When I was just few days old, my mother abandoned me at the orphanage. I was a mistake and she had no intentions to consider me her daughter.
After 4-5 years of lawsuits and all the jazz, my father and his parents were finally able to win custody and take me ‘home’. I always considered my life really started when I was 5 years old.
My grandmother has been my hero all this time and the one that taught me everything I should know. She’s been my mother, my grandmother and closest friend, someone I love and cherish every day. She’s 84 now and I really hope we’ll still have some more time together.
As you can guess, living with the ‘elderly’ allowed me to learn a lot about their ways of thinking and get some very valuable money lessons as well.
Life back then was tough. They came with nothing on their backs decades ago, ‘pushed’ by the famine that hit Romania after the Second World War. They started a family and worked like crazy to put food on the table and raise their son, niece and other relatives that needed support.
My grandmother was always a ‘giver’ and could never refuse help to someone in need.
Another issue for them was that most of their lives the country was under the Communist rule. This meant little access to food and any household items you’d need. If you wanted to get a fridge, you had to get the approval to buy one and then see when the store would sell few items so that you can grab one.
Food was rationed (and many things were impossible to find anyway), the stores were usually empty and would get some merchandise every once in a while.
My grandparents didn’t have any ‘glamorous’ jobs and never complained about it.
I was lucky enough to do exactly what I liked, but they didn’t have the ‘luxury’. They worked anywhere the Party sent them and whatever they could to put food on the table.
While we were never too ‘relaxed’ financially, there was always food on the table and the bills were paid in time. Here is what my grandmother used to do and what I finally learned from her:
1. Pay the bills ON TIME
My folks come from the countryside. They were poor growing up and turned into hard-working and honest adults. They did understand that, once you benefit from a service, you’re supposed to PAY for it.
We’d get the bills or find out what we need to pay and, as soon as they got their salary and later the pension, they’d FIRST pay the utilities. We were NEVER late with a payment and, as I grew up and got my own bills, they’d be pretty annoyed if I was late even a day.
2. Debt payment was always a top priority
They didn’t have huge salaries and household items were scarce. When you finally got approved to buy a carpet, a fridge or a bed, you went and got it, otherwise you’d probably wait for more months/years.
Sure, this meant that not always they’d have the money saved upfront (not to mention in many cases they’d try to buy everything they could, so that they don’t waste the opportunity).
The State allowed them to pay monthly for the items and few friends would take the loans under their name, so that my folks could get the needed furniture and appliances.
When their friends needed such help, my folks would do the same thing. There were usually up to 12 monthly payments for each item and the interest was little.
Coming with almost nothing in the city and having to fill a 3 room apartment wasn’t easy, so these tricks allowed my grandparents and their close friends to access the much needed items and also pay for them.
I am against ‘consumer debt’ myself, but the situation is different now: I can save at my own pace for anything we need and the stores are filled with all kinds of merchandise. I don’t need approval to get 100 fridges if I want to buy them, when I have the money and the willingness to make a purchase, all I need to do is hop into my car and buy the stuff.
Anyway, even if many of the things they bought ‘for the home’ were via monthly payments, my folks were again almost religiously focused with the payments. I recall seeing my grandmother with the cash (they didn’t use banks/cards back then) in her hand, counting the money and telling me: “first we pay the debt, then the bills, then we eat”.
They were never late with the payment, their friends never had to wait for more to get the money or pay the loans themselves. My grandparents would pay everything in time and then see how they can stretch the money more. No minimum payments, no late payment, no nothing. They had debt and were paying it off as fast as possible.
3. Budgeting might not be fun, but it’s soooo helpful
My grandmother didn’t have a computer or a fancy smartphone app. She wrote down on the paper how much money she got that month and how much she has to pay: utilities, monthly payments (if she still had loans), food budget, my school expenses etc.
For years I never bothered keeping a budget and I can now see what a huge mistake this was. It’s pretty annoying to ‘waste’ time writing about all the stuff you ‘owe’ and maybe it makes you feel miserable seeing how much of your hard-worked money won’t stick with you for too long, but it’s a great exercise in money management and it helps steadying your cash flow like nothing else.
I am now keeping track of my expenses (have done it for the entire year and it really helps me see where my money is going) and I’m also keeping a budget. Money is not that tight (we do have enough to pay the bills and even save), but these two really help me be even better organized. With a toddler to care for, better money management and retirement planning will go a long way for us..
4. If things break, we can try fix them
Because of the small wages and (especially) the difficulty to find new merchandise to replace the broken one, people would try and FIX their stuff, before throwing it away. Did the TV break? OK, we don’t discard it in the garbage, we get someone to try fix it. Same with the shoes (even the shoes), the fridge, the furniture.
