Friday, April 2, 2010

10 Things That Granddad Taught Me About Money (That I Should Have Paid Attention To)

My granddad was a great guy. He always seemed to know a lot about a lot of things. He was a welder by trade but also a horse trainer, a farmer, a show promoter (everything from music concerts to rodeos and fairs), he ran a dance hall in the 40s, and he did any other job that he could pick up to make some money for the family (he lived through the Great Depression which probably shaped his outlook on money for the rest of his life).
He taught us plenty as we grew up but perhaps his most important lessons were about money (unfortunately we--his grandkids--grew up during the 70s and though we knew everything and were financial train wrecks...we should have paid attention to granddad). Here are his top ten lessons about money:
  1. Pay cash for everything. Period. Of course this was before credit cards were readily available but he never took out bank credit for anything. If he wanted a truck or a house or a piece of land, he saved up for it and paid cash.
  2. Save some money out of everything you earn. He never got a paycheck and went out spending like a wild man. In fact, he didn't spend much at all but that is another lesson. He always had a wallet full of cash and cash in a savings account at the bank (he opened savings accounts for us before we could even understand what a bank was).
  3. Be frugal. He taught us this in a number of ways. Each Sunday he would take all of the grandkids to the grocery store, each with their own batch of coupons in hand, to do the grocery shopping. I think he was the original Coupon Queen, er, King. If something worked he never replaced it (which explains why their refrigerator dated from the mid 1940s--and grandma used this fridge into the 1990s--and their black and white TV was used until it died in the 1980s).
  4. Don't talk about your money. I'm not sure about the origin of this but he never talked about money to anyone. He kept his finances to himself, would never dream of giving out his Social Security number, and would be the last one to show off as a "big spender".
  5. Want less. He never had lots of material possessions other than the random stuff that is required on a farm. He wouldn't run out and buy the latest appliances, the newest TVs, or any other material goods unless they were necessary. He was supremely content with his home, his land, and his family.
  6. If you do buy something, buy it used. Other than going to the store to buy food, I can't ever remember him going to the store to buy new things. He would trade, he would barter, and he would buy used, but he would never buy new. All of his trucks were second hand, his firearms were bought from people who were selling them instead of stores, and even his fishing gear was a hodgepodge of stuff found everywhere but at a store.
  7. If you do buy something, buy an asset that will hold its value. He would buy/trade for guitars, knives, firearms, tractors, etc. but he would never buy junk stuff that many people would purchase for $10 then sell at the next yard sale for $1.
  8. Have a skill. His theory was that if you were good at a skill (welding, plumbing, construction, etc) you would never go hungry because there would always be people who would need what you could do as opposed to just being a paper pusher who would be expendable.
  9. Treat people right. While granddad was tight with is money, he did treat people right. He would take grandma out on a very rare occasion for a hamburger and milkshake. He would see a family in need come to his farm to purchase fruit or vegetables and either give them stuff for free or toss in a few extra pounds at no charge. As a result of this, he had many friends.
  10. You can still have vices. Granddad wasn't a saint. He smoked like most men of his generation, he had a fifth of Jack Daniels under the seat of his truck (this was before DUIs were considered a bad thing), and he had a giant Hershey chocolate bar in the cupboard that he would eat one square at a time.

I think a lot of us could learn much about money from old timers if we only listened to them. Yes, there are many more options these days than there used to be--DRIPs, ARMs, Roth IRAs, etc--but common sense never goes out of style (although we seemed to have completely forgot this in the 90s). Living beyond your means, investing in things that don't make financial sense, and taking out loans from Payday Lenders are not things that made sense decades ago and they don't make sense today.

1 comment:

  1. karen peissinger-venhausApril 15, 2010 at 7:40 AM

    Back in NY state, I knew a young woman whose European-immigrant father paid to send her and her brother to college, but also insisted that each learn a trade, which he paid for also. (She chose glass-blowing, which I thought was a really cool skill to have.) Like your granddad, the father said they would never go hungry with an education and a skill.