Be smart with your money!

I could say that when I was a kid, we were so poor that…

But, when it comes right down to the nitty gritty, I never felt poor. Neither did my siblings, at least not until we went out to earn or own incomes, whether part time or in real employment. It was only when we actually had cash in our grubby little hands that we began to realise that we had had so little to work with.

It’s so easy to feel that one is broke, that one has so little in the way of wealth. Even millionaires that I’ve met over the years have complained about how they feel poor at various times. They have to think about all that they’ve got, or the huge incomes they are getting, and compare it to someone who has a lot less, whether it’s in wealth or income. In some ways, it hits those rich people far harder than people like my parents and my siblings.

The first thing about being smart with your money is simple: live within the income you’ve got!

It suggests that the question you should ask before buying anything is “Can I afford to (buy this)?”.

If you have enough of an income (or enough wealth that can convert to cash), then great! You won’t go too far wrong. But what happens when you DON’T have enough cash or enough cash available to you?

Funnily enough, even millionaires find there are times when they can’t afford things; for practical purposes, they are as broke as my family used to be. In case you are wondering, yes, I’ve met millionaires in exactly that kind of state. But it’s more common among the middle income people, those who have very good salaries, and seem to be able to get just about everything they want, at least within a short time frame of when they want to buy whatever it is.

Take a look around you, and you’ll find that this is a very common problem.

It leads to what could be called “mental or emotional poverty, a poverty consciousness that affects the rest of their lives. If you live by “Can I afford to..?” you are always in danger of falling into the poverty consciousness.

Poverty, by the way, is a matter of definition: you are in poverty if your income falls below roughly ⅔ of the median societal income. In some countries, it’s ⅔ of the AVERAGE income. In other words, the way people see poverty is by some statistical definition, rather than the availability of cash, income or wealth.

So, how did we get by, with our more or less real poverty?

My parents lived with a very simple rule. Rather than asking whether we could afford to buy something we kids asked for, or that they wanted to buy, they asked: “Can we afford NOT to buy…?”

If the answer was “Yes, we can afford NOT to buy!”, the item or whatever was ignored. No excuses, no arguments, no debates.

When the answer was “No, we can’t afford not to buy…!” we would take a very close look at how much we could afford to spend. Not just looking at the money, but looking at why we could not afford not to buy it.

Then we would consider the alternatives, the substitutes that could give us the advantages of having whatever it was. Sometimes, it meant that Dad would work overtime, if it was available. Or maybe Mum would take on an extra job — she was an excellent seamstress, and often finished off clothes for a manufacturer or a store that did alterations on clothing (male or female). Or we’d head off to the Barrows, and find something second-hand that did the same job — Mum or Dad could fix it so it looked perfectly new. Or we kids (if it was to meet our needs) would go out and do chores — babysitting, delivery groceries, selling lemonade or whatever, or a hundred other small things that people were willing to pay for. We’d find either the price being asked for the bargains or find a substitute.

Sure, it meant that we didn’t have the brand name goods. But what we did have worked every bit as well as the “real” stuff.

The thing is, we never felt deprived of the things that were essential. We had everything we ever needed, even if we had to make it ourselves….

Try it…

It will work as well for you!

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