I admit that this is one of the few things that didn’t really ‘stuck’ to me. I’m usually pretty fast with replacing stuff, but there were cases when I understood that having someone repair it might give the item few more extra years.
Sure, some things cannot be repaired, but, as soon as you bother keep this as an alternative, you’ll notice that fixing can make said item work for more years. Instead of replacing it (and having the new one break, too), you can ‘stretch’ the item’s ‘life’ and save money.
5. We don’t need all this crap
My folks were never minimalists, but they surely weren’t the ‘consumers’ we are today. Growing up, I had few pairs of pants, few pairs of shoes, blouses, t-shirts, dresses etc.
I never had ‘enough’ (especially a teenager never has ‘enough’ stuff), but I did have what was needed. When I’d give into the frustration of not having a huge wardrobe I’d promise myself that, when I’ll grow up, my closet will be filled with clothing. Tens of pairs of jeans, tens of t-shirts etc.
Let’s say I’m all grown up now. My husband has 3-4 times more clothes than I have and even he said to me that I should buy more stuff (well, imagine having a husband who thinks his wife doesn’t have enough junk in the closet).
And yet they are enough. I work from home, so I don’t need a lot of ‘elegant’ stuff, I do have enough clothing, but surely not hundreds of blouses.
My choice to keep it this ‘minimal’ doesn’t come from not liking to buy clothing (I’m a woman, still), or from not affording it, I just know most of it won’t be needed. Even with the wardrobe I currently own, a small percentage of the clothing gets worn more times and some items have been there for 3-4 years and were never worn once. If you’ll take a close look at your own behavior, you’ll see that you also apply Pareto’s principle (even if not knowing it): few items get the most wear.
Then the conclusion comes pretty easily: why fill my wardrobe with stuff, if I’ll still wear the few items I love so dearly?
Will I buy more stuff? Sure thing. As soon as I think there’s something needed in my wardrobe, I’ll hit the stores and get it.
6. We don’t replace working items
My grandparents had to use their stuff until it broke down beyond repair mainly because they couldn’t purchase new ones immediately (not to mention the money was tight, so having something replaced wasn’t always something they enjoyed doing).
Growing up, I realized there’s also another good reason not to go crazy anytime a company releases a new ‘version’: it’s a money-drain.
This is the reason why I don’t replace my car. It’s a 7 year old car (8 next April), that’s in great condition and will low mileage. Sure, if I were to give into the ‘normal’ ways for many people, as soon as I finished paying for it, I should have gotten the next model. Opel (Vauxhall as it is known in the UK/US) have released a brand new Corsa version already. Does it have anything new compared to mine? Probably. Do I need it? Hell no.
It’s the same with our gadgets. Husband and I are both ‘techy’, so we do have ‘what we need’ as modern people. And yet we don’t replace the items, unless they break.
This makes us the proud owners of a 2004 MP3 player (2002 iPod he got from someone), 2011 Nook Tablet, DSLR cameras and camcorder, 2009 mobile phones etc. All our stuff is in great condition (we care for our gadgets) and works perfectly. So, only when they are breaking down and are impossible to repair, we buy something that’s been recently launched to last us for few years more.
I never cared that Lenovo (or HP – my last laptop) released a new version of the ‘hardware’ I use. If the laptop is working, everything else is ‘noise’. We’ll replace our phones when they ‘die’, not when Samsung or Blackberry launch the 4th new version this year.
7. We don’t bother keeping up with the Joneses, we know it’s impossible
Back then there were people who struggled financially and few who really did very well.
My folks had such friends with better wages and some really influential jobs, who had cars, 2-3 apartments etc. We didn’t have riches and my folks never bothered with the difference between what we owned and these few ‘fortunate’ people.
I see so many people now who go into debt just to have a fancy car, so that they can impress their neighbors, or show off their exotic vacations.
We never cared in my family for this crap. My folks were very candid when it comes to discuss about how others live: ‘we’re poor people’. They weren’t actually poor people, but they understood there’s a big difference between what others can do and what we could accomplish. Their only focus was to keep the family well fed, clothed and have a roof above our heads.
Something from their attitude fortunately rubbed on me. I am not concerned with what others have or can do. Sure, I am all ears when someone who is successful is willing to share some ideas of how he/she did it, but I don’t envy people for having a better car than I have or going on a better vacation than I could afford.
Life is not a contest with the others, life is just a journey and a contest with ourselves. I try to be better each day and accomplish more for me and my family, everything else doesn’t have any importance.
I’d like you to share your stories as well, with people who have inspired you to become more financially responsible. You can leave a comment here or even create an article on your blog.