6 Depression-Era Money Lessons My Grandparents Taught Me

Here are the values I hold close to my heart, all these years later.

My grandparents were only children in the Great Depression, and they learned a lot from their own parents during that difficult time. When they first were married, they had no money at all. They were very, very poor. But they were happy.

These two amazing people taught me many lessons in life — how to be a good person, how to sew and so much more. I remember watching my grandfather auction off cattle and pigs. Thinking back, it really amazes me how much they taught me without sitting me down. I suppose they led by example.

Of all the lessons they taught me, some stand out more than others, of course. Here are the values I hold close to my heart, all these years later.

1. Don’t Waste Food

I remember going to my grandma’s house and opening the refrigerator, or what my cousins and I often called “the ongoing science experiment.” Inside, you would find containers with a tiny scoop of potatoes or a completely dried out stalk of corn. When we tried to throw them out, she would get upset and tell us we could still eat it (which we never let her do, by the way). Still, it served as a lesson. Don’t throw things out immediately, save it or have it for dinner the next night.

When it comes to food, make sure you only purchase what you will eat. That way you’ll waste much less.

2. Know Your Wants Vs. Needs

The needs in your life include food, clothing, shelter and utilities like water and power. Your wants are different. You want a cell phone, but you don’t need it.

When we learn to identify our wants and needs, we become wiser about how we spend money. We hold onto it and get what we need. We also allow ourselves the occasional want — but not until our needs have been met. Learning to identify your wants vs. your needs is a crucial step in financial planning.

3. Pay With Cash

Unfortunately, I forgot this lesson when I was younger. Because of using credit unwisely, I got overwhelmed with debt and turned to bankruptcy for a way out. I then got married, and my husband and I built up more debt and had to dig ourselves out of the hole.

During the time we were paying it off, we switched back to using cash for everything. As a result, we gained better control of our money, because it really made us think about how we spent. We didn’t just rush out and get things because we could.

Looking back, I recall my grandparents always using cash, too. In fact, they did not even own a credit card. It was not that they couldn’t get one, they just decided not to. They said if they could not pay for something with cash, then they did not need it. (Not sure where your finances stand? You can view two of your credit scores for free on Credit.com.)

And though they were not rich, when they retired, they lived comfortably. They had been wise enough with their spending that they were able to enjoy their retirement. In fact, my grandmother supported herself for many years until she got too ill and had to enter a nursing home.

4. Find Joy in Simple Things

When you ask people what makes them happy, some say it is their house, their car or even their gadgets. For others, it could be the expensive handbag or new watch they purchased.

When you asked my grandparents this question, their answers were always the same: things that were free. Playing games with the kids. Campouts in the backyard. Having joy doesn’t mean that you own a big house. It means you find happiness in the people and things around you. Find your own joy and don’t rely on things to give it to you.

5. Cook at Home

My grandma was an amazing cook. She owned a small cafe in the same building where my grandpa was an auctioneer.

Every Saturday, the cafe would be filled with farmers from all around the area coming in for one of her amazing caramel rolls or cinnamon rolls. When an auction ended, they’d stop in for a good home-cooked meal followed by a slice of Grandma’s award-winning pie.

Then, after a long day of cooking for others, Grandma went home and did it again. There was always a home-cooked meal on the table for her family. She planned her meals and any shopping trips wisely so she always had what she needed to cook for her kids.

My grandparents did not eat out very often. There was a garden where they grew their own vegetables, and the chickens they raised provided eggs and meat.

While I don’t have a garden or a small farm, I still cook most of our meals at home. I find it not only tastes better but is healthier. The best perk of all is sitting around the dinner table with my kids and having incredible conversations. I can often picture my own grandparents doing the same thing. Sharing a meal really matters.

6. Save for a Rainy Day

Nowadays, I don’t call my savings a rainy-day fund but an emergency fund. But the idea is the same. My grandparents always saved a bit of every dollar they made “just in case.” This was money they never touched until they had to. For them, and even our family, having money set aside provides peace of mind. (You can see more smart habits of savers here.)

Though my grandparents are both gone, the values they taught me live on. I am now taking the time to teach these to my own children. I hope that they, too, pass them along to their own kids someday. The 1930s may be in the past, but the lessons learned during that time can still resonate and work today.

This story is an Op/Ed contribution to Credit.com and does not necessarily represent the views of the company or its partners.

 

Image: SolStock

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The Best Ways to Handle Your Money When Traveling

Here are some of the more common options, along with their pros and cons.

