Lesson 3 from the Finance World
Penny Pinching will only take you so far
My parents taught me one main strategy of financial independence: penny pinching. My mother survived the Depression on a farm in Idaho. She was extremely poor and spoke very fondly of war rations in the 1940s because then at least she got some sugar in the jello, and that was reliable calories, which she didn’t have much of in her growing up years. This trauma meant that she had certain lifelong habits of cheapness.
Yes, she was one of those people who had several balls of saved aluminum foil. And a rubber band ball. She used fold-over sandwich bags, but often re-used them. She re-used bread bags and grocery bags, not because she was trying to save the planet but because she wanted to save money. She canned her own food, but not with much precision, which means that we often got sick on her preserves. Also, she served us expired food without batting an eye, and she taught me to have a certain cavalier attitude toward expiration dates that my children find appalling.
She would complain about any food that we liked so much that we ate it as soon as she brought it home from the grocery store. When I was a kid, I learned to go grocery shopping with her because she often had to push two carts full of food to get a week’s worth of groceries for eleven children, and if I helped, sometimes I could ask her to buy me something I liked that she might not have thought of without me there. Or not to buy something I didn’t like, such as Salvesen’s ice cream.
As her children became adults, she would often try to get us to take leftovers in the fridge, which I eventually learned was her plea for help to get someone else to throw it away because she couldn’t do it herself.
I learned many useful things from my mother. I can open a refrigerator and see what’s inside and with a few pantry staples, think of two or three things I can make for dinner in less than an hour. I know how to build a pantry and I know how to cook and bake simply. I am not a great cook and no one would hire me in a restaurant. But I don’t dislike cooking and it’s easy in my mind and not particularly taxing mentally. This saves a huge amount of money because I rarely have the reflex to order takeout either delivered or not. My own food is usually healthier, definitely cheaper, and frankly more convenient than takeout. I do love going out to eat with a group, but that is at least partly because then I don’t have to plan, prepare, or clean up and it’s in a neutral space everyone can agree on.
I also learned from my parents to drive a car into the ground. I do not purchase new cars. I purchase cars that are used (often over 100,000 miles) and then drive them the last 100,000 miles or however long they keep going. My dad had a thing about refusing to have his cars serviced at a shop. You could tell by looking under the hood. He gave me one of his used cars as a wedding present and I had the unique experience of having it towed to a shop which refused to accept it because under the hood it looked so disastrously badly kept.
Saving money on cars and food are really useful. My parents didn’t take vacations often, either, and they taught us how to stay at cheap places and bring a food hamper. This may or may not be a good thing about my growing up because I still struggle to stay at even a basically nice hotel. It even makes me feel uncomfortable and I hate Hate HATE having people come into my room to clean it while I am gone. Also quiet hotels feel weird to me and I find them difficult to sleep in. Yes, I am in therapy about this.
I have other habits that are similar to my parents’, although they didn’t teach them to me. I have a simple rule that I do not buy anything online unless I put it in a basket and think about it at a minimum of overnight. I try to give myself a week or two to reconsider if I want it or not. I think this is useful. But again, the usefulness is only to a degree.
What my parents didn’t teach me is that penny pinching only goes so far. I suspect they didn’t teach me this for the simple reason that they did not know and possibly would not believe that this was a limited strategy for financial success. My father likely never negotiated a salary in his life, rarely considered moving up in the world, and even when he did make an occasional windfall in expert court testimony, tended toward trying to get rid of the money in the fastest way possible—usually by giving it away in the worst way you might imagine. It sometimes makes me sick to think of what he might have used that money for and how he could have built a nest egg to pass to his children—or just to his wife after he was gone.
But if you’d ever asked him, he’d have said out loud that what he wanted to do, his life plan, was to die without a cent to his name and with nothing his children could argue over. This came from his own life experience when his mother died, and his arguments with his siblings. This trauma became a bizarre quest of his and he congratulated himself regularly that he had nothing that anyone would want. I think he actually believed this protected him from thieves. Who knows? Maybe it did. I’m not sure that I would choose the house with that ancient bronze van parked in front to break into.
Investing and earning more money are both important legs to the financial stool (as well as learning to manage your money and to not chase after everything that capitalism tells you that you should want). I am glad that my parents taught me at least something good. It wasn’t the worst legacy to leave to a second generation, but I’m trying to do something more for my kids.