My Grandmother’s Advice That’s Still Relevant Today

My grandmother never had a lot of money, but she always managed to have enough to put food on the table and to pay every bill on time.

Here are a few of the things I learnt from her. Not all of them have to do with money, but they’re all drawn from an everyday life of hard work, thrift and “keeping the wolf from the door”!

Save for a “rainy day”

Have an emergency fund. Unexpected things happen. My grandmother couldn’t go running to the bank for an emergency loan or overdraft. Always have something to “tide you over” in the food cupboard and the money pot.

“Make-do”

The most important things every month are our savings and to pay the rent or mortgage. The rest is a luxury. There’s always a new way to spend money, but the secret is in making-do with the things around us which we already have or which don’t cost much.

“Waste not, want not”

“Want” in the sense of not having something that you need. Cook at home, use left-overs, never throw food away, learn basic recipes that are cheap to prepare and filling and nutritious. Don’t throw money away on anything unnecessary.

“Look after the pennies, and the pounds will look after themselves”

It’s all those small expenditures that we might think are nothing that can really add up and make the difference between staying within budget or blowing it out of the water! “A penny saved is a penny earned.”

“Don’t go throwing your money around”

Let’s not go around thinking we’re millionaires and spending as though we were! Let’s not “live a life of luxury” that we can’t afford. Otherwise we’ll never be a millionaire!

“It’s not what you spend, it’s what you don’t spend”

Spending money doesn’t make you rich, even though it might make you feel rich… for a while. It’s all about what you don’t spend!

“While you’re earning, you’re not spending”

Keep yourself busy at work, and you’ll have less time to go out spending money on things in the shops, meals out, etc. Double positive effect on your finances. Many people with partners who don’t work don’t worry so much about the loss of income, but rather the extra expenses from them having so much free time on their hands!

“Never put things on the never-never”

In other words, don’t buy things that you can’t afford to pay for in cash. Never take credit for anything except a mortgage.

“Pay for everything in cash. It’s cheaper!”

Paying interest when you buy something makes it an expensive purchase.

“You have to earn your keep”

Nothing is for free, and free-loading is not allowed. It’s unfair on the rest.

“Everyone has to do their bit”

Everyone in the family has to do what they can, whether it’s helping around the house or bringing in a bit of extra income to put on the table every month add to the family savings account.

“There’s no such thing as a free lunch”

Don’t expect anything for free in this life. You have to work for it!

“Rome wasn’t built in a day.”

It takes patience to acquire the comforts of life. You probably won’t get rich quickly, but if you’re careful, you might just get rich slowly.

“Where there’s a will, there’s a way”

If you really want to achieve something, you’ll find a way to do it. whatever the obstacles.

“If at first you don’t succeed, try, try, try again”

Don’t give up, even if you fail a few times to start with. If you keep trying, you’ll succeed in the end.

“If a thing’s worth doing, it’s worth doing well.”

Don’t waste your time doing things “half-heartedly”.

“Don’t do things by halves.”

If you’re going to do something, give it your all! Otherwise, what’s the point!

“There’s a time and a place for everything.”

Doing the right things at the right times is crucial. This involves prioritising and focusing on one thing at a time.

“A miss is as good as a mile.”

If you narrowly fail, you’ve still failed! Make sure you succeed by working on whatever you’re doing as hard as possible. And never give up!

“Neither a borrower nor a lender be.”

This actually comes from ‘Hamlet’ which my grandmother probably never read, but this quotation was very much in use in her generation. It speaks for itself.

“Lend your money and lose the friend.”

Lending money to other people is fraught with difficulties. It’s better to help them find a job or to give them good, solid financial advice. If a loan comes too easily, your friend could well be in the same or greater difficulties later on and then you’ll never get your money back, which will sour the friendship forever.

“Don’t put all your eggs in one basket.”

Don’t bank everything on one thing! Diversify!

“Pull yourself up by your bootstraps.”

This is the old philosophy of self-help to get ahead in life. Still very valid today.

“You got yourself into it, you get yourself out of it.”

As far as I can tell, this one was my grandmother’s own invention. Don’t expect other people to bail you out of problems of your own making.

“Beware of Greeks bearing gifts.”

If someone gives you something, the chances are they want something (usually a lot more) in return. Beware! Look what happened to Troy!

“In the olden days… ”

My grandmother used to use this phrase when she was telling me how good things were now compared to when she was growing up during and after the First World War. Tough times!

“Having a whale of a time.”

For my grandmother, this meant the simple joys in life like having the family round for a few hours, playing cards or a board game, going for a walk in the park… None of these things really cost anything. No flashy cars or expensive jewelry for her! Sometimes, she would even spoil herself and buy an ice cream!

Five Common Ways People Lose Their Retirement Savings

Here are some ways you could run into retirement trouble:

1. Ignoring Your Long-Term Strategy

Have you ever taken the time to create an investment philosophy based on your goals, personality, and risk level? If you have, do you stay true to your strategy or do you let your emotions take over when the markets go wild? The reality is that markets fluctuate every day. If you try to beat the market and get swayed by the headlines, not only will you cause yourself unnecessary stress, but acting on your emotions could cause damage to your savings.

