Have you ever received advice from parents – or especially grandparents – that seemed hopelessly outdated? If so, if you’re like many of us, you’ve probably questioned their suggestions on many topics. This might include their advice on personal finance?
I came across an article from The Street that lists some of the knowledge that grandparents may have about money that we might not. For me, this actually resonated because of my parents, not grandparents. In either case, these represent things that many of us might have heard at one time or another by an older generation.
When younger, I didn’t necessarily get all these tips. But now I get it. Experience has a way of getting things straight 🙂
Here’s the list of 10 ideas (reordered) with my comments after each.
- Frugality is Not a Bad Word. I totally agree with this. As long as one is living sensibly, and not taking advantage of others or mistreating them, I see nothing wrong in having a money-saving mindset. I remember being younger and told by friends that women don’t like guys that like to save money. Whether true or not, I would have let that influence me. As an adult, I realize that being frugal – as advised by elders – is actually a good thing that will help in the long run (even though some dates might not have liked it!).
- Use What You Have. I pretty much agree. Sometimes, it’s not worth holding on to old things if they don’t work well. However, sometimes working good enough is just that – good enough. When we spend money on an item, unless there is salvage value, it’s often a good idea to keep it and find some use for it. Replacing things to get the newest, brightest, best items may be fun but it can drain resources.
- Doing It Yourself Is the Way to Go. In this case, I partially agree. Sometimes it truly is worth it; in other cases, it’s not. If you have the skills to fix something, do it – unless it’s not worth your time. For example, working 10 hours to fix something that someone could take care of for $50 isn’t always smart, unless you make $5.00 per hour. Time has value. Plus, sometimes if we try to be a jack-of-all-trades, we do many things ok but nothing really well. There’s something to be said about a pro getting it done.
- Things Have More Than One Use. Agreed here as well, to a point. The t-shirt example is good, where one can take a battered old t-shirt and use it as a cloth for cleaning. When people reuse food containers, as a different example, care must be taken to be hygienic. Being frugal can be hazardous if gone too far.
- Debt is to be Avoided. I generally agree with this, though a reasonable mortgage is typical for many people in our society, and people do need the most basic transportation as well. Personally, I don’t like debt or financial obligations, but realize that of course shelter is a basic need and not everyone is in a position to comfortably have roommates, live with family, etc. To the people that proudly proclaim that debt is a tool that can be used for your benefit, I think it’s possible but it’s the exception rather than the rule – unless you’re the banker! As a rule, I would say avoid debt.
- Save for Rainy Days. Couldn’t agree more. You never know what can happen. Best to be prepared, and plan accordingly.
- Used Can Be Just as Good as New. I bought a nice business shirt from Nordstrom back in 1999 that I busted out the other day. Yep, it’s 12 years old. Somebody commented that it was a nice shirt. I said thanks, and then casually mentioned that I’ve had the shirt for a while. The person said it looked great. It was not cheap to begin with, but often paying for quality up front can result in “used” being as good as cheaper “new”.
- Functional Trumps Fashion. Well, sometimes. If many people wore jeans and t-shirts into the office, it wouldn’t go over so well. Sometimes you have to dress the part. However, as long as it’s open in terms of what you’re wearing – such as in your own personal time – why spend boatloads on expensive fashion? Some might totally disagree with me here.
- Bargains Are to Be Sought After. Yes, definitely. However, the bargains must be worth seeking. By this I mean its penny wise and pound foolish to spend 1 hour trying to save $2. Also, buying things you don’t truly need just because they’re bargains doesn’t make sense either. As long as you need something, and it’s not costing you extra time and money to make a purchase, bargains can be totally worth it and great to seek out!
- Homemade Cookies are Delicious. Hmmm…that’s an interesting choice they made to include this, but my take is that 1) homemade food is cheaper and often healthier than food from outside, and 2) they’re right about cookies made at home being tasty.
I’m pretty well aligned with all your comments. Sometimes outsourcing activities which you *might* be able to do yourself makes total sense. Time is valuable, and could be put to more profitable use.
101 Centavos – yes, it does make sense to consider time in the equation in terms of getting things done from others vs. on you own. There’s a lot of pride out there that folks have when it comes to getting things done on your own. While I can get part of that, it’s foolish sometimes when considering how limited our time is.
Good wisdom never goes out of fashion!
Moneycone – good wisdom can sometimes get ignored as being old fashion 🙂
I am fortunate to have parents who are wise with money and I learned a lot from them. In addition to the things above, they taught me a lot about investing and I am eternally grateful.
Bret – I too have been fortunate to have parents who have had some good sense when it comes to money. It’s not just grandparents, as parents are really the primary role models in this case. Grandparents, being 2 generations removed, sometimes offer advice that’s especially old fashioned. However, it’s often valuable wisdom that shouldn’t be dismissed. Like you, in terms of parents, I’m eternally grateful.
I think old people are awesome. I don’t know why more young people don’t listen to what they have to say.
First Gen – yes, it’s interesting how people in our society just dismiss old people. In other cultures, they’re treated with more respect and valued for their contributions and experienced.
As I read your post, I automatically gave a “old person” voice when I read the bold statement. Crazy? Those statements are still meaningful, but need to be updated for now. You did a great job of that. My parents avoided debt, but they had a house built in 1929 and carried a huge mortgage payment of $85 per month. In those days the average weekly pay was something like $20. They did start businesses without debt, one in particular in 1929. It flourished for 27 years.
krantcents – interesting how that mortgage you refer to that was roughly equivalent to the average monthly pay at that time – yet still avoiding other debt. Starting a business without debt and keeping it going for 27 years is impressive – especially since those days were quite different from today, where one can start a business for next to nothing.
I was lucky to have all my grandparents alive while growing up. The saw spending in very different ways. One pair was alway frugal and saved and invested their extra money. They were teachers and never had much but in the end had saved a small fortune to pass on to their kids. The other pair were big spenders. They made a good living (banker and business owner) and ended up in bankruptcy at the end of their lives. There are lessons from both I carry with me today.
Molly – you know, that’s a great way to look at it. Even though the other set of your grandparents encountered financial problems at the end, which is unfortunate, it’s good that something good was taken from the situation in the form of your learning from it.
I agree with all of these.
One of my favorite things to do is thrift store shopping! It’s amazing what you can find, and I also donate to these shops as well.
Amanda – it’s amazing what deals one can find when shopping the right places, I agree with that concept
Good post, Squirrelers! Much of the old wisdom still rings true, even today. A lot of economic activity is simply building useless pyramids at the altar of GDP growth, and frugality is a check against that. Frugality leads to healthy & sustainable economic growth that’s based on what people truly want and need, all while building savings for future investment and paying down debt.
Invest It Wisely – yes, much old wisdom still holds. This is why the original article jump out at me as being pretty interesting, even if I partially agreed with some of their points.
To be included in our weekend reading tmrw. Excellent post.