Back in the day…..

Decades ago people lived differently.  Finances were handled differently.  But, it worked.  It was really very simple.  They lived simply, and passed things on to another who could also get use out of it.  They had work, or house clothes, keeping their ‘Sunday best’ for just that.  School clothes were changed and play clothes were put on… passing on clothes not stained from play on to another child, and often one or two more.  Women wore aprons over their house-dress for the same reason.  Jackets, hats, mittens, boots were passed on.  Memories of a box with  hats, mismatched mittens and broken buckle boots, where whoever needed an item, would use what fit (or almost),  and often not matching. They were worn anyway. Warmth was the goal.

There was only one car for the family, (most women didn’t drive) and some didn’t have a car.  Families helped each other, multi generations living in the same house.  Everything was shared and passed to another to be used until it was completely worn out.  Nothing was wasted.

Socks were darned… a wooden darning egg was put inside the sock with the hole of the sock stretched a bit, and weaving thread back and forth waffle style, the hole was closed, and the sock used again. Shoes were heeled and resoled at the cobbler to pass on to others for a added year or more for several children.  Broken shoelaces were knotted and put back in the lace holes.  And yes, if the sole of a shoe was worn out before money was there to resole it, cardboard was cut to size and shape, and slid in like and innersole, until the cash was there for the cobbler bill.

Also remembered was ‘stretching’ food…. adding extra water to soup, cutting a piece of meat so each could have a bite or two, adding a little water to the dregs of the ketchup, mustard, etc to use every bit left in the bottle. Potatoes were cooked in various ways, and were filling.  Always a green and yellow vegetable gave us vitamins.  Powdered milk with added water was cheaper than whole milk. No food was ever wasted.  Children’s birthday parties meant ice cream and cake for dessert, along with a glass of tonic (soda). And a small (practical) gift for the birthday child made the day memorable.

We used baking soda or salt and water to brush our teeth, and because old fashioned, natural home remedies worked, we used them for whatever ailed us.  They are all available still, besides being cheaper. Check online…. you’ll be amazed.

Adding a little water to the almost empty shampoo bottle, a few shakes to it, and we got a few more shampoos.  Cutting off the leg of a nylon stocking, small soap ends were put the foot, and knotting it, we shook it back and forth in a bucket of water to use for a task.

With no specific specially made household cleaners, we used rubbing alcohol, or vinegar, or ammonia…each used separately diluting it with water and each for a specific task.  Again, check online.  These still work for any task, and are much cheaper too.

The point of this post is to let you know that things can be done differently yet work.

And….. back in the day….. there were no credit cards!  Cash was used ….. and if the cash wasn’t there, you went without, or you waited for it, while saving the money.

Any or all of these things can be implemented into your lifestyle….. saving money along the way.

Auditing your accounts = Knowing what you have and have spent

It is extremely important to audit your accounts….making sure all are balanced (to the penny), so that you won’t spend what isn’t there.

Although online banking does this, a check register is another way.  The written register subtracts a written check amount, subtracting it from the remaining balance.  The online version allows that same amount to ‘sit’ there until the amount is cashed, letting you think you have more than you do. This is how overdraft fees occur.  It shows more than what you have written out.

Savings accounts are just that….the money there is being saved for something specific… your Cash Reserve ‘Cushion’ Account – is used only should the time come when you are temporarily out of work, for whatever reason, thus receiving no paycheck.  Your goal for this account is 9 – 12 months of your income.  It will carry you over until you, once again, receive a regular income.  If you’re just starting it, it may seem daunting.  The thing is to start it and consistently add to it …. you probably won’t need it immediately, so this give you time to save and watch it grow.  It is there should your income stop for any reason.

The other account, the Liquid Emergency account is the one there for – only – things such as a large appliance purchase, a plumbing issue, car tires or repairs, dental, eyeglasses etc.   These accounts should ‘sit’ there and be added to frequently. Two or three thousand dollars is a good figure to have in it.

Checking accounts need to be continually checked and balanced….. it only takes minutes, yet is so important and should not be neglected.  Never.  And never….pay a bill before the deposit of cash for it has been added to your account.  Don’t think that ‘by the time they get the payment, the money will be there’…. That’s not always the case and it’s how wasteful overdraft fees occur.

If you use your credit card, save your sales slips – put them in an envelope in a handy drawer….when the bill comes in, get the envelope out and check off the slips to the bill.  It will probably check out right, but occasionally there is a charge which doesn’t belong to you.  If so, call the customer service number on the bill and clear up the issue with them.  If you don’t check your bill each month, you could pay for something that someone else purchased.  It happens occasionally.  Pay credit card bills in full and before the due date to avoid fees.

