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Lentils are a healthy choice combined with rice or used numerous other ways.  Relatively inexpensive and quick cooking compared to dried beans.  Lentils can be made into loaves, patties, salads, pasta dishes, casseroles and stews.  A handful can be added to soups just as nutrition and filler.

I live in Iowa and we, thankfully, do not have to pay sales tax on food.  Soda and some junk foods are taxed but regular food items are not.  I think prescriptions also are not taxed but OTC meds are.

I do my budget by categories so when one area goes up, I know I have to look to other areas to decrease.  For instance, my utilities went up $42.50 this month.  This is a permanent increase so the budget must be adjusted.  Since I left a $25.00 cushion in the utilities category for potential increases when I did the budget, I only need to cover $17.50 of the increase by reducing other categories.  I budget $140 for groceries so that will be reduced to $130 and the other $7.50 reduction remains to be seen.  My health insurance also went up $31.21 this month but the cushion in that category should cover that increase.

I've used my budgeting format for more years than I can recall.  Last year I was within $14 of accounting for every penny and one year managed to be within $4.  I add each category each month and at the end of the year average each category to use as the basis for the next year's budget.  Assuming I get a Social Security raise, I use that amount to make a cushion for utilities and medical.  Some months I'll be way over budget in a category but averaged over the year, I usually am very close to the amount I budgeted.

I have the monthly/annual total spreadsheets going back to 2011.  That makes it easy to see what areas have increased and how much through the years.  As long as I spend less than my income I'm happy.

I am super disciplined about tracking every penny in or out but I confess that I use a Google spreadsheet.  Not 1930s! but it is very easy to use because I can open it on my phone to add anything even right in the store or in the car after and also open it on the computer for more thorough analysis or projecting a budget ahead by months.   I have data going back years now so I am sticking with it - I guess I have a 1930s habit with 21st century techniques, lol. 

Just had to also comment on lentils.  I make sloppy joes with lentils (no meat at all) frequently.  Very tasty and sloppy joe was invented in the 30s I think.  Lots of recipes on-line if anyone wants to try.  Lentils are high in protein and also cook quickly. 

Have you considered shopping at Aldi?  Their prices are much lower than those shown and their food is a clean option compared to most stores. 

I keep track of all spending but by the categories they fall under.  I use a four column ledger.  Every month I reconcile the checkbook and the budget ledger.  We live on 70 percent of our income and save or give to charity out of the rest.  This gives us much peace and we know we can cover whatever comes up.  

They do still make the frozen burgers.  I just bought some that are completely unseasoned and pure Angus beef.   They were on sale two pounds for 6.99 which is a good price for beef these days.   We grill a box or two of them all at once and store them in the freezer so that they can just be warmed back up and eaten anytime.  They taste very much like we just grilled them.  

I inherited a box of ledgers from my great grandparents but have yet to get them out and look at  them.  It will be interesting reading.  They were very well off farmers in Iowa and even had a big house in town where they lived in the winter.   

Grandma Donna Wrote, 

I would like to add that after I posted my post and read back over that I should mention that I still use my master ledger that I keep my budget.  I use my budget entries to use to try out the vintage journal budgets and I learn tips from the old budgets. I agree with Ann and Sara, I like to break mine down too so I can see what I am spending in every category.  That is why I added to the bottom of my practice horizontal the breakdown.  I have a workbook that I made resembling a 1940s budget where I added my own categories that are a bit obsessive but I want to know how much I spent in food, clothing, insurance, dog food, cat food, clothing, medical etc.  This is so I can see it all. Charles also records all payments in a journal. I am fascinated with the old diaries and journals because they tell a story.  It is just part of studying the past and history.  We all do our own way but may see something they might learn from. :)

Lana D, we do not have an Aldi here but they are suppose to be coming to our town soon.  :)

I will add to the Aldi's suggestion. In my small town they are a blessing.

I budget categories but don't break everything out. Food is a category, and pet food goes under pet expenses. Etc.

This year I got tripped up on a large increase in property taxes, we didn't get the info until about a month and a half before due. I had to do some scrambling but managed and at least I know before the fall taxes are due. I will super pad for next year.

I do enjoy learning how others do theirs. 

I do my budget a little differently.  Each year, toward the end of the year, I sit down with my checkbook and total each area of expenses then divide the total by 12 and that is the average I set down on my planning sheet for the next year's budget.  Like Ann, I often have a cushion in categories, to help offset any increases.  I find it most difficult to do that with car and house insurances as they tend to just randomly increase and you can never be sure exactly how much that will be.  

