Our parents, friends, and our early experiences are our first teachers on how we handle money, and what we learned during childhood tends to stick to us as we grow up. That doesn’t mean that we can’t change for the better though. I was lucky enough to learn some excellent financial success and frugal living tips when I was a kid, and I’ll share my top 10 tips with you here.
10 Frugal Living Tips I Learned While Growing Up
Live Within Your Means
I’ve known a lot of friends and relatives who love buying expensive brand-name and luxury goods. Unfortunately though, most of them are lower-middle class like us and overextending their budget gave them a LOT of financial problems (which they happily complain about whenever they visit). They became living examples of what to avoid. On the other hand, my parents were great examples of what living within your budget looked like.
Avoid Toxic People
Remember those family friends and relatives who love getting into financial problems of their own making? Guess who they approach first when they need a bailout. That’s right, MY family. We’re not rich, but since my parents were good at handling money they usually had some extra cash saved up… which are then promptly “borrowed” by other people (and never returned). They’re a big reason why our family had a difficult time moving up in life. Beware of financial abusers. Every time you try to earn a bit of success, they’ll drop by to take it. Don’t let them. Block them out for the sake of your family’s future.
Avoid Lending Money to Those Who Don’t Repay Debts
I’ve written about this before on my previous article, “Why You should Stop Lending Money.” I’ve seen my mom get fooled time and again by people who “need” money (i.e. relatives who spent it all on luxuries like a bigger TV set), and I’ve vowed to never make the same mistake. I learned to never lend money to those who do not need it. The banks are always open for loans anyway. It’s alright to help people when it’s needed, but it’s NOT alright to enable abusers and their bad habits.
“One of the greatest disservices you can do a man is to lend him money that he can’t pay back.” – Jesse H. Jones
I can’t remember a time when my parents would borrow money to buy pointless luxuries. Even when they do get into financial straits, my mother would pawn her jewelry to get some emergency cash (and when she earned enough she’d retrieve the jewelry she pawned). That is FAR different than what some of my relatives and family friends did which was to borrow money (and “forget” to pay people back) when they get into any financial inconvenience.
When my father died, my mother started a military supply business to send my brother and I to school. She mostly sold shirts, hammocks, ammo belts, and other gear that she and her few employees crafted in the garage. One person she sometimes told me about is the old Chinese lady who would lend her money whenever she needed it, no questions asked and no collateral needed. Why? Because my mother ALWAYS paid her debts on time, and she repays completely.
One of the greatest life lessons my mother kept teaching me is that you must ALWAYS be honest, and ALWAYS stick to your commitments. Do that and you’ll never run out of people willing to help you. Don’t do what certain abusive relatives and friends do, which is scam people with sob stories every month in order to get some extra cash. Once you become known as an abuser, your world and your opportunities in life will all shrink.
Avoid the temptation to Look Rich
While our family wasn’t rich, my brother and I were both scholars. That allowed us to study at the best (and most expensive) schools in the country. My classmates were the children of top government officials, multimillionaires, and more, and they ALWAYS had stuff that I could only dream of having. Naturally, I also wanted the stuff that they had, but our family simply couldn’t afford any of it.
When the cool kids started getting their own cellphones and I wanted one as well, I had a gigantic revelation: Even if I sell my kidney, that would get me just one cool toy. They’ll ALWAYS be able to buy the next great thing again and again while my resources (and organs) were VERY limited. It’s not worth it. That’s when I TRULY learned that it’s useless to try and keep up with the rich kids. After all, they didn’t care if I don’t have the same stuff that they do and we were all still friends anyway.
“A rich man is nothing but a poor man with money.” – W. C. Fields
The “Bad Rich People” Stereotype is a Myth (that keeps you UNSUCCESSFUL)
By my estimate, about 90% of Filipino TV dramas feature “poor protagonists” and “evil/abusive rich antagonists”. As a scholar who went to school with and met with some of the richest people in the country, I learned first hand that the “rich people are evil” idea is simply not true. In fact, they were generally the nicest people around. Sure, they may be bad rich people out there, but we must never forget that there are bad poor people too (e.g. thieves, robbers, murderers, etc.).
This is one lesson that’s confirmed by Russell H. Conwell in Acres of Diamonds:
“The men who get rich may be the most honest men you find in the community. ‘Oh,’ but says some young man here to-night, ‘I have been told all my life that if a person has money he is very dishonest and dishonorable and mean and contemptible.’
My friend, that is the reason why you have none, because you have that idea of people. The foundation of your faith is altogether false. Let me say here clearly, and say it briefly, though subject to discussion which I have not time for here, ninety-eight out of one hundred of the rich men of America are honest. That is why they are rich. That is why they carry on great enterprises and find plenty of people to work with them. It is because they are honest men.
Says another young man, ‘I hear sometimes of men that get millions of dollars dishonestly.’ Yes, of course you do, and so do I. But they are so rare a thing in fact that the newspapers talk about them all the time as a matter of news until you get the idea that all the other rich men got rich dishonestly.
It is an awful mistake of these pious people to think you must be awfully poor in order to be pious.”
The “all rich people are evil” is just a myth, and it’s a myth that’ll keep you poor and unsuccessful if you believe it. After all, you wouldn’t want to be what you hate. If you think all “rich people” are evil, will you ever become rich and successful? No, you won’t. EVER. Keep that lesson in mind.
What are rich kids? Rich people? They’re just people like you and me, except they worked hard to create and expand businesses (the things you need and use, the place where you work, etc), practice law or medicine, or they did something else that pays well.
“If you would know what the Lord God thinks of money, you have only to look at those to whom he gives it.” – Maurice Baring
A part of handling money well is in using it to buy quality gear at reasonable prices. While some of my relatives bought new shoes, bags, clothes and other expensive stuff every few months, my parents rarely ever bought new stuff unless it was necessary. When they DID buy things however, they made sure that it’s at the best quality and at reasonable prices. After all, repeatedly buying cheap shoes that break down within a month is MUCH more expensive than buying expensive yet high quality shoes that lasts several years.
Prepare and Save for Big Expenses
I remember my mom saving up money during summer vacation to prepare for the upcoming school year’s tuition fees. It doesn’t seem like much, but that’s a major lesson by itself: she PREPARES for big expenses. By a sharp contrast, I sometimes overhear her talking about relatives who DIDN’T prepare for their children’s tuition expenses (they got a nice brand new TV that time though), and were looking to borrow some money from her. Those relatives earn far more money than what our family does so they SHOULD have been more than capable of paying for their own children’s tuition fees. Just goes to show you that what you earn won’t really matter if you don’t know how to use it properly.
Poverty is Never Permanent
This is one of the most valuable lessons I’ve learned from my parents. You see, my mother used to be VERY poor like most of the people in her province. What’s different with her is that she didn’t want to STAY poor and she didn’t want her children to suffer in poverty like she did. That’s why she did her best in school (she almost didn’t get to go to school) and why she worked hard after graduating college. She wasn’t the only one who escaped poverty as several of her old classmates were able to do it too. Many of her friends graduated to become engineers, managers, business owners, and more.
This is the lesson I want to teach people the most: poverty is just temporary suffering. The only way for poverty to become permanent is if you do nothing to change it. This is the reason why I’m sharing self-development, personal finance, and other lessons that can help people succeed in life. If an idea can help people become successful, then it needs to be taught to everyone.
“Empty pockets never held anyone back. Only empty heads and empty hearts can do that.” – Norman Vincent Peale