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- When my parents first got engaged, my father went to the library to read about “married peoples’ finances.”
- The book he checked out recommended tracking every penny of your spending, then budgeting based on your spending.
- Following that advice for over 50 years has allowed them to buy homes, put us through college, and retire comfortably.
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Immediately after asking my mother to marry him, my father began to panic.
His worry stemmed not from having popped the question to someone he’d only known a scant six months, though. Instead, he was stressed about savings.
It was December 1967, and my father did what any good scholar would do: “I went to the library and checked out a book on married peoples’ finances,” he told me in a recent interview. Both my mother and my father — who were 22 and 29 at the time — vividly remember the book’s No. 1 piece of advice: Keep a record of every single penny you spend. And so they did, recording each and every expenditure — from a 5 cent pack of gum to a carton of cigarettes — in a spiral-bound notebook.
What began as a month-long experiment quickly turned into a way of life, where actual spending habits provided the structure for both planning and saving — a strategy my parents continue to live by 53 years later.
Setting up their budget
Year one proved experimental. As the pages of the aforementioned notebook were filled each month, clear categories began to take shape: UTILITIES and INSURANCE; FOOD and CLOTHING; SAVINGS and INCIDENTALS.
Each expenditure was carefully recorded, and receipts were stuffed in a business-size envelope. At the end of the first year, my parents tallied each category’s grand total and divided it by 12. This figure then became their budget — in each respective category — for the following year.
The benefits were twofold: Not only did the young couple see where their hard-earned money was going (my dad’s salary at the time, as a boarding school teacher in the northeast, was a whopping $5,000), but they were also prepared for “big bills,” like car and property insurance, when they arrived in the mail. Another perk? My parents’ choice to diligently track spending each year meant their budget waxed and waned with their spending patterns.
Going ‘cash only’ kept them on track
To complement their strict budget, my parents adopted a cash-only approach to purchases. “At first, we had just enough [money] to cover costs,” my father said. “Which means if it wasn’t necessary, we didn’t buy it,” my mother chimed in.
Family legend has it that in order to purchase a rototiller (my dad has been an avid vegetable gardener for close to 50 years), the newlyweds gave up bacon and bourbon for close to a year in order to save the $200 and change to purchase the equipment. They remember scoffing at a colleague’s purchase of a brand new dining room table and chairs — all on credit — and instead stuck to their budgeting regimen. Going without those items, considered luxuries, was “just enough to tip the scales” — and the exercise quickly got them accustomed to cash-only purchases as opposed to credit.
This trend applied to the purchase of my parents’ first home (a fixer-upper in the country to escape school dormitories come summer); vehicles (growing up, we had just one car, which would be driven into the ground before replacing); and college tuition for me and my three siblings (my parents repaid each of our subsidized Stafford Loans, also known as Federal Family Education Loans, prior to the interest-free grace period expiring).
How my parents saved and invested
Perhaps most impressive was my parents’ ability to save. “We always had a savings plan,” my mother explained. Any funds not directed to one of their spending categories — which, as our family grew, expanded to include EDUCATION and ENTERTAINMENT — were directed toward savings.
Their first investment, purchasing stock in T. Rowe Price, came on the advice of the business manager at the school where my father taught. From there, accrued savings were used to invest in two different IRAs.
“We were always incredibly frugal,” my mom said, remembering that big costs — like college tuition and finally the mortgage on a home when they upgraded — were always paid first. And for the past dozen years, my father’s Social Security check goes straight to the bank. “It never gets spent, it goes straight to savings,” my mother reported proudly.
My parents are comfortable in retirement
Today, my mother and father are 75 and 81 respectively. They effectively live off the pension my mother earned after retiring as a public school teacher in Massachusetts; my father’s TIAA/CREF, which grew with matching employer contributions, remains untouched — where it continues to earn interest — save for the 4% Required Minimum Distribution (RMD) they must withdraw annually to satisfy federal tax rules.
I have my own clear memories of “the notebook” that tracked our spending. Well into my teenage years it lived in the junk drawer, just below the wall-mounted rotary-dial telephone, in our kitchen. My mother’s entries were bold, made in precise, smooth script with blue ink; my father’s entries were lighter, scrawled with a mechanical pencil likely taken from the breast pocket of his button-down work shirt. While she marked groceries and doctor co-pays, he made note of haircuts and gas station fill-ups.
Despite their myriad differences, my parents managed to meet in the middle when it came to finances. “We always discuss purchases beforehand,” is my father’s cardinal advice. “We’ve always been pay-as-you-go people,” is my mother’s best rule of thumb.
In the span of five decades, little has changed — save for the fact that they now have a credit card, the balance of which my mother pays each month, in full, when she writes checks from the kitchen table. Long gone are the Shearson Lehman Brothers checks, with a box to designate the spending category, but their savings strategy remains strong — a testament to persistence and structure, which can clearly be categorized with an “S” for SUCCESS.
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