This past year, after several suggestions from some of my readers, I took the extra time to figure out how much we spent on personal care items, pet foods, paper products and cleaning products.  I then looked averaged that and set that amount aside each month as well.  My last area of budgeting is always the grocery budget, once bills, prescriptions, annual fees etc are accounted for I figure out how much we can afford to spend on groceries.   Now that we are on Social Security, we stick hard to whatever I say the budget is!  It has been easier to determine once I figured out what we spent on the personal care/pets/cleaning/paper products.  

This pay period, I went a step further and took out two weeks of grocery funds in cash, to further ensure that I am sticking hard to our budget.  Yes, if we run out of a necessity (pantry or fridge staples are necessities) I might go a little over, but I try really hard to find substitutes first and purchase only as a last resort. 

I'm new to responding but have been reading you for a long time. Thank you for this article! I love budgets and numbers and keeping track. Reading others tips and tricks keeps me motivated! I write down everything we spend and sometimes am so shocked when I tally it up at how much things have increased. We're both retired,live in a log cabin, have chickens and grow a massive garden and greenhouse in eastern Kansas. I think I will try writing my spending horizontally-never heads of that before! Again, thank you for the article

Grandpa Charles is retiring! That is so exciting. :) I can only imagine what further adventures you both will be up to with him at the city homestead all day. :) I am so happy for you both!

I am working hard on my new habits since it takes me awhile to get them set. I worked so hard on my new habits today that I ache all over! I had a very productive day but couldn't get my laundry hung until this afternoon because it rained this morning even though the forecast said it wouldn't. Usually I am done with big tasks by the afternoon and do quieter things, but today I was hanging laundry and ironing until right before time to make dinner. Whew! 

I have been very good about writing down my spending. It was surprising how much we spend on household things like vacuum bags and repeat things like that. Eggs finally jumped in price here. I had to pay $8.50 for them this time. Aldi's is a life saver. I buy my eggs from Walmart though, because I like a particular brand they carry. The trouble I run into with money is that we still need to buy things so we can save money. :) We want to do our own oil changes on the car, but we need those ramp things you drive the front of the car up onto. 

We harvested all of the garlic last Saturday. I used to harvest it in July. We got the sweet potato slips planted. We harvested the last two cabbages. The only thing left to plant is some melon seedlings, but they are waiting for the potatoes to be done. 

First I have to tell you I’ve been seeing lots of bees here- paid closer attention since you mentioned it.  I do usually notice them but forget to share that with you. 
I like seeing the budgets/ledgers.  It’s inspiring and makes me want to save more. That probably sounds funny but it sure does.  
Our meals have been pretty thrifty lately which is good.  I haven’t had time to go to the store so we just eat from what we have.  Doesn’t bother us but we are looking forward to fresh produce. 
Blessings. 

Grandma Donna wrote,

We welcome you Rebecca G to the forum. I am happy that you decided to start posting, we have a wonderful group here. :) 

The horizontal style is interesting.  I wonder, other than saving space, if it has any other advantages.

We have several grocery stores where I live so I can take advantage of loss leaders which a lot of times is fresh produce though occasionally meat or frozen items. Aldi's is usually higher for their fresh items. I find their canned goods, shelf stable items & most frozen to be a better price than the other stores. 

What I find crazy is Aldi's will have strawberries for $1 more than the loss leader strawberries across the street yet I see people putting them in their cart. Years ago I used to shop at one store & never looked at ads. Not any more. I can't always get to every store every week so I try to get to each one every couple of weeks to look for bargains.

My mother-in-law lives in the mountains about 45 minutes from a chain grocery store & Walmart. She shops at the chain. I couldn't believe the prices but they have no competition. Five years ago I visited her and went shopping with her. I saw one green pepper was over $2. I almost fainted. I didn't buy it. It took a bit of patience but I did find some mark downs.

Does anyone else shop at salvage/discount grocery stores? That is where I shop. The prices are probably half to three-fourths of the regular store price. I get sliced ham and similar boneless meat for .99 a pound. I usually pay .25 for a bottle of salad dressing, but if I want something special, it is .75. Our eggs were high, but came down to $2.99 now. If you buy 50 pounds of potatoes, you can get them for .50 a pound. I got a huge cantaloupe for $2.99 the other day. Sometimes I get milk for .50 a half gallon, or sometimes it is $1.49 for a half gallon. Every Saturday they have a cart with medicines, vitamins, supplements etc. Everything in the cart is .50! I encourage people to Google salvage grocery or discount grocery to see if there is a store near you.

