‘A penny saved is a penny earned’

Elders’ financial lessons of the past can help today


If recent financial turmoil has taught us anything, it’s that we should pay attention to the age-old clichés our parents and grandparents passed on to us.

Take it one day at a time is the new reality for most Americans when it comes to financial recovery. Don’t put all your eggs in one basket is a poster child for diversification.

You get the idea. So keeping the “What’s old is new again” mantra in mind, here are some famous clichés from generations before that serve us well this year and beyond.

n Don’t cry over spilled milk. The recession is over and it is time to start putting the pieces back together. It might take a while (patience is a virtue after all), but you need to start somewhere.

n Save for a rainy day. Call it an emergency savings fund, rainy day fund or what you will. The idea is simple, but changing our behavior is not. Money is easy to spend and there’s no question that there is still plenty of “Gotta have it now” in us all. It’s time to slow down on spending and start saving.

Next, resist the temptation to raid your savings. While most Americans have plenty of credit card debt (and the issue needs to be addressed as part of your financial picture), resist the temptation to raid the savings to pay it all off immediately. Also, resist the desire to raid the savings for cash purchases. If you succumb, whenever the fund is used, the amount withdrawn should be replenished as soon as possible.

n A penny saved is a penny earned. For an emergency savings fund, a standard savings account or money market account should meet your needs. However, thinking even longer-term, consider certificates of deposit (CDs). CDs help force you to commit your money for a period of time, so they can help you start to make your savings a more permanent habit. It should be noted that the money is not accessible for the term.

You’re walking on thin ice. The economy got bad enough that some of us had to sacrifice the standard financial protection that we always took for granted. If you terminated your life insurance contract, now is the time to begin shopping around for a new one. It’s hard to think about, but if something happened to you would your family be able to maintain their current lifestyle? Could they stay in the house so the kids would not have to move and switch schools? The time to protect your family is now. And, you know what they say, never put off until tomorrow, what you can do today.

n Home is where the heart is. It’s also where much of your equity probably is too. Look into home equity loans to help you consolidate debt and get back on your feet. Lending standards are now tighter, but banks want your business and will work with you to meet your needs.

n Another day, another dollar; unless you are sick as a dog. While your savings should help protect you if you lose your job, what happens if you get sick or injured and cannot work for a period of time? Consider disability income insurance to help cover living expenses and protect your savings should that happen.

n Lend a helping hand. Reach out to others in need through charitable giving and by volunteering your time and talents. There is plenty of need out there right now and every little bit helps.

n Stop and smell the roses. We have all been through a lot the last several years. Virtually none of us were untouched by the financial turmoil. Perhaps your most important investment is time spent with family and friends.

You can find more information and less clichés, at www.thrivent.com


Dana Olson Erickson, ChFC, CASL is a Financial Consultant with Thrivent Financial for Lutherans in Stillwater. She can be reached at 651-439-7091.