Monday, November 24, 2014

Spending habits

My first savings bank
I've been thinking recently about the way we spend our money, and how and why we have developed the style we have. This is a huge topic involving at least a hundred years and multiple generations. However, I'm going to try to summarize it in this blog post.

Ward and I both came from parents who had difficult lives growing up. Tragic circumstances as well as effects from the Great Depression often left them wondering where their next meal was coming from and where they would sleep that night. However, through the foresight of their parents, they learned that education and hard work were the way out. How did this translate into how they raised their kids? I'll give you a glimpse through my eyes.

The result of my mother not always knowing where her next meal was coming from was to make sure that food was never an issue. When I was growing up, we always had plenty to eat. We grew most of our food and got our meat from hunting, but there was never any concern about whether there was enough money for baking a cake or making a pizza. My mother had ideas about good nutrition that sometimes limited what we ate, but we were never deprived in any way.

My mother, the 1st one in her family to graduate high school.
Also, self sufficiency and education were top values. Early on, I heard that you should always be able to take care of yourself. You might get married someday, but you should have enough education for a job that can support your family. You never know what might happen. My mother was the fortunate one in her family to get an education and she saw how much better she fared than her siblings. Thus while we worked very hard at home, an extra job outside was not a priority until after our studies were done. And my parents made sure that each of their four kids had a college education. My father worked overtime and my mother worked two jobs to make sure this happened. Because like having enough food, education was a priority.

How did this translate into the way that Ward and I managed our lives? Because we had a good education, we had a decent jobs. However, we followed in our parents footsteps and we were careful with the way we spent our money. We never bought a house that we couldn't afford on one salary. Before I quit my job to be home with the kids, we put all of our new spending habits into practice to make sure that it was what we wanted to do. I knew the savings of our groceries down to the penny. I volunteered in a thrift shop and most of our clothes and toys came from there. We knew every free activity in the area. Ward and I enjoyed game nights and meals with our friends. Our every day frugal habits allowed us to contribute to college and retirement funds and take trips back to see the relatives. It also allowed us to eat out occasionally or go to a special museum or to buy furniture for our house.

Then we made another move to be closer to our relatives which is where we live now. We moved into an area that had a much higher cost of living. Our new house was ½ the size for twice the money from what we left. Groceries cost more, gas cost more, clothing cost more. We were uncomfortable in the beginning, but it was worth it to be closer to relatives. However, we soon adjusted to our new finances. We were still able to grow the college and retirement funds and pay off our house early.

Now we're sitting in a pretty good spot. We have enough money coming in and good benefits to go with that. (However in this expensive area, we're below the median income). Our kids are almost educated (one down, and one almost down) with no student debt. We are in our fifties and thinking seriously about early retirement. We don't have enough money that we can abandon our frugal ways, but we do have enough money to not fret. Life is good. We know that we have been lucky with only minor set backs along the way (especially compared to our grandparents), but Ward often reminds me that we have also been smart with the way we've lived. And that slow and steady wins the race.

All of grandparents are gone now, but I think they were happy that the cycle of poverty was broken, and I know our parents are happy that we learned from their lessons.