What my Granny taught me about Financial Planning

Ok so I’m going back a few years (decades actually) to when I was at high school, and I used to visit my paternal grandmother every day at lunchtime. She lived in walking distance of the school.

To be honest I never gave much thought to learning from her - I just enjoyed her company - and vice versa. I reckon my desire to learn was taken care of at school, but when I think back, I realize that those times with her were equally, if not more so, wonderful times to learn about life. She was well into her 80s at that time but sharp as a tack.

She never preached at me (” Young folks nowadays have no idea what we went through”). Even though she and her family suffered through the First World War, she rarely mentioned it.

Money was tight. A mere State Pension and no savings. Pennies were treated like diamonds. She kept a small purse and all her money resided in it - all of it - apart from the “Mantelpiece Bank”

In fairness she ate well and kept the house warm in the winter. She made lunch each day for me, and it was more than adequate. Good old home cooking.

The Mantelpiece Bank?

Yup.

Houses in those days had coal fires and large mantel pieces up above. They were great storage places for jars, tins, small dishes etc. She used it a lot.

Her weekly routine for housekeeping meant that the butcher would come around the street every day in his wee van. She wouldn’t go out to him every day, but he would always shout to her to see if she needed anything. (Online shopping - yeah right !!)

Same routine with the baker, the milkman, the fishmonger, the hardware guy. Oh yeah those WERE the good old days.

She knew what she wanted to buy every week and when to go outside to get it. In rainy weather (in other words in Scotland that means every day), they would come to her door and hand it over. She’s pay them and everyone was happy.

Her financial planning was brilliant.

She knew the price of things and would drop the correct amount in a jar for the butcher, then more money in the jar for the baker, then the fish guy and so on. Not a penny more, not a penny less. So, when the relevant day arrived, she’d simply grab the jar, empty it into her hand and pay the man.

That was budgeting.

Everything worked like clockwork and “actual versus budget” was rarely a problem.

But now and again, she would yield to temptation.

“I have a nice wee bit of sirloin today”, said the butcher. “Oh, go on then” she’d say.

The jar was needing to be topped up this time. But where would she get it from as there was no excess?

From the baker’s jar!!!

Then panic set in - while she had yielded to temptation, she knew that the next week’s housekeeping was in disarray. She fretted big time. OK it was her own fault but ……

The lesson was simple.

Make sure you stick to your budget on the one hand of course - but realize the psychological self-inflicted damage cause. She would lie away that night worried she wouldn’t get by this week. She berated herself. “Why was I so stupid?”

So, at an early age I realized the impact of money - not only financially - but perhaps more so, the impact of bad financial management on how you feel about yourself. The trauma, the pain, the sleepless nights, the mood swings, etc. Recognize that feeling?

I promised myself to never put myself into that position - EVER.

I succeeded for the rest of my life - the odd bump in the road of course - but the concept has NEVER left me … to this day.

Thanks Gran.