Frequency of income, and how you budget it goes hand in hand.

Most workers are paid on a set schedule….weekly, bi weekly, or monthly.  Per-diem  workers are paid sporadically, and depending on their hours worked.  Those who are self employed have busy and slower times, so uneven months. And most teachers  receive an annual salary paid evenly throughout the school season., but not Summers. Seasonal workers, landscapers, snowplow drivers, etc, are paid when they work.

When the paycheck is always the same, and you receive it on a set schedule, it’s easier to budget – because you receive it evenly throughout the year.

Teachers have to budget differently, figuring the annual total income into 12 months, and as each pay period arises, part of it should be set aside immediately so in the Summer months when they don’t receive a paycheck,….there is a ‘paycheck’ set aside. Some work a side job in the Summer to add to their income during those months.

Those who are self employed should, in their busy months, set aside some of the extra money earned for when any slower months arrives… in other words, be prepared….the money you’ve set aside is there as ‘fill-in’ to add in when you have a month that is a little slower – evening it out.

Seasonal workers may, and may not, have a regular income from another job.  If they do have a regular job,  the seasonal job is ‘gravy’.  Either way, seasonal is not always definite,

No matter how your income is received……be budget savvy.  Be disciplined. Don’t let yourself get short of cash.

Time flies….your financial future comes along fast

You’ve heard over and over about Retirement Accounts.  IRA, Roth, 401K, 403B, etc. Although your retirement years may seem aeons away, don’t neglect to open it as early as you can. And if you’re older, still open it.  Speak to someone in the HR department of your company to see if the company is set up for you to withdraw money automatically from your paycheck.  This is the best way to do this.  The money you don’t see, you won’t miss. Or if you work in a smaller business with no Retirement Plans available, you, yourself, set money aside each paycheck, putting it in a savings account until you can speak to a Financial Adviser.

Interview some reputable Financial Advisers.  Ask if they’re a Fiduciary (a person who acts in your best interest)… some are not a Fiduciary but rather an Adviser who gets a commission for a product (usually insurance) they sell to you.  Ask questions, understand answers, be informed before you make a final choice.  Your Adviser can be changed, and certainly if you find they aren’t working with your money the way you think they should or are comfortable with.  You want to know where your money is allocated and why it is allocated there.  Ask questions.  It’s your money.  You’re the boss, and if you don’t get or don’t understand the answers, change your Adviser.

People usually retire in mid to late 60’s.  So starting to save for it in your 20’s gives you 40 or so years for growth in your account(s).  You want to diversify your money.  The market can be very volatile, and if you have not spread out your money, and the market goes down in the area where your money is allocated, you now have less money in it.  No one has a crystal ball.  That’s why it’s best to diversify.  A good Adviser will guide you and will recalculate your investments accordingly to re-balance your account(s).  This is imperative.

As you get older, you may want to be a little more conservative.  You should meet with your Adviser at least annually, and speak with him/her with any questions or concerns in between.

Social Security has been around now for decades.  A deduction is taken from your paycheck, is put in the Social Security System Account. People retire and are eligible to receive Social Security Benefits each month, although it was never meant as an income that would sustain you fully.  Over the decades, the money there was allocated differently, and although millions receive benefits, the Social Security System will become insolvent in about 15 years, unless Congress fixes it.  In other words, don’t depend on it as an income for your retirement years.  Depend on only yourself.  So save, save, save now.

Whichever type of Retirement Account vehicle you choose, always try to put the maximum allowable amount in each year.  You will not regret it.

Every cent counts…..it’s common sense

Have you ever taken change out of your pocket or purse and set it aside in a jar?  Most have.  They’d do this each day or so without a thought, and then find a bigger jar as it was filling up, setting it aside in the corner, tossing change in it on a regular basis.

Then, they’d lug it to the bank or roll the coins themselves….and were pleasantly surprised at the total there. The same holds true with a savings account.  It starts small, but when added to on a continual basis….as much as you can comfortably put aside, it will become second nature….a very good habit.  Remember, every penny counts.

Pay yourself first…. Even when reducing your outstanding debt, add a few dollars to your savings.  You will not only be getting into the habit of doing it, but when your debt is paid off, you should now put the amount you had been using to pay off the debt and add it into your already opened savings account….as though you were still paying the debt.

Now, watch it grow (in your savings account).  And remember, the figure each month you see in the savings, is yours…not the creditors.  It also shows you how much you wasted over time, paying late fees and or interest fees.  Lesson learned.

Savings takes discipline then becomes second nature.  Do this for yourself, you deserve it.