Suddenly, being Amish is in! You see the ads on TV about Amish products, or about hiring an Amish builder or whatever else. It’s like the Amish have a certain low-key culture cachet that’s spread to the mainstream.
Now there’s even a book called Money Secrets of the Amish by Lorilee Craker that I read about in financial writer Greg Karp’s syndicated Spending Smart column. One thing the book’s author heard again and again from her Amish interview subjects was “Use it up, wear it out, make due or do without” as a kind of mantra.
The Amish also told Craker that their children grow up in a culture of thrift from the moment of birth. They learn to share, they learn to use stuff to its fullest and to not have a long list of wants. They have a culture that despises debt and prioritizes saving money. In fact, one man profiled in the book managed to save $400,000 on a farmer’s wage while raising 14 children!
But extremes aren’t necessary when it comes to saving money. Just go back to the baseline in your own life. That means you should never borrow money for lifestyle. You should never buy stuff on time with those “no payment, no down payment and no interest until…” plans that are so popular at furniture stores, electronics stores and elsewhere. You want to buy with real money, not with borrowing.
What holds true for furniture and electronics also holds true for buying a car. I recall one woman who called in to my show and had an 11 year old car that was on its last legs. She had taken out a five-year loan on the car when she first got it, but she kept making the same monthly payment into her savings account after the loan was done. Having done that for six years, she would now be able to pay cash for a new car.
Now, you probably can’t do that with a house. But you can with a car. Yet the numbers I’ve seen suggest only 1% of car buyers pay cash!
My suggestion is try to pick up some frugality wherever you find it. You don’t have to go all Amish on your family and ditch the electricity. But you should rethink what, when and how you spend so that you can make your purchases in cash.
I don’t want you to have the “I owe, I owe, so off to work I go” mentality in today’s economy. Jobs can be shaky these days. What happens if you’re suddenly without one?