TMC-01Value of Money Wisdom
“Value of Money Wisdom: Advice from Your Grandparents”

In the classroom: Royce Sutton, SVP and Community Development Director with Fifth Third Bank

Proverb 4:7 - Wisdom is the principal thing; therefore get wisdom: and with all thy getting get understanding.

We should treasure the wisdom that our grandparents and other seniors have when it comes to money. They speak from an important place that enables them to share profound pearls of money wisdom that may seem basic but if we would just draw from their knowledge is it comes from a place of experience.

During the Great Depression there was a popular saying that speaks to how we, today, should think about how we view and use money wisely.

That saying was:
“Use it up, wear it out, Make it do or do without”.

In this episode of "The Money Classroom" learn some of the money advice that Royce has received from his grandparents and other seniors.

1."Use It up, Wear It out, Make It Do or Do Without"

This rather catchy phrase was used quite a number of times during the Great Depression and is the perfect counterpart to the word 'frugal.'

USE IT UP!
We enjoy stockpiling and often don’t use all that we have—grocery items, cleaning solvents, clothes, etc

Tips:
Use up your stash before trying a new brand or going out to buy yet another 10 on sale

De-clutter, simplify, and eliminate.

Sell items in your home that you have not used in the past 2 years—use proceeds to pay off debt. Or you could give them away to a charity and get the tax deduction for 2015.

WEAR IT OUT!
An example of this would be an automobile purchase.

Tip:
When you buy a car, buy it until it is absolutely worn out and destined for recycling at the junk heap.

Don't fall into the trap of wanting a new car every 3 years just to keep up with the Joneses.

MAKE IT DO!
What you have may not be perfect, but if it is able to do the job, don't bother buying anything.

Tip:
If you run out of your favorite brand of ketchup in the house, but you have an old generic bottle that has been sitting around for a while that you don't really like. Make it do by adding flavorings such as spices to change what you don't like about it.

DO WITHOUT!
Find a creative way to do use something else.

Tips:
1. Perhaps you ran out of that commercial fertilizer for your plants. Why not try making your own at home by using egg shells, which are full of calcium, or your old coffee grounds?

2. Cook at Home. During the Great Depression, eating out was a rare treat. Today, it has turned from a treat to a routine habit, as seen in 2011 where 40.6% of American food budgets in general was spent on eating food away from home.

• If you must go to a restaurant, at least cut back on how frequently you go. Ask for water rather than an overpriced alcoholic beverage.

3.Free Things
There's no need to feel like staying at home is a punishment rather than a treat.
•Our grandparents were just trying to keep food on the table and didn't have the luxury of big-box malls to shop at.
•It can be nice to wind down and relax rather than always being on the go.
•Find free things to do like playing a sport with your friends, trying a new recipe at home, taking a book out of a library
•Learn a new skill such as a new language that could potentially increase your earning income in the future.

4. Live Within Your Means. Don’t spend more than you make.

• Control your impulse spending
oIf you have already lived happily with a set amount of money before, why change now?
• 50-30-10-10. Allocate your spending plan in this manner: Needs – 50%, Wants-30%, Savings 10%, Giving/Tithe 10%.

5. Pay yourself first. Regularly putting money away in a savings account is the first step to becoming a wealth builder.

6. Plan for the worst

7. Save

8. Pay Cash – You tend to be more thoughtful about your purchases and you can only use what you have. You tend to spend more wisely when actually you feel the money leaving your hands.

9. Pay down debt. Solutions: increase payment amounts, add no new debt, use your income tax refund to pay off debt, get a second job (legal side hussle) using sites like elance.com or flexjobs.com. Make a 13 mortgage payment –takes 7 years off your principle if you have 30 yr mortgage


When you do these things you will make things better
…for yourself, your family and your future!