So you’ve picked your destination, booked your flights and packed your bags. Planning a trip is always equal parts exciting and stressful as you figure out the logistics. One thing many people fail to look into is how they’ll handle their money when they’re away. Whether you’re traveling abroad or one state over, you need to figure out the best way to make purchases during your trip. Here are some of the more common options, along with their pros and cons.

Cash

Arguably the easiest way to pay for things while traveling, cash also has drawbacks.

Pros — If you’re good at estimating how much you spend on travel, cash might not be such a bad idea. If you can make one trip to the ATM and be done, that’s probably the fastest and least obtrusive way to deal with money when traveling.

Cons — Taking out a wad of cash isn’t the best idea, for safety reasons. It’s probably better to make multiple trips and carry only as much as you need in case it gets lost or stolen. Remember, if you’ll need foreign currency, your bank may charge you a foreign transaction fee to take out cash. There may be additional fees associated with taking cash out at foreign ATMs as well. Check with your bank before taking money out and learn some credit and debit card tips for overseas travelers.

Credit Cards

Credit cards offer a fairly stress-free way to deal with your finances when traveling — but beware user fees.

Pros — Paying with a credit card means never having to worry if you have enough money for goods or services. Paying with your credit card also usually offers you a level of protection that cash doesn’t. Check with your provider to determine their policy on trip insurance or if they have any travel discounts. If your card is lost or stolen, you won’t be responsible for charges you didn’t make. If your card has a good rewards program, you’ll earn those rewards with every purchase you make. (Be sure to keep an eye on your credit score for any unexpected changes. They could be a sign of identity theft. You can check two of your scores free on Credit.com.)

Cons — Even if you plan to make credit cards your go-to payment method during your trip, it’s a good idea to have a little cash, for things like cab rides and tips. The other downside of credit cards: foreign transaction fees. Many credit card companies charge fees for every swipe in a foreign country, which can add up. Check with your bank for specifics. (Here’s how to avoid currency conversion fees.) You might also want to look into the best overall travel credit cards of 2017, as well as the best international travel credit cards, if you travel abroad frequently.

Prepaid Travel Cards

Prepaid travel cards may not be as popular as other payment methods, but they’re becoming widespread and may be worth looking into for your next trip.

Pros — Details vary based on the issuing bank, but in general, these cards all work the same way. You can purchase your prepaid travel card online or at your bank. Activate and register your card, then load it with whatever amount of money you want. You can add more later online in most cases, assuming your card is reloadable. Be sure to ask, as prepaid travel cards carry limits. Most prepaid travel cards come with additional perks. Check with the bank to see yours. They also typically carry the same protections as your regular credit card like zero-liability protection.

Cons — You need to track of how much you spend on your prepaid travel card since it comes preloaded with a set amount of money — a good thing for big spenders. Also, unlike a regular credit card, you need to reload your card with money when you run out. You’ll likely incur foreign transaction fees, and some companies charge higher fees for prepaid travel cards.

Traveler’s Checks

Traveler’s checks work in a similar way to cash, but offer more protections.

Pros — Unlike cash, identification and signature verification are required to cash traveler’s checks, and if they’re lost or stolen, the issuer will usually replace them without a problem.

Cons — You may pay a small transaction fee to pick up your traveler’s checks, but in most instances if you’re getting them from your normal bank, they will be free. As with cash, you must make an educated guess on how many you’ll need for your trip. Additionally, while travelers checks are accepted at the same rate of exchange as cash, not all places accept them. Do your research before you decide to use this method of payment. It likely won’t be the only one you’ll need on your trip.

Image: RossHelen

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11 Reasons Why Cash Is Still King

Here are 11 reasons why you might want to pay with cash — or at least keep some on hand.

All I wanted was some cilantro and onions, and I didn’t have the money. Correction: I had the money, but it was in my bank account, not in my pocket. The corner fruit market I go to when I need a couple of quick ingredients only accepts cash for small transactions. My plastic wasn’t going to help me.

My wallet was empty, but my husband had a couple bucks in his pocket, so dinner was saved. But the experience made me remember sometimes it pays to have old-fashioned currency on hand.

Not all Americans agree cash is still king. About a third of people in the U.S. never or rarely carry cash, and 34% said they would go completely cashless if they could, a 2017 ING International survey found.

These days, you can use cards or mobile payments for everything, from taxis to paying the babysitter, meaning it’s easier than ever to live without cash. At some stores — such as Amazon’s brick-and-mortar bookshops — paying with cash isn’t an option. But a fully cashless society isn’t here yet, and there are still good excuses for keeping a few bills tucked in your wallet.

Here are 11 reasons why you might want to pay with cash — or at least keep some on hand.