I saw something on the old budget sheets that I didn't know about, so I looked it up. It was the Poll Tax. Here is what I found out about it. A poll tax is a fixed amount of money that a person had to pay in order to vote. It was not based on income, property, or employment—it was a flat fee applied to everyone, usually adults.

In the context of 1932, especially in the southern United States, poll taxes were often used as a way to restrict voting rights, particularly targeting African Americans, poor whites, and other marginalized groups. Even though the tax amount might seem small, it was enough to prevent many low-income individuals from voting.

So in a 1932 article, a "poll tax" would likely be discussed in connection with voter suppression, state laws, or civil rights issues of that era.

You learn something new every day.

Have A Great Day Y'all

Becky Sue

I am only as far as tracking what I spend and haven't got to an actual budget yet. I started to track separate food items but found I always bought pretty much the same thing so I decided to lump it all under food. I have a category for the repeat items like the laundry soap I have to buy on Friday. I filled my laundry soap container with the last bag of soap yesterday when I was doing laundry. When I use the last of something, I always buy more so that I never run out. This makes life so much easier! I buy some expensive things online, like laundry soap because they work better for me, but we live on 50% of our income, so I'm not overspending if you look at it like that. The other 50% goes to paying off the mortgage and saving, though this year it's going to paying for expensive dental work and saving. 

What I've begun to think about is what if our income gets cut? What kind of things will I use then? I thought about going for a time living like we get no income at all and what I would do then. Like Grandma Donna's going for a week without electricity to see how to do things. The country is being lulled into trusting that everything will be okay, except that the financial cracks are still there and haven't gone away. Those cracks are getting wider! 

Becky Sue K, that is so interesting about the poll tax. 

I'm curious whether not spending money in the same calendar year you earn it was ever a widespread practice.  It's something I learned from my grandparents as just the responsible thing to do, but I learned in adult life most of my friends not only don't budget that way themselves, but have never heard of doing so.  

As someone living on a very small income, it gives me a nice sense of security that my 2025 budget isn't based on money I hope to continue earning this year, but money that's already sitting in the bank from 2024.  By the time I'm making 2026's budget I'll know exactly how much I earned this year, and if it's lower than usual, I can adjust next year's spending budget at the beginning.

I don't know where my grandparents learned that practice, but I'm glad they passed it down to me from a young enough age that I grew up taking it for granted as just how money and budgeting works.

Tea S, I love that! It makes so much sense. If you're living on what you expect to earn, it's like living on credit. Living on what you already have is so much safer because you're better prepared for bumps in the road. I'm not sure how to change to that kind of living, but I'm going to give it some thought.

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It's going to be 91 today so I'm roasting some cabbage for roasted cabbage tacos for lunch while the windows are still open to let the heat out. I found a male zucchini flower this morning that I picked to chop up and add to a scrambled egg to go with my tacos. No zucchinis yet, but at least I have flowers to eat while I'm waiting. 

I had no idea you had a food tax there.  I remember my parents had to pay tax on food, but I haven't since moving to Florida, except, as Ann W said, on junk food and the like.

I've been using one of those green columnar books to record my expenses and it looks at a glance as if I just spend with abandon.  In the last two years, with the hurricanes and their painfully high deductibles, a car that needed thousands in repairs, getting set up for future hurricanes, unusual electrical and plumbing expenses, the need to replace three major appliances this past 12 months, and who knows what else I've forgotten, my monthly expenses are horrendous.  I know some of those expenses are rare, but appliances and cars will continue to break down, air conditioners will still need repair or replacement, plumbing issues will continue to happen and hurricanes will possibly, although hopefully not, still come.  It makes it hard for me to predict what I will need once I retire.  I have a lot of categories in my ledger so I can see more clearly where and how much I spend. For instance, I have a yard and garden category that is separate from the mowing category, because I have to pay a mower to cut and trim my lawn, but I do most of the rest of my yard work, so that category is separate.

I'm following this 1930's study not so much in actual practice but as a way to plan ahead to cut expenses.  I know I can save money being at home, but can I save enough to make up for the loss of a paycheck?  That's my goal, to spend very carefully and wisely, simplify my life, cut out extras that I can still cut without making myself miserable and to find the joy in living simply.  That's why I'm here!  I love these studies.  

p.s. Lentils and rice with spices and clarified butter are a delicious Indian dish, the name of which I forget at the moment.  I understand the combination makes a complete protein.  One thing that more than one of my doctors has cautioned me about is that older people can easily become deficient in protein.  

