My dad was frequently unemployed while I was growing up. When he had a job as a software salesman, things were pretty bountiful in our household: We’d go on vacation, build a playhouse, have another sibling join the family, etc. But it always seemed that right after we’d get used to living in “boom times,” he’d get laid off. And since my mom chose to stay home and homeschool us, there wasn’t money coming in when my dad wasn’t working. During these times, we had to do without cable, allowance, dance class, and other small indulgences.
If my memory serves me well, this was more often than not—but if there is one special talent my mom has, it’s making things work, especially in terms of budgeting. I’m sure some bills didn’t get paid on time, but somehow there was always food on the table, clothes on our backs, and we never once had to “skip” Christmas.
I recently asked her how she managed to do it, and she revealed her best savings trick: When things were good, my mom would take small, unnoticeable amounts in cash back when she used her credit or debit card, “squirreling” it away for when times weren’t great. On her big shopping trips when she’d spend more than $100 on the family of five, she’d add an extra $20 to the total and then tuck it into an envelope. If she was spending $20 on cold medicine at the pharmacy, she’d tack on an extra $5. It was never enough to break the budget—but it was definitely enough to build a small, but noticeable, nest egg.
Did her trick involve a small amount of financial infidelity? Yes, but that’s besides the point. The most important part was that it helped stretch our family through long periods of my dad’s unemployment.
Now, granted, this wasn’t her method for retirement savings, but it was a smart way to stash away some money. It’s very similar to Marie Campagna Franklin’s $5 savings method, where she puts every $5 she comes across in an envelope and claims to have saved $42K over the years.
I am not sure how much money my mom has saved over the years with her method, but it was definitely the key to making ends meet (and the way I’m going to be able to save that little bit of extra cash for my vacation this April!).