A while back I posted things that companies could do and some things that they should not do in order to be frugal. Having operating capital will always make success much easier to achieve. Now that I am unemployed, I’ve decided to revisit this topic. This time I want to revisit it from a personal perspective. Operating capital is pretty important on a personal level too, but there are so many people who live paycheck to paycheck out there.
In a lot of ways I was quite fortunate to grow up in a very frugal household. My parents were immigrants who came to this country with only a few dollars in their pockets. American was the land of opportunity and they were going to stay for a few years, save some cash and then head home to the motherland. Over 50 years have passed since they arrived, and they never ended up going back. In the grand scheme of things my parents were not a rags to riches story, but they always made sure we had enough. I have to give all of that credit to my mother. Dad was good at coming up with hair-brained schemes. Mom, wow, she was like the drop of water that ground down rock when it came to her determination to save. My parents never managed to make a lot of money, but they sure saved managed to save enough for retirement and to put me through college.
Important things I learned from my mom:
1. Buy the best you can afford and then keep it forever.
2. If you’re going to use credit, pay it off before any interest charges accrue. Avoid loans that aren’t mortgages if at all possible.
3. Put aside at least 10% of your income every paycheck. When you get a raise, put all of that away too if you can afford it. Don’t just save your money, invest it. After 10 or 20 years of doing this you’ll find that you can live on 50% of what you make.
4. Home cooked is better, cheaper, and healthier. Many times home made is too.
5. Comparison shop. Wait for a sale. It will always come.
6. Don’t go grocery shopping hungry. (ok, this one is my husband) My mom has the corollary – always shop with a list.
7. Don’t buy the hottest new item as an early adopter, you will overpay.
8. For big ticket items, always ask for a discount. Just make sure to be nice about it.
9. Learn how to do things yourself.
10. Sometimes things that are free are the most fun to do.
I’ve always subscribed to these lessons. Yes, occasionally there have been some lapses, but that is inevitable for anyone. I’ve bought some expensive toys that I’ve later regretted. I have a few too many things in my house that I don’t really need. It could be far worse.
My most recent example of of cost cutting is that I spent 3 days painting deck railings that are two and three stories above the ground. This is some of the nastiest knee and back killing painting you can do. You’re always bending over to paint the outside or kneeling to reach the inside. I spent $160 on top of the line paint that should stick like glue. I got a quote to paint the railings after I had the house first built…. by doing it myself I saved $5000 in 2004 dollars. Many folks would call me crazy. I figure I got a lot of exercise in the fresh air and sunshine and my house looks great. Right now I also have the time to do it.
That is a big example. I have a lot of little ones too. I rarely go out to lunch – $10 a day adds up over time. I’ve been known to use coupons to save a few bucks. The bargain matinee is the way to see movies… and so on. Strangely, not doing all of those things doesn’t make me feel like I am missing anything. I spend my extra money on nice vacations and my hobbies (none of which are cheap I’m afraid).
Right now I may be unemployed, but thanks to my mom and all she taught me – I’ve got an emergency fund saved and I don’t have to worry for a while. I hope that if this happens to you that you’ll be in the same boat. If not, start planning to do better. Your stress-level will thank you.