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- I come from a long line of blue collar workers, including my great-grandfather. He always had good financial advice.
- He told my grandparents to save a small amount from every paycheck no matter what.
- This helped them save enough for a down payment. And that still makes a difference to me today.
Coming from a long line of blue-collar and self-employed people, I’m no stranger to the challenges of saving money.
The biggest misconception about “savings” is that you have to start big. When someone mentions they have savings, many of us automatically think they have hundreds, thousands, or even hundreds of thousands of dollars stored away for a rainy day.
For many of us, having that amount in a safety net in the bank seems totally unfeasible. And when something seems unachievable, it stops you from even trying.
But that’s the problem of savings. They are not designed to start big. Saving is an ongoing action, something you should always be working on.
My great-grandfather preached this lesson until the day he died. He was always full of useful information, and his financial acumen was no different.
My great-grandfather’s advice was to start small and be consistent
When my grandmother and grandfather wanted to build a house, my great-grandfather told them to take a small amount from each paycheck – no less than $5 but no more than $20 – and put it in an envelope and set it aside. Forget that. But keep putting that money aside.
My grandmother thought he was crazy, but she trusted him. Before she knew it, she and my grandfather had enough for a down payment to start building their house (of course, that was a long time ago – my grandfather was only bringing in $60 a week!).
But that advice still holds true today. My aunt and I use it.
For her, she knows how much she needs for a vacation each year. So, she sets aside $20 from each paycheck. Even the weeks when it seems harder than it should, she puts it in that envelope.
When the holidays arrive, she has plenty to enjoy.
For me and my husband, we use my great-grandfather’s savings strategy to establish a base amount for Christmas gifts. Naturally, there are years when we exceed the amount we have set aside, but get to that much in no time during the holiday season – forget it.
Having a little bit set aside on every paycheck throughout the year, the one we know is here and will give the kids a good Christmas morning – it makes you feel better. This saves you from stressing and sweating when you flip the calendar in December.
He also taught us the true value of loose change
Sometimes those small amounts are what matter most. Any amount you may have set aside, even something as small as a tank of gas or filling the grocery budget on a really tough week, can make a world of difference.
I’m speaking from experience here — my husband and I are self-employed. During the COVID shutdown, money was tight (to put it mildly) – we used every economics lesson we could think of. Especially the next one.
I have to reference my great-grandfather again for this lesson with his ingenious financial advice: Money is the only thing you can spend twice.
Again, he was about as right as you can be.
Although we don’t have the common “coffee box” in our house, we keep all of our spare change (we also keep the quarters separate – they’re great in a pinch for items that cost $1 or $2) .
When we’re a bit short on time or need a little extra padding for a week’s groceries, it can be extremely helpful to pull out the spare change and go cash it.
These lessons may not be for everyone, but they’re helpful and useful if you don’t have much to do between paychecks, when a little can help.