1. It’s Accepted (Almost) Everywhere

Unlike your American Express or Discover Card, cash is accepted almost everywhere. Most merchants in the U.S. happily take greenbacks for payments, even as they refuse to run your credit or debit cards for smaller purchases. Of course, the flip side of the cash-only (or cash-preferred) business is the one that requires you to pay with a card. That’s a perfectly legal practice, and one common in certain industries. So it’s smart to carry both cash and plastic. (Here are the best low-interest cards to consider.)

2. It’s Useful in Emergencies

Credit cards are convenient, until they don’t work or aren’t available. If the power goes out or your wallet is stolen, you’ll be happy you have some paper money tucked in a cookie jar. In fact, the government includes cash on its disaster supplies list, along with essentials such as food, water and prescription medications. Although you shouldn’t hide your life savings under your mattress, $100 or $200 will buy gas or food if the unexpected happens.

3. It Can Save You Money & Hassle When Traveling

You need cash if you’re on the road, especially if you’re venturing abroad. Not only are cards not accepted everywhere, but pockets get picked, ATMs eat debit cards and other misadventures can befall you. Cold, hard cash can get you out of a jam almost anywhere. It’s best to carry a small traveler’s emergency fund on you separate from your main wallet and leave the rest of your cash and a backup credit card in the hotel safe.

4. Your Server Will Love You

You can add your tip to your credit card receipt when you pay the bill for dinner, or you could make your server smile and leave the cash on the table. Your waiter or waitress will be able to collect their earnings right away, rather than waiting for your tip to show up on their paycheck. Plus, restaurant managers sometimes take credit card fees out of tips that show up on cards, which means less for your hard-working server.

Cash is also useful for other tipping situations. The maid or bellhop at the hotel isn’t carrying a Square reader in their pocket, and if you want to tip your Uber driver, you’ll need bills because there’s no way to tip in the app.

5. You Might Get a Discount

Card issuers charge businesses a small fee for processing transactions. Some businesses pass the charge on to customers in the form of an extra fee. Others, especially in states where such surcharges aren’t allowed, offer cash-payment discounts. For consumers, the difference is one of semantics, but the point is sometimes cash will save you money. Cash discounts are especially common at gas stations in certain areas, where you’ll usually save 5 to 10 cents a gallon if you pay with paper rather than a card.

Gas stations aren’t the only ones cutting prices for those with greenbacks. Doctors might slash bills for uninsured patients if they can pay their bill in cash. Jewelry stores might also offer cash discounts.

6. You’ll Spend Less

Do you really spend more when you pay with plastic instead of cash? Studies say yes. Researchers at MIT found people who were told to use a credit card instead of cash were willing to pay more for purchases. Another study found people paying with cash were more likely to focus on an item’s cost, rather than its benefits. In a third study, consumers who were urged to pay cash for small purchases had less debt after six months than those who didn’t receive the same advice.

7. You’ll Enjoy Your Purchases More

Not only will you spend less when you pay with cash, you’ll also get more enjoyment out of what you buy. We have greater emotional attachment to purchases we make with cash than those we put on credit, a study published in the Journal of Consumer research found.

8. You Won’t Run up Debt

If you’re one of the many Americans who have trouble using credit responsibly, going cash-only has a significant benefit: You won’t be able to run up more debt on your cards. Give yourself a cash budget for the week and stick to it. If the money isn’t in your wallet, you can’t spend it.

9. It’s Perfect for Certain Types of Budgeting

Some people give themselves a cash budget to control discretionary spending, but they still use cards for other purchases. Others go all-in with cash, switching over to what’s commonly called the “envelope system.” Popularized by author Dave Ramsey, this approach to budgeting involves dividing all your money for a month into different envelopes — say, $400 for groceries, $200 for gas and $100 for lunches at work.

You only use money from the grocery envelope to pay for groceries, and when it’s gone, it’s gone. The rigidity of the envelope system doesn’t appeal to everyone, but for those trying to live within a strict budget, it works.

10. Your Bad Credit Won’t Be an Issue

So reckless credit card use or other financial problems have tanked your credit score. That means you’ll pay a premium in the form of higher interest next time you need to borrow money. But if you can pay cash instead, you can minimize or avoid the bad-credit penalty. (Not sure where your credit stands? You can view two of your credit scores for free on Credit.com.)

Use hard currency for your next used car and you won’t have to deal with crummy loan terms. At the furniture store, you might not qualify for the special financing, but showing up with a wallet full of $100 bills could earn you an even better deal: a cash discount.

11. Your Purchases Stay Private

There’s a reason criminals like to do business in cash: It’s hard to trace. But even law-abiding citizens who value their privacy appreciate the anonymity of cash transactions.

