Our family is growing and we thought it’s time to streamline our finances. We want to buy a decent family home, maintain a consistent budget for childcare and there are other additional expenses.
When it comes to finances, my parent’s efforts are inspirational. It surprises me how they have risen from a humble origin and achieved a decent financial status.
They were not genius or had a stroke of luck. The credit goes to their consistent efforts towards a single goal – to get rid of poverty for once and all. Not only they achieved their life goal with flying colours but also helping other to do the same in their local community.
Here I have compiled a list of their actions that helped them achieve financial freedom and a better life.
- A regular source of income: My parents diligently worked as school teachers all their adult life. Salary was less, but passion for education kept them content. Other than maternity/paternity leave and paid holidays, they never stopped showing up at work.
- Have an additional income: Other than his day job my father worked as a tutor during after hours. Although my mother never did additional work permanently, she never missed an opportunity to make some extra money at her day job. Also, she saved at home on a more regular basis. How? Keep reading.
- Save money religiously: They used to save some percentage of their salary every month. A fixed percentage of their salary was directed in four different accounts. Every account had a purpose: Savings, household expenses, education and development, and emergency funds.
- Plan your retirement: Most of the countries has some sort of pension policy. Government wants you to save for later life. if you are an employee, usually, you will get tax rebate on your savings and employers will contribute to your retirement fund (on the top of your salary). My parents used the maximum benefit of the government’s retirement schemes. And that’s not all. After buying their house, they invested in commercial properties. So that if “plan A” goes wrong, they will still have roof on their head and food on the table.
- Acquire financial knowledge: Back then the internet was neither cheap nor easily available for the common people. So they had to gain knowledge from books or speaking with experts in the field. To date, my dad has up to date knowledge of the best savings accounts, investment instruments, interest rates, fees etc. Knowledge is the power and he gained this power to make his dreams come true.
- Don’t pay heavy interest: My parents were convinced that paying interests was one of the worst ways of losing your hard-earned money. They never used a credit card. They bought everything in cash. Whenever they took a lone, they paid it off as soon as possible.
- Choose suburban life: My parents never lived in cities or apartments. They choose to live in small-towns. The salary was less but the cost of living was lesser. Moreover, they loved slow-paced lifestyle.
- No processed food: My parents never bought processed or canned food. They stick to basics. They bought whole oats, wheat, barley, millets etc. They had a small kitchen top mill at home to grind cereals. Same with beans, they always soaked and boiled their beans.
- Buy staples in bulk: my parents used to buy grains and beans in bulk directly from the local farmers. Just because it was cheaper and organic. Being friends with local farmers had added benefits. Sometime they would sell us seasonal fresh fruits and vegetables at a reasonable price.
- Make it at home: My mom used to buy fresh milk from local milkman and make yogurt, cheese, butter, ice-creams at home. It’s not that difficult, I make yogurt and cheese as well.
- Make in bulk: My mum made all sorts of things at home. Including pickle, sauce and condiments. When tomatoes were in season my mom use to make ketchup in bulk. When potatoes were in season, she used to make dry potato chips. That you fry before eating. She used to pickle vegetables in the season.
- Build meaningful relationships: when my mom made pickles or sauce or other condiments in bulk, it used to feel like a party in the house. She would invite her friends over. Kids will play together in the garden, parents would chat and laugh and make wonderful food over a cup of tea. In the evening enjoy the deliciousness of collaborative efforts before calling it a day. After a few weeks, the same party will be at some other place. I miss that happy environment and a strong sense of community.
- Keep your meals healthy and simple: my mom’s philosophy was the deliciousness of a meal can be subjective but not the nutritional value of the meal. Keep it simple and nutritious. Complicated recipes takes up lots time. And time is money. Use it wisely. She was never a big fan of spicy and fried food. Exotic spices are expensive. She would prefer steamed, stewed and grilled food made with fresh herbs from her kitchen garden. That leads to my next point.
- The kitchen garden makes a huge difference: It doesn’t have to be a massive one. Grow a few perennial herbs (they live longer) in a container and place them on windowsill. You can also try hydroponic method (growing herbs in water), it is easy and mess free. If you have a small patch, grow some easy to grow vegetables in your area. My mum used to grow seasonal vegetables and herbs in her tiny patch. Just a few plants were enough for her small family. Mostly, every part of the plant was consumed. For example, carrot greens were used in curry and stews and carrots were consumed as a salad. Food waste will go in the compost bin and that will be used for next seasons garden, for a better harvest.
- Best out of waste: My parents are environmentalist. They buy less stuff. And once bought something, they use it thoroughly. Everything gets repurposed or recycled. Old utensils will go to the utensils shop and exchanged with new items or cash. It’s easy to recycle iron, copper, brass and stainless steel pots. Old and tacky clothes were cleaned and used for making rags and bathmats.
- Save electricity: Dry clothes on cloth lines. Open the windows and use fresh air to cool the house. Natural light is best to lit up the room. Turn off switches before leaving the room. And the list keep going on and on. The idea is to keep an eye on your electricity uses.
- Prefer quality over quantity: There is difference between choosing frugal lifestyle and being stingy. Do invest on things that makes your life better. Also, never hesitate to spend a bit extra for good quality products. As it pays off in long run. My parents preferred timeless classic designs and styles as they never go out of fashion.
- Too much stuff is too much work: If you have too many clothes or decorative items for your house. They will create more clutter. You will have to spend more time on their upkeep. Which means less time for productive tasks – like making or saving money.
- Walk or cycle to work/shopping: My parents had a cycle and a scooter. And they both learned to ride. Scooter and public transport were used to travel long distances. Otherwise, they walked everywhere. For work, to buy grocery, to meet friends. It’s good for health and better on the pocket.
- Choose your entertainment wisely: According to my parents cinema, video games, clubs are wastage of time, money and health. They prefer picnic with family and friends, walk in the nature, day trip to a historical sites or invite a colleague over a tea to know each other better. A sports club is a much better place to make friends then after work drinks at a pub, where you can hardly hear each other.
- Respect each other and stick together: my parents met each other in their early 20s. Since then they are living together (almost 47 years as of 2021) and worked together as a team. It would have been impossible without love and respect for each other.
- Be Consistent: They planned their finances and improvised it regularly. Their plan might not be perfect but they were consistent. And that’s what made all the difference.
My parents truly believed that every penny saved is a penny earned. And it served them well.
Thoughtful and informed financial decisions were crucial to put them on their path to success. However, consistency and compounding did the actual magic.
Start early, save everywhere, and be consistent.
I wish you a prosperous future.
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