“Look back to learn how to look forward.” ~ Joe Girard
Our grandfather’s generation wasn’t perfect. They had their own set of flaws and weaknesses.
But they got a lot of things right. And one of those things is how to handle your finances.
Grandpa learned his financial lessons from the school of hard knocks. He lived through the Great Depression, which taught him to live leanly, to save, and to be grateful for what he had. And he lived in a time where staying out of debt was a matter of independence, pride, and self-reliance, something he believed reflected on a man’s most precious resource – his character.
We’ve unfortunately forgotten many of Grandpa’s lessons on finance. But they’re just as true as they ever were. So today let’s dust them off and re-discover these tried and true principles.
1. Resourcefulness
“If money is your hope for independence you will never have it. The only real security that a man will have in this world is a reserve of knowledge, experience, and ability.” ~ Henry Ford
One of the things I respect most about my grandfather’s generation was their resourcefulness.
And let me point out here that resourcefulness is not simply being cheap. Nobody enjoys a cheapskate.
But while my grandfather was far more thrifty than I am, he wasn’t cheap. He was just a lot more resourceful.
To put it simply, resourcefulness is the intersection of self-sufficiency and creativity.
This combination can help our finances in several key ways:
- It fosters a “use it up, wear it out, make it do, or do without” mentality. If something breaks, try to fix it yourself. Use up your belongings until they no longer work – just because a new version of something came out, doesn’t mean you need it. Borrow instead of buy. Trade goods and services with family and friends.
- It makes employees irresistible. As an employer, one of the first traits I look for in a team member is resourcefulness. I care far less for credentials and experience. Show me someone who can creatively solve a problem and I’m sold!
- It’s essential for the self-employed. Business owners don’t have a choice in our current environment. It’s adapt or die – and constantly practicing resourcefulness will give you the flexibility to survive.
- It’s a fundamental principle of negotiating. We’ll get into this below, but the more flexible and resourceful you can be in a negotiation, the more likely you’ll be able to arrive at a desirable outcome.
2. Awareness (The Pocket Notebook)
“Problems cannot be solved at the same level of awareness that created them.” ~ Albert Einstein
Einstein was right. It’s impossible to take back control of our financial life unless we become more conscious.
My grandfather had a particular habit that made it almost impossible for him to forget the details of his life. He never went anywhere without his pocket notebook.
The Art of Manliness has explored the pocket notebook’s manly history and the famous men who used them. Carrying a little notebook with you is useful for brainstorming, writing down ideas, and keeping track of goals. They’re also handy when it comes to our finances, as they can be leveraged to help track our everyday spending.
When John D. Rockefeller got his first job as a young man, he bought a small red ledger book for 10 cents. He called it Ledger A and took it with him everywhere. Within its pages, he kept track of every single penny he spent or donated. Once Ledger A was filled up, he bought another and called it Ledger B, and continued this habit throughout his life as he rose from assistant bookkeeper to corporate titan. He considered his ledgers to be among his most prized possessions, and he taught all his children to keep track of their expenditures just as he had done.
Men from all walks of life and levels of wealth did likewise. But eventually the idea of tracking your spending in a pocketbook was replaced by the use of checkbooks. Everyone was carrying checks anyway, so it made great sense to track spending, check balances, and keep notes in the same place.
But over the last 40 years or so, the emergence of plastic cards has once again changed the way we stay aware of our spending. Credit cards have ushered in the era of “Swipe and Analyze.”
We charge all of our purchases with no tracking or monitoring and analyze them 30, 45, or 60 days later when the bill comes (or sometimes not at all). This is no way to take charge of your finances!
The extinction of the pocket notebook and the checkbook has caused us to lose touch with our everyday spending. Credit card spending causes us to be detached from our money in the same way using chips at a casino encourages us to lose more.
We all love the convenience of spending with plastic, but we need to take steps to ensure we stay aware and on top of our spending.
If you haven’t given it a try, bring back the pocket notebook into your life. Its benefits stretch far beyond just your spending and financial life.