A 2015 Dalbar study shows how playing the market leads to underperformance. Buying high and selling low due to panic lowers your overall return and may jeopardize your retirement. What should you focus on instead? Maintaining a long-term perspective and a disciplined approach and refusing to ride the market roller coaster.

2. Misjudging Your Retirement Needs

You may be pretty proud of yourself for amassing a nest egg. But even if you have a million dollars saved, it may not be enough. If you plan to retire at 62, your retirement savings will need to carry you through 30 years or more. Not to mention, you will encounter additional expenses such as healthcare costs, home maintenance, and taxes. The best way to avoid financial stress in retirement is to set up contingency funds to cover the unexpected, and work with your financial advisor to map out various retirement scenarios to see what your savings can handle. Then, find ways to maximize your savings to give yourself a cushion.

3. Failing to Take Required Minimum Distributions

If you are 70½, you must begin taking required minimum distributions (RMDs) from your traditional IRA and employer-sponsored retirement accounts. It doesn’t matter if you need the money when you reach this age, you must still adhere to the RMD rules. What happens if you don’t follow through? The IRS will charge you an excess accumulation penalty of 50%! That can significantly harm your retirement savings amount. As an example, if you are required to withdraw $5,000 and don’t, you will owe a whopping $2,500. That’s an unnecessary and avoidable loss. Depending on how much you have in an emergency fund, you may even be forced to use your retirement savings to pay the penalty, further damaging your future financials.

4. Engaging In Risky Behavior

When you started saving for retirement, you were probably in a much different stage of life. As the years have gone by, have you taken the time to reevaluate what level of market risk you are comfortable with? While you can’t eliminate risk from your portfolio entirely, you can ensure that your investments are in line with your risk tolerance.

At this point in your life, you need to focus on finding balance between the appropriate mix of exposure to market volatility and the security of knowing your money will be waiting for you when you retire. This balance is unique to each individual, so don’t copy the strategy those around you have taken. If your portfolio leans too far to either side, it could mean the difference between a successful retirement and running out of money.

5. Taking Advice From The Wrong Sources

When you don’t partner with a trusted financial professional, you put your money in a dangerous spot. At this point in your life, you need to work with an advisor who will help you create a written income plan and work through various retirement scenarios, not just help your money grow.

Scrap the Paper and Go Paperless

The accumulation of documents like bank statements, bills, receipts and more can cause unnecessary stress and paying bills by check can eat up a lot of your precious time. Fortunately, it’s easy to streamline your home office by going paperless and initiate an online bill-paying system. The payoff to this modification is vast. Below are some reasons to go paperless and how to achieve this new lifestyle.

What are the benefits of a paperless lifestyle?

• Be environmentally friendly and reduce the demand for paper and other natural resources. The average American receives 41 pounds of junk mail per year. Almost 50% winds up unopened in the landfill. Fiserv, a financial services technology solutions company, estimates if every American household was paperless, it would reduce solid waste by more than 800,000 tons a year and save approximately 18.5 million trees.

• Deter theft. You don’t have to worry about sensitive information being stolen in your mailbox, home or office. Instead, your statements/invoices will be protected by a username and password and any additional security you have placed on your computer.

• Ability to access your information promptly. Digital files make it easy to audit and search information. An e-based online storage system keeps all your files in a single secure location and allows you to search for sensitive information with the click of your mouse. No more digging through paper files and folders.

• Spend less on paper checks. Paying your bills online can save you approximately $30 per year in the use of paper checks.

How to go paperless at home

Sometimes the undertaking of going paperless can be frustrating. Transitioning requires patience and commitment and your plan must be pertinent to your lifestyle. Review these strategies and choose the ones that work best for you.

• Opt out of junk mail. Reduce the amount of unnecessary mail you receive by opting out of junk mail and catalogs. There are many services that can help you manage the influx of mail.

• Sign up for E-Statements. Sign up to receive electronic bills and bank statements. You can do this on each company’s website. It may take a lot of time to set up your online accounts but you will immediately see a decrease of unwanted mail coming into your home.

• Pay your bills online. Most financial institutions offer online banking and the majority of utility, credit card and cable companies allow customers to view and pay bills online. You may even sign up for automatic bill payment plans for added convenience.

• Start purging and recycling. Once you have stopped receiving junk mail, signed up for e-statements, and your online banking, it is time to organizing your existing paperwork. As you begin this tedious task, keep in mind that it is estimated that we never look at 80% of the papers after seeing them for the first time. So, shred it or toss it. Keep in mind, papers you must keep include bills, tax records, investment information and of course any sentimental papers. This can be a long-term project so don’t get discouraged.

• Digitize your documents. Scan all the documents you need to keep and store them on an external hard drive on your computer for go “to the cloud” for extra security. This process will save space and reduce your clutter.

• Rethink your subscriptions. It might be a good time to cancel most of your subscriptions to help reduce the paper coming into the house. You might be able to get the same news online.

• Rethink your printing and use of unwarranted paper. Think twice before printing anything. Read documents on your tablet or laptop and if you need to share a document, use your email.

As I’ve said before it takes time to go paperless. But if you follow these recommendations it’s a solid plan. You will save time, money and you will reduce your environmental impact. It’s a win-win for everyone so say “Yes” to paperless.