Whatever happens in the world, have enough to navigate through the storms.
This is the root of my parents’ three money management tips (see below).
As proud immigrants to this country in 1920 (father) and 1949 (mother), my parents worked hard and saved to secure a piece of The American Dream.
PARENTS EMPHASIZED SAVING
My parents raised their three American-born children with sound money management principles–the same ones that helped them secure a piece of The American Dream.
Save enough to have enough when times are bad or when funds are urgently needed.
Applying their teachings takes discipline. It includes tracking spending to determine where to cut back in order to have enough for necessities and some FUN. Their lessons allowed my husband and I to weather the economic storms across thirty-three years and have enough for FUN times.
Having passed away in 1993 and 2001, I feel glad that my mother and father did not have to witness the Depression we’re trying to emerge from today. Yes, they would have survived just as they did when my father was laid off as a machinist and had a family to support. The frugal steps they took were hard on us kids (and would make for a compelling interview), but we got through them and here we are today!
JUXTAPOSED with HUSBAND’s PARENTS’ SPENDING
While my parents served as conservative role models, my husband’s parents had holes in their pockets, wallet, and purse. Like teenagers, they never had money when they needed it and called on their three children when they needed money. In contrast, as their three sons grew older, they adopted more conservative practices. I credit some of their success to the influence we wives have had on them.
MY PARENTS’ 3 MONEY MANAGEMENT TIPS
Ask yourself: Do I really NEED this?
A daily $4 coffee habit for each workday adds up to $1,000 a year.
An afternoon soda habit runs about $200 a year.
A three-day a week eating out habit will approach $4,000 a year.
Imagine the grand $5,200 vacation you would enjoy if you brought in a thermos of coffee, a home-made lunch (healthier), and your own soda.
It boils down to this–spend your money a little each day or save it for a special day.
Record your expenses–yes, every penny.
This will give you an idea of how much you are spending and on what.
The hassle of having to record what you spend will make you think before mindlessly stopping at the cafe or plugging change in the vending machine.
When times were tight for us, my husband and I reviewed our expenses and found that we could cut back on eating out from three times to once a week. Today, in an effort to eat healthier, we eat out less.
As much as possible, try to pay for purchases with cash. This insures you can afford them. Credit is deceptive and you may not have the money to pay for a purchase later. So save first and pay with cash. Once you have this discipline, if you must use a credit card, be sure to pay it off every month.
As Armenian Genocide survivors, my parents learned to depend on their own resources. Their life was not easy but they were willing to work hard. They met and married in America, having children later in life. I was born when my father was forty-nine and my mother was thirty-nine.
As the third (and rebellious) child of parents who were about to retire, my parents always insisted on my giving them a good enough reason why I needed something. Clothes were hand-me-downs or thrift store purchases. School supplies were bought on sale.
When I was a child, my mother encouraged me to save: “Brenda, if you deposit what you’ve earned in your savings account, I will give you ## cents to round it up to the next dollar. If you save ## dollars I will give you a dollar. By the time I left home, I had saved several thousand dollars.
When I was fifteen and a high school sophomore, my father pulled me aside, “I’m about to retire. You’re still young, and you’ll need to go to college. I don’t care what you major in but you must go to school. Since I’ll be on a limited income, you’ll have to pay for it.”
I thought, Heck. I’ll take more credits and graduate from high school early. Besides, I hated the social pressures of high school. I enrolled at the local university at age sixteen and was the first child to move out of my parents home at age eighteen. As the youngest of three, I not only paid for my entire college education but went ahead to also earn a graduate degree.
In the early eighties, I graduated into a similar economy as we have now–no jobs. It took a lot of entrepreneurial effort to succeed back then when inflation was rampant, interest rates were 15% or more, and creativity and fortitude were the essential ingredients to survive as they are today.
I still practice my parents’ lessons of saving, recording what I spend, and maintaining low debt (mortgage and a 0% car loan).
Brenda Avadian, MA
To read more, click on:Caregivers Managing Finances.