When it comes to money and spending, some of the things our parents and grandparents swore by are not so silly in today’s uncertain Covid financial times.
“Spend less and save for a rainy day”
If you take this little bit of advice seriously and build in those shock absorbers to your financial well being then you might just survive and thrive.
Try cutting costs, seeking out the best deal when it comes to service providers. Control your everyday spending and look at getting better deals from your bank and consolidate your debt.
If you don’t have the money to eat out, then don’t!
Banks are pretty good these days at showing you a breakdown of your spending.
Compare a recent monthly statement during lockdown to one from a year ago in the same month and you might see that there are some pretty good ways of saving on things you actually can do without.
Perhaps there are some permanent spending changes you can make to help you save or redirect to items or experiences you value more than others?
Pay cash if you can
My parents and grandparents never owned a credit card. They paid cash for everything and tracked every penny in a passbook.
Take care of your things
Today, we live in a throw-away society where it’s easy and relatively cheap to replace most things we own. Not so for our grandparents. Every item was considered an investment and, therefore, everything was diligently cleaned, waxed, oiled, painted, patched, and repaired. Their stuff lasted forever, and that certainly saved money.
Learn practical skills
Learn to fix things, grow things, or refurbish things. You will feel rewarded by your achievement and save money along the way. Today, developing frugal skills is a great way to build self reliance and save money for the future.
People who grew up during the Great Depression had to channel their inner creativity to survive. Their ingenuity helped them feed their families, earn an income, keep their kids clothed, and save for a rainy day. It’s the same today; Discover ways to boost creativity and it will impact positively on our budgets and keep us engaged and inspired by our efforts
It’s better to own
With few exceptions, it’s better to own than rent, especially during tough economic times. Access to money-producing assets (land, a house, a paid-off car, etc) helped many generations survive and build wealth.
Always shop around
Always shop around for every available deal before making a purchasing decision, no matter what you’re getting. The internet makes it so easy these days. More importantly, shop around when dealing with more complicated financial products like home loans or insurance.
Have an emergency fund
Some people are very good savers, but then they make the mistake of tying up all their cash in assets such as stocks. Always have a savings account for a rainy day.
Be diligent with setting up an emergency fund and ensure that you have an adequate level of cash flow for your needs.
Good advice from our parents and grandparents
Debt is a form of slavery
Keep your overheads lower than your income, and pocket the difference.
Pay yourself first
Automate savings and make that an unwavering part of your routine. Compounding interest is a great way to save. Put a little away each week no matter what or how little it is.
Forget about impressing the neighbours
- Buying designer handbags and fancy cars might impress others, but don’t confuse easy access to credit with real wealth. Real wealth is usually the product of responsible spending, maximising the value of every dollar and trading glitz and glamour for modesty and security.
Saving is a long-term proposition. No matter how modest the amount, starting the savings habit early pays off.
Set a budget and stick to it
- It is very easy to overspend so set a budget and stick to it religiously.