After my parents were divorced, there was a year in which my mother was working while also going to graduate school. It was also a time during which we were on government assistance.
It's a year that neither of us have talked much about. I was on the low-income, free lunch program at school, and I still remember making the occasional trip to pick up our free allotment of government cheese. It was a far cry from the food stamp and various welfare programs of today, but it was assistance nonetheless, and frankly, it was humbling.
I was only six at the time, but I still remember standing out among others in the lunch line at school with my tickets for free lunch. We were poor. And as a child, I guess it didn't bother me as much as it does now. However, something good came out of that year. I swore to myself as I grew older that I - and eventually my family - would never be that poor again, nor would we rely upon the government (or anyone else for that matter) for assistance…and we haven't…ever. But maybe more than that, the experience created good financial habits and ethics that I am in turn working to pass along to my own children.
Forecasting and saving
Living paycheck to paycheck brings with it an uncertainty that I just don't feel comfortable with. This is why, as soon as I graduated from college and paid off my student loans (in less than a year), I started creating a budget, tracking my expenses, and forecasting future costs. Maybe more importantly, I began saving.
Initially, I set a goal of building a $1,000 reserve fund, which was as much as I could set aside considering my meager income. Eventually, I built that into a $5,000 emergency fund, and have now set course for a longer-term, eight-month emergency fund. Remembering what it was like not to have money makes me plan better and work harder to avoid putting my own children in a similar situation to the one that I was in as a child.
Better budgeting
I still remember my mother using the envelope system (putting money in budget-category labeled envelopes each month) to better budget our income. While we don't use actual envelopes, our family uses a form of this system with our budget spreadsheet. By setting fixed amounts aside each month for our regular budget elements - food, entertainment, utilities, housing costs, kids, clothing, etc. - we not only have a better idea of what we'll spend each month, but we pin ourselves down to specific spending levels rather than leaving it up in the air.
Creative ways to save
My mother was a master of finding creative ways to save. During the winter time, she'd partition the house so we could live in and heat a smaller portion of it with a wood-burning stove rather than with our furnace. She'd grow food for us in our garden and sell the extra produce at the local farmer's market. And we'd go to garage sales and auctions for many of our clothing, household, and furniture needs.
I've adopted many of the same strategies, closing off rooms and vents seasonally to save on heating and cooling costs. I utilize garage sales and resale shops to keep our clothing costs under $300 annually for a family of four. And I've inherited that entrepreneurial spirit that allows me to handle our childcare duties at home while also earning an income through freelance writing and online sales.
So while that rough intro to the world might not have been easy, it was an experience that allowed me to build a financially independent future for myself and my family.
More From This Contributor:
Building a Revenue Producing Blog
I Won't Be Waiting to Take Social Security
Preparing to Publish My First E-book
Disclaimer:
The author is not a licensed financial professional. This article is for informational purposes only and does not constitute advice of any kind. Any action taken by the reader due to the information provided in this article is solely at the reader's discretion.
It's a year that neither of us have talked much about. I was on the low-income, free lunch program at school, and I still remember making the occasional trip to pick up our free allotment of government cheese. It was a far cry from the food stamp and various welfare programs of today, but it was assistance nonetheless, and frankly, it was humbling.
I was only six at the time, but I still remember standing out among others in the lunch line at school with my tickets for free lunch. We were poor. And as a child, I guess it didn't bother me as much as it does now. However, something good came out of that year. I swore to myself as I grew older that I - and eventually my family - would never be that poor again, nor would we rely upon the government (or anyone else for that matter) for assistance…and we haven't…ever. But maybe more than that, the experience created good financial habits and ethics that I am in turn working to pass along to my own children.
Forecasting and saving
Living paycheck to paycheck brings with it an uncertainty that I just don't feel comfortable with. This is why, as soon as I graduated from college and paid off my student loans (in less than a year), I started creating a budget, tracking my expenses, and forecasting future costs. Maybe more importantly, I began saving.
Initially, I set a goal of building a $1,000 reserve fund, which was as much as I could set aside considering my meager income. Eventually, I built that into a $5,000 emergency fund, and have now set course for a longer-term, eight-month emergency fund. Remembering what it was like not to have money makes me plan better and work harder to avoid putting my own children in a similar situation to the one that I was in as a child.
Better budgeting
I still remember my mother using the envelope system (putting money in budget-category labeled envelopes each month) to better budget our income. While we don't use actual envelopes, our family uses a form of this system with our budget spreadsheet. By setting fixed amounts aside each month for our regular budget elements - food, entertainment, utilities, housing costs, kids, clothing, etc. - we not only have a better idea of what we'll spend each month, but we pin ourselves down to specific spending levels rather than leaving it up in the air.
Creative ways to save
My mother was a master of finding creative ways to save. During the winter time, she'd partition the house so we could live in and heat a smaller portion of it with a wood-burning stove rather than with our furnace. She'd grow food for us in our garden and sell the extra produce at the local farmer's market. And we'd go to garage sales and auctions for many of our clothing, household, and furniture needs.
I've adopted many of the same strategies, closing off rooms and vents seasonally to save on heating and cooling costs. I utilize garage sales and resale shops to keep our clothing costs under $300 annually for a family of four. And I've inherited that entrepreneurial spirit that allows me to handle our childcare duties at home while also earning an income through freelance writing and online sales.
So while that rough intro to the world might not have been easy, it was an experience that allowed me to build a financially independent future for myself and my family.
More From This Contributor:
Building a Revenue Producing Blog
I Won't Be Waiting to Take Social Security
Preparing to Publish My First E-book
Disclaimer:
The author is not a licensed financial professional. This article is for informational purposes only and does not constitute advice of any kind. Any action taken by the reader due to the information provided in this article is solely at the reader's discretion.