Aside from the possibility of identity theft, credit card companies and retail stores sell your purchase data, which marketers then use to try to sell you more stuff. In one infamous case, a teen’s purchases at Target clued the store in to the fact she was pregnant. The chain then sent the mom-to-be some coupons for baby stuff, much to the surprise of her parents.

The Cons of Paying With Cash

Cash has advantages, but there’s a reason most of us don’t rely on it exclusively. For one, it’s difficult or impossible to use it in certain situations. If you want to pay cash for your plane ticket, you’ll need to make a special trip to the airport, and renting a car without plastic is difficult.

There are drawbacks to cash that go beyond inconvenience. Cash can be lost or destroyed. You won’t get perks, such as purchase protection, that you get with some credit cards. Rewards points are nonexistent, and some people find it harder to keep track of cash purchases than those on cards. The disadvantages of sticking strictly to cash are enough to make a hybrid solution — cards for some purchases, cash for others — the right choice for most people.

This article originally appeared on The Cheat Sheet.  

Image: LarsZahnerPhotography 

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Want to Buy a Home in One of These 17 Markets? You’d Better Have Cash

Cash purchases still dominate in some housing markets. Here's why.

In 2005, Randy Moss, then a wide receiver for the Minnesota Vikings, pretended to moon Packers fans after scoring a touchdown. The NFL fined him $10,000. Asked by a reporter how he would pay, Moss responded succinctly: “Straight cash, homey.”

While cash purchases have dropped since the housing market bottomed out in 2012, many areas are still dominated by buyers taking the Moss approach when buying a home. According to data published by ATTOM Data Solutions (formerly RealtyTrac), at least 45% of the sales made in 17 metro areas were conducted using cash in 2016.

Cash sales are common in Florida, where retirees use the proceeds from sales in their home markets to buy retirement properties. But in other places, the prevalence of cash sales is driven largely by institutional investors, which ATTOM defines as any entity that buys at least 10 properties in a year, said Daren Blomquist, senior vice president for the property data company. In Binghamton, New York, where nearly 70% of home sales in 2016 were made in cash, the rise of such purchases over the past three years mirrors a rise in institutional investor sales.

The following are the 17 metro areas where cash sales were most common in 2016. (A note about the data: Some states are not required to disclose property sale information publicly, so there’s no cash-sale data for Alaska, Indiana, Louisiana, Missouri, New Mexico, Texas or Utah. Percentage denotes portion of total home sales that were made in cash.)

  1. Cape Coral-Fort Myers, Florida: 45%
  2. Huntington-Ashland, West Virginia, Kentucky, Ohio: 45.7%
  3. Trenton, New Jersey: 46%
  4. North Port-Sarasota-Bradenton, Florida: 47.2%
  5. Fort Smith, Arkansas, Oklahoma: 47.6%
  6. Ocala, Florida: 47.7%
  7. Urban Honolulu, Hawaii: 47.7%
  8. Atlantic City-Hammonton, New Jersey: 48.3%
  9. Reading, Pennsylvania: 48.4%
  10. Miami-Fort Lauderdale-West Palm Beach, Florida: 48.8%
  11. Raleigh, North Carolina: 50.1%
  12. Naples-Immokalee-Marco Island, Florida: 52.4%
  13. Montgomery, Alabama: 52.5%
  14. Macon, Georgia: 52.5%
  15. Syracuse, New York: 58.4%
  16. Buffalo-Cheektowaga-Niagara Falls, New York: 63.6%
  17. Binghamton, New York: 69.4%

Who’s Got All That Cash?

Institutional investors — mostly big banks — gobbled up lots of houses after the recession in big markets like Phoenix and Atlanta, but smaller copycats, operating in smaller markets, adopted the practice in recent years. These mid-tier investors usually seek homes priced around $150,000 or less, Blomquist said.

“They’re looking typically for starter homes they can rent out to people who would otherwise be first-time home buyers,” he said.

Recently, a number of web-based companies that allow individuals to buy, rehabilitate and rent properties remotely have sprung up, Blomquist said. These companies, like, for example, HomeUnion, Investability and Roofstock, typically pay cash for properties as well.

Institutional buyers can squeeze out regular folks looking to buy homes for themselves, but there’s good news for these people. Blomquist expects the practice to become less prevalent as banks become more willing to finance purchases. A drop in distressed sales, which in many states must be conducted in cash, should also contribute to a decline in cash purchases.

If you are looking to finance a new home, be sure to check your credit score to make sure it’s up to snuff — your lender certainly will. You can review two of your credit scores for free, updated every 14 days, on Credit.com. And make sure to avoid the pitfalls a lot of first-time homebuyers make.

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