Add me to the list of people that's never heard of the one year money method!  It's really a great idea, best started young.  It would take years for us to change at this point, but we don't have years!!  But I'll definitely keep it in mind as a possible way to go into retirement.  Thanks for sharing that!!

Joan-  Before I quit my job, we practiced living solely on my husband's pay.  It was also good to save that money, although I did splurge on a Kitchen Aid mixer as my final working reward!  I truly thought we would suffer, but I haven't worked outside the house since.  Life improved dramatically.  We dropped to one car.  Huge.  And there are so many things that you can stop paying for.  Work clothes, shoes, gas, etc.  Even 25 years later, I can't remember the last time I bought shoes!!  Or socks.  Your situation might be entirely different, but it works well for us.  Now, if you catch a bus, wear a work uniform, they feed you, etc....  and yes, my friend works at a place like that!  

I have never kept a expense log but am very disciplined as to where I spend money. I find a lot of things I need curb picking (found 3 sets of like new curtain rods w/ finials last month). I got a used storm door on Craigslist. Hubby had to order a new lock mortise for 25$ to fix it though.

It is a blessing your husband can retire. I wondered if the property he inherited from his mother would help during retirement. In the past, you blogged about fixing the place up and cleaning it out. Madge's former home looked nice after the reno. I wondered if the two of you decided to rent it out or sell it. You worked very hard to take care of your MIL during her last days and your husband is a saint. Actually, both of you still work hard! 

I have used budgeting software for decades now, the first one I can’t remember, then Quicken for many years, and finally I’ve used YNAB for going on 20 years now.  In the mid-90s I learned about having a “freedom account” where you add money each month for your annual and biannual expenses.  In 2018 we decided to do everything we could to be able to live each month on the money earned the month before, and made that happen, which was an incredible game changer for us.  At that point we didn’t have credit card debt but we did have vehicle and house debt — now we are completely debt free!  Those two principles — saving each month for annual/biannual expenses and budgeting each month with the money earned the month before transformed our finances.

In 2025 I decided to simplify our spending plan (aka budget).  At the end of each month I budget the money earned that month into two categories for the next month: spending and saving.  Half goes into spending, half into savings, and my goal is always to have money left in “transactions” to transfer to savings.  Those annual and biannual expenses come out of transactions, major expenses come out of savings.  It isn’t perfect, sometimes we need to move money from savings to spending, but doing it this way we have to stop and think about why that is and talk about our spending.  Using software, I can still go through and see everything spent at specific stores.  This has been a gradual change for me, someone who used to budget for and categorize different types of groceries like produce, bulk goods, etc.  But my budget was too complicated for my husband to be able to participate in the finances, and also, as we improved our finances the strict categories became less necessary (the fact that I use level pay plans for natural gas and electric is a big help in smoothing out monthly expenses).  But for the most part now, we live on about half of my husband’s take home pay, something I couldn’t have imagined a decade ago.  The money going into savings is an emergency fund and also intended to cover the major home improvements we intend to complete before retirement.

Aldi is the least expensive grocery store where I live, but I rarely shop there.  I realized the difference wasn’t so much compared to the regional chain supermarket, but those employees have a union and benefits.  I decided I could make changes to what we eat to cover the differences.  We also shop at Costco, Trader Joe’s, and the health food store (for bulk items and milk in glass).  I am the only one in the family who eats meat (for health reasons), so that helps keep the grocery spending lower.  I’ve significantly cut the “meat analog” products I was buying for the guys, mostly using TVP now (GMO free bought in bulk at the health food store).  A bag of vegan meatballs is $4 at Trader Joe’s, 1.5 cups of TVP costs $1.15, and the TVP adds a little more protein to the pot of spaghetti, while avoiding the caramel color and methyl cellulose added to the TJs version).  It’s still more processed than I like, but they are happy with it.  So now I buy them veggie burgers to have in the freezer as a quick meal, but by and large I use TVP in their meals (tacos, burritos, chili, pasta, etc.) along with a lot of beans and legumes (which I can’t eat).

We eat the basics when it comes to produce, and only in season or the produce that is inexpensive year round.  We’re always looking for ways to make things easier and less expensive.  My husband no longer puts cucumber in the salads he makes, he found he prefers apple (whatever apples we find cheapest).  So his salads have lettuce, carrots, tomatoes, and apple.  Organic cucumbers are expensive, conventional cucumbers need to be peeled and seeded, and no matter what, not growing them ourselves there is always the risk of bitter cucumbers.  Apples also keep longer in the fridge and we had been losing cucumbers to rot.