Things My Father Taught Me
by Gary Foreman
Some of the fondest moments memories in my life are of helping my Dad around the house and listening to him explain why he did and didn't do things. Although I didn't know it at the time, he was building a foundation for a frugal lifestyle. We talked about how to fix things. How and when to buy. When not to buy. Now I'm older and he's gone. But I think it's important to share the same types of things with my kids. Most of them aren't earthshaking. Some are old-fashioned. But taken together, they make the difference between controlling your finances or having your finances control you.
Wait before you buy. If you're like me, every once in awhile, 'buying fever' strikes. Whether it's a book, a CD player or a new PC, the urge to BUY NOW is almost overwhelming. Sometimes I'm amazed at how much I want this thing. When I was a boy Dad would make me wait a few days before buying that new baseball glove. I used to chafe under the restriction. But, there were times that the buying fever went down and I found that I no longer wanted to make the purchase. As I've grown older I recognize that there are a certain percentage of purchases that I won't make if I'm just willing to wait a few days. And if I buy something after waiting awhile, the joy of ownership is that much sweeter.
Shop before you buy. When you do decide that you want something take the time to shop around. Don't buy at the first store that carries the product. By shopping around you'll make sure you get the best price, best service and best warranty. You'll avoid the mental anguish of finding the item at a lower price just after purchasing it.
Consider floor models/demos/etc. While you're shopping ask the salesman about floor models, demonstrators and discontinued models. Anything that might cause an item to be sold at an unusual discount. I've seen TV's sold at significant price reductions just because they're last year's model. It made no difference in the usefulness of the TV, but the retailer wanted to clear out the old inventory.
Ask for discounts. It never hurts to ask for a discount. The worst thing that can happen is that they say no. It helps if you have a reason, but it's not necessary. Sometimes the dealer won't give a discount, but they'll throw in something to 'sweeten' the deal -- free delivery, an extra battery for a cell phone, cables for your printer. Things like free delivery don't cost the seller much, but reduce the cost you pay. You get more than they give up.
Pay cash. To my Father, paying cash was a firm rule. In fact, I had to talk him into getting his first credit card in his 60's. His reason for paying cash was simple. If you didn't have the cash to pay for something you couldn't afford it. If you follow his rule you'll never have debt problems. Yes, there are some exceptions. Today, it's very difficult to buy a first house for cash. But for everything else it can be done. Sure, they'll be some things that you don't buy. But if you can't afford to pay cash today, what makes you think that you can afford to pay the principle AND the interest tomorrow?
Don't borrow money. Regardless of what the marketers say, consumer debt is probably the worst thing that has happened to this country financially in the last 50 years. It wasn't until people started widespread buying on credit that they even tried to play 'keep up with the Jones'. That pressure to put on a prosperous front has strained many a marriage. How many people do you know who are under tremendous stress because of the money they owe? The problem isn't limited to families, either. Our Federal government is a prime example of the tyranny of debt. If we didn't have to pay the interest on the Federal debt, the annual budget would be in balance. The taxes we pay today are enough to pay for today's services. But they're not enough to pay for today's needs and yesterday's overindulgence.
Save 10% of what you make. Even as a boy, I was expected to save part of my allowance and then later my earnings. In those days you 'saved something for a rainy day'. The funny thing was that I didn't realize that I was developing a lifelong habit. By only spending 90% of the money that was available I was always living a little bit below my means. Your wants (if you're in control of the situation) are based on how much money you have available. As your income increases you'll still feel more prosperous, just at a slightly lower level. The result is that you'll never be stretching the envelope of your budget.
Do you own something already that can do the job? Before you go buy something new, is there something that you already own that can accomplish the task? Recovering an old chair could be a far better option than buying a new one. If you can do the job yourself it's particularly frugal.
Perform routine maintenance. Neglecting your possessions is a sure way to see that they deteriorate before their time. If you mistreat your car you'll cut it's life in half. It's true of most everything you own from your carpet to your roof. In fact, the time that's needed to care for your possessions is a good reason not to buy too many things. The more you own, the more you need to care for.
Learn to do basic repairs. Most basic repairs can be done successfully by an informed homeowner. When I was a boy Dad had me hand him tools as he performed these tasks. Although I didn't know it at the time I benefited more than he. Even though my young mind wandered and often he would remind me to aim the light where he was working, I was learning by watching. Over the course of my boyhood I would 'help' him with most of the common projects that the typical family faces. When I had a home of my own those lessons were enough to get me started on my own repairs.
My children are still small. But when I'm working around the house I encourage them to 'help Dad'. Sure there are times that it would be faster to just reach for the screwdriver. But we're spending time together and they're learning. Someday I'm sure that these little lessons will pay dividends when they're on their own.
Gary Foreman is a former financial planner and purchasing manager who founded The Dollar Stretcher.com website and newsletters in 1996. He's been featured in MSN Money, Yahoo Finance, Fox Business, The Nightly Business Report, US News Money and he's a regular contributor to CreditCards.com. You can follow Gary on Twitter or visit Gary Foreman on Google+. Gary is also available for audio, video or print interviews. For more info see his media page.
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