The #1 Thing Your Grandparents Knew About Money That You Don’t

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It might sound cliche` or old fashioned, but we could all really learn a lot from our grandparents. The generation that lived through the Great Depression learned a little about everything but one thing they learned a lot about was money. In fact, they learned so much about money that a lot of them actually ended up making A LOT of it over the course of their lifetime. The Great Depression aside, there’s a pretty simple reason that most of our grandparents were/are usually pretty great with money. There is one fact about it that they knew but most of us have forgotten.

Your grandparents were smart about money, but why? It's all because of this 1 thing that they knew about money (that you don't). Not knowing is making you broke.

Now I want your promise that before you continue reading this post that you won’t throw things at your computer screen because this is so simple. In fact, it’s so simple that it has been staring you in the face everyday of your adult life. Are you ready?

You can’t spend more than you earn.

I can see you now. Palm on face yelling “REALLY?!” at your computer screen. Simmer down for a sec and let’s chat.

The #1 Thing Your Grandparents Knew About Money

We live in a society where the norm is to spend more than we earn. We do it every single day of our lives and no one thinks twice about it. The ability to do so hides within our wallets, in our desks, on our computers where it is made so easy to do that we often don’t blink and eye at it.

The ability to spend more than we earn lurks in the background of our lives in the form of a credit card, a payday loan, a personal loan or anything else that you buy on credit.

Too often we jump at the chance to take a loan or to borrow money. We basically lie to ourselves telling that inner voice that says not to do it to hush and be quite. Let’s be real for a second though. While it’s incredibly easy to say yes to borrowing that money or putting that new item on your credit card, those loans and charges are making you broke. You may only be looking to borrow $1,000 worth of whatever, but by the time that you pay interest, loan fees and more you’ve paid considerably more than that. To put it mildly? You’ve paid someone your hard earned money for the privilege of borrowing their hard earned money.


What we don’t realize is that debt adds up. Sure, it starts with a single loan, maybe a few hundred dollars, but before we know it, we’re buried under hundreds of thousands of dollars. Did you know that the average america family is more than $225,000 in debt? That’s INSANE to me! Why is it okay for us to spend more than we make? I know that I personally don’t earn even $225,000 per year. Not yet anyhow.

There are some who will say that using credit is smart. Noooo, what is smart is saving for the things you need. Instead of buying a new car on a loan, make a car payment to yourself and save yourself the financing fees and interest. It sounds hard, but when you take it down to the bare basics it really isn’t.

Instead of taking a personal loan to cover that pop up expense, build an emergency fund that will be able to handle it instead.

Instead of buying new clothing every month or year, shop your own closet to see what you may have that you’ve forgotten about.

Use what you have in your home to make extra money to spend for the things you can’t afford instead of swiping your credit card to pay for them.

If your budget isn’t working and you’re having to rely on credit? Figure out why your budget is failing.

Live simply.

The very, very simple truth about it all and the entire point of this post is simply this:

You can’t spend more than you earn. 

Stop listening to convention, stop living like everyone else, stop relying on money that you don’t have. You might just be surprised at how big the difference is in every single aspect of your life. After all, a lot of our Grandparents did.

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  1. What about those in graduate school? Serious question. 🙂 I’m worried about having to pull out loans to get the job that I want to have.

    • Lauren, if I was personally in that situation, I would try to do everything in my power to avoid it. You could cut expenses (if you can cut any further), sell things you no longer need, take a part time second job, etc. With that said, I’m also I’m also very realistic. Most people don’t have time to save years to pay cash for grad school.If you have to take a loan to get your education, if that is your last and only choice, then so be it. Just be sure that you don’t end up so far over your head that you can’t pay it back. Good Luck!

  2. While I agree with your philosophy about money… school isn’t included (nor should it be in my humble opinion). There is another school of thought, “you have to spend money to make money”. While that may have been a saying in regard to investing, school is an investment. Opening a business is an investment. Buying a house is not an investment by the way. And the debt that your grandparents didn’t have was partly because they lived with family – forever, or they physically built their own house. So, money philosophy needs to be tempered with modern reality. Having a degree that doubles your income or more over your working lifetime is a very good investment. As for student loans; you could consider working for a company that pays them in some form. But keeping with the basic philosophy, deferring interest (if it’s not waived) would be something you would try NOW to avoid. 🙂

  3. As one of eight children and a mother who stayed home to raise us,she lived by the jam jar economy , a little jar for each of the bills she had to pay. On getting our first job her advice was simple IT’S NOT WHAT YOU EARN IT’S WHAT YOU SAVE. 40 years on this has stood me in good stead. Thank You Lord for a wonderful Mother

  4. Totally agree with Hazel’s methodology. Our home is slightly different, operates on a fortnightly cash basis, bills are saved in an expenses acct, spare change kept in a jar. 1 Cr. Card $500.00 AUD Max, (w/end emergency or Pay Pal). Cr card is paid in full prior to month’s end, we simply refuse to pay interest. If I/we see something we really like, take a look @ it check the price & walk out of the store. A week later check if it’s still there, then ask for a cash discount, especially as cash “is king” 9 out of 10 times it works. If you don’t ask, you don’t know, money better in our household than a store’s profit. My Nana always said “never mind the $’s they’ll look after themselves, watch you pennies”. Which we do.

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