This month’s winning suggestion “Buy American Challenge” has me thinking about my grandparents. If they could see the state of our economy now, they’d have said "You had it coming", and they'd have been right.
My grandparents, Gertrude and Charlie (pictured at right), lived their lives on a cash basis. They came of age during the depression. They were working class people and lived on the notion that you do not buy what you cannot pay for, and pay for it right now. They learned to live that way because the depression scared the wits out of everyone who survived it. It doesn’t matter what today is like, tomorrow it can all be taken away. So they learned early on never to waste and always plan for tomorrow.
They had a accordion file kept in the front right corner of their desk which had a pocket for each monthly bill. Throughout the month they collected singles and coins in each of those pockets and at the end of the month paid all their bills. Anything extra went into the bank – no question. They bought things only when they needed them. They bought quality over quantity every time and their things lasted them forever. If their couch was looking a little threadbare, they didn’t buy a new one, grandma made new cushion covers. They made healthy meals and then actually used all the leftovers on subsequent days. They clipped coupons and worked side jobs to save up for big purchases like vacations and cars, which they paid for in cash. Grandpa once asked a car salesman to remove the cigarette lighter from the new car he was purchasing and discount that cost because refused to pay for something he didn't use. They thought through every single purchase very carefully, even a $1.99 pair of stockings.
I used to roll my eyes at this. It seemed overkill to me, even as a kid. We used to laugh about these antics at the dinner table. However, even though grandma and grandpa never made much per year, their methods saved enough money for both of them to live a very comfortable life – grandpa into his mid 70s and grandma lived until she was 89. They owned a beautiful house (a two flat - built-in rental income - smart!) in a nice neighborhood, took the occasional vacation, were generous with their family and still were able to leave a sizable inheritance when they passed away. You know what they would have said about the current state of the economy and the average American? They’d have said “you were asking for it." And boy did we get it.
We allowed the lure of instant gratification rob us of our good sense. Credit cards at 18% interest and 30 year mortgages have us paying for the same item several times over. The foreclosure rate is soaring and people are declaring bankruptcy all over the country because the system we bought into is simply not sustainable. And we should have known better. If it sounds too good to be true… it is. And who told us that this plan was ok? Lending institutions – duh! It’s like Vegas – the house always wins. We REALLY should have known better.
Grandpa used to tell me “pay yourself first”. He advised me when I was quite young that if you make a dollar, put fifty cents in the bank. Smart man. I wish I had heeded his advice. I wish we all had. If we were taking grandpa’s advice we’d be mega-taxing the corporation who moved their manufacturing plant to Singapore to save money on labor. We’d be charging way more tax to importers of goods from foreign countries. We’d be buying raw materials within our own borders and saving jobs for Americans. We’d be planning for our future instead of taking what we can get now because it’s cheap and fun and who cares what happens tomorrow. We should have been taking more care all along to not just build our assets but to protect them as well. We need to start somewhere. We need to start now. Let’s start with buying American.