6 Steps to Thrive Financially During Recession
In tough economic times, it is still possible to thrive. It requires a major paradigm shift: to see that an abundant life does not consist in having a bunch of stuff and spending a lot of money. In fact, it’s just the opposite: having less stuff, and saving a lot of money. We need to redefine what it means to be “well-off.” In her new book Money Secrets of the Amish, journalist Lorilee Craker interviewed Amish families to determine how they were able to thrive financially during the recession. Here are some ways that you can follow the Amish example to save money and be happier during the recession.
1. Visit thrift or second-hand stores, both to buy and to sell
- One of the industries thriving in this recession are thrift stores. Shopping at Goodwill has become cache instead of passé. While charities like Goodwill or Salvation Army will take your used clothes as a donation, other stores will buy gently used clothes or give you store credit. And you can often find new or nearly new designer clothes at thrift stores for a fraction of the price of new. Craker discovered that the Amish don’t necessarily make all of their own clothing. “Almost every Amish man or woman I interviewed mentioned garage sales and ‘reuse-it’ shops as their main sources of bedding, linens, socks, baby Onesies…” she writes.
2. Learn to delay gratification
- So often, we think self-indulgence—buying something the moment we see it, just because we want it—will make us happy. But it usually only leads to buyer’s remorse—and often, to debt. When we can learn to put off purchases, to save instead of frittering away our money, we can begin to thrive—and to save for the things that really matter to us. Craker interviewed one Amish man who managed to save $400,000, so that he could purchase his own farm. It took him 20 years—that’s a long time to delay gratification, yes. And he did it while renting a farm and raising a family—a family of 14 children!
3. Pay yourself first
- Each time you earn money, put some away into savings. Many employers can automatically deduct money to put into your 401K, so you won’t even notice that it’s “missing.” If you’re self-employed, set goals for saving—it helps to have something concrete to save for: a trip, a house, education. Remember that saving money means not spending it. Buying something on sale to “save” money does not save you as much as if you simply forgo the purchase and put the money in the bank!
4. Pay your bills on time
- When you pay bills late, you are wasting money on late fees and other charges. Craker notes that “paying on time is one more way the Amish keep their money, and part of the reason they do so well at is is that they are highly motivated.” She explains that in the Amish culture, there is a sense of shame for those who go into debt or pay late on bills—and that cultural pressure to honour your debts actually helps them save money.
5. Recycle and reuse as much as you can
- This goes beyond just putting out your recycling bin at the curb. The Amish (and lots of other thrifty people) wash and reuse plastic containers or glass jars, hand down clothes or re-purpose scraps of metal or wood into useable things. The added benefit of this habit is that it is also environmentally conscious.
6. Remember that the best things in life are not things
- Remember that the best things in life are not things. Craker, who experienced a “money makeover” by investigating the financial habits of the Amish, found herself spending less money, but spending more time with her family. “Ironically, the less we spend on family time, the closer we get,” she wrote. “The Amish would not be surprised by this. They know investing in relationships is a far greater venture than devoting money for material things. Their pared-down lifestyle, slower in rhythm than ours but rich in togetherness, has produced a type of closeness that can’t be bought.”
I would add a seventh: Remember to take care of what you have. We’ve had the carpet in our house for 25 years (no shoes, careful cleaning); I drive a 14 year-old car that looks nearly new and has plenty of miles left on it. Not having to replace things like these can save a lot.