ski resorts. Now let me talk about his ski outfit. He started skiing about the time manufacturers were designing skis with “safety bindings” that would let the boots come out when you fall so you were less likely to sprain an ankle or worse yet, break a leg. His parents mentioned there was a pair of skis out in the shed and that he should use those to make sure he really wanted to participate, then they could consider buying the fancy new skis. The skis he used had the old “bear trap” bindings that would let the boot out no matter what. The newer ski poles had small baskets at the bottom, his were large, like pasta strainers. Most of the kids on the ski bus had fancy new boots that went up the calf, almost to the knee for better support. His boots were the ones he used to go hiking. His “ski clothes” amounted to Levi’s, a flannel shirt, stocking cap and oversized jacket with regular snow gloves. We still laugh when we think of how he must have looked when he climbed on that ski school bus at Bryant Junior High.
You might be wondering why I am telling you all of this. I learned at a very young age all about money management. I cleaned houses and babysat kids from the time I was eight years old. Now most parents wouldn’t think of having a neighbor child tend their children for any length of time unless the sitter was 12 years of age or older. I was raised by a single mom and my sisters and I took the laundry each week to a laundromat while my mother worked to put food on the table. If there had been food stamps my mother would have been too proud to accept them. There was no entitlement wanted or expected, and that’s how I was raised. I believe there are people who occasionally need help from the government to feed their families. I get that. But we need to teach people that they are not entitled to live off the government for years.
When my husband was going to school full time at the University of Utah he worked two jobs to cover his schooling costs, our housing, and food. We never took out a student loan. We both worked several jobs so we would not have any school debt. I’m not sure what was available back then regarding school loans and grants for education. Wish we had known the best way to research for financial guidance, but neither of our parents had gone to college and we were pretty naive. As a former bank officer, I witnessed a lot of different client families and how they managed their finances. It gave me good insight about how things could be if sound financial management was applied. I’ve listed some things we all should consider:
- Teach your children to work. They are watching us…teach by example.
- Teach your children to want less “stuff”.
- Learn to save 10% of your income, or more if possible.
- Live on less than you earn.
- If you get a raise, save the money and continue to live on what you make today.
- Save for your retirement NOW, not later.
- Never ever take out a 40-year loan on your house because you will not only get a higher interest rate, but the loan payment amount between a 30-year and 40-year loan is minimal. If you qualify for a 30-year loan that’s great. If you can qualify for a 20-year loan that’s fabulous. If you can qualify for a 15-year loan you rock! Buy a smaller home, we don’t need a monument to show our success. Either way, pay extra on every mortgage payment you can. Do without the “toys” in order to pay off your house. Trust me, you will smile when you retire.
- Stop giving gifts that our kids or grandkids really do not need. We need to stop the entitlement mentality. I was lucky to get a used bike for Christmas. I was thrilled.
- Make a budget and learn to stick to it. You can start by using my printable budget sheet. Start with your house payment or rent payment because we need to pay for our housing first. Food Storage Moms Printable Budget. If you write it down you know where the money is going each money. Determine your net income and see where you stand. If your income is a bit short….start by cutting out things like cable TV extravagant plans, fancy cell phone service or wherever you can cut expenses. If it means going back to a flip phone, so be it.
- My snowball effect of paying off debt: pay off the smallest debt first. Pay the minimum amounts on the other debts. Now, when the first credit card or car is paid off use the $$$ you used to pay that debt off and add it to the next lowest payment amount. Continue to pay the minimum amount on your other debt. Every time you pay off the next debt you continue adding the $$$ to pay off another debt. Now when you get to the point you only have a house payment, you rock! Now start paying all that extra $$$ on your house. Continue your savings plan so you can pay cash for your next car when needed.
- Some people put cash in envelopes for all expenses that are not online. I suggest setting up (automatic) ACH payments for your monthly ongoing payments. I seldom write checks, literally. I use my debit card for my monthly grocery shopping spree. The less I go to the store the more money I can save. Few of us have the self restraint to pay off our credit cards when the statement comes. If you can great, but it sure is a temptation to “let it slide” and just make a minimum payment, hoping next month will provide the extra cash to pay if off.
- Cook from scratch, this is why I am starting my Back to Basics Series. I started last week with “How To Use a Wheat Grinder”. You will save money once you get your pantry stocked with the necessary items to be able to cook from scratch. Trust me, you will save lots of $$$$, I promise.
- When you think of purchases start thinking about this: do I need it or do I want it? Is the item really necessary?
- Turn off the lights in your home when you are NOT in that room. Remember, most all electronics are using electricity even when turned off. Start replacing your light bulbs with LED bulbs. Yes, they are expensive but they will save you money in the long run. Obviously, if you are renting a home for a short time I would not recommend this.
- Take shorter showers….just think of the amount of water you will save plus the amount of energy to heat it.
- Consider going to one car if it’s just the two of you. We’ve been using one car for about the last five or six years. Sure, not as convenient, but we’ve saved a ton of money. If your family has multiple cars, consider cutting back to fewer. It’s amazing how much is saved on fuel, insurance, upkeep and more, even after the car is paid off.
- Consider using public transit, if available. We used the Trax light rail system in Salt Lake City the last time we visited family. It was super cheap and not as troublesome as I had expected.
- For both winter and summer, months make sure your home is energy efficient. Check doors and windows for air leaks. Put extra insulation in the attic. Use a programmable thermostat and set the temperature to be comfortable when home, but higher or lower when you aren’t at home, depending on the season.
- Try setting your water heater to a lower temperature. Each degree you set it lower will save on your gas or electric bill. Also, look into putting an insulation blanket on the water heater and possibly insulating the water pipes as they come into your home.
- We all love to eat out, myself included. We know people who eat out most of their meals. Mark and I enjoy meals at home, not only because it saves us money, but also because we tend to eat less food and the food also tends to be healthier. Sure, we go out from time to time, particularly as friends come into town for a visit, but even then, we often invite them over for the meal and we’ll sit around and tell stories about previously adventures.
I hope this post today helps you teach the gift of money management to your family members. It’s all about saving one penny, nickel, dime, quarter or dollar at a time. May God bless you in your efforts to be self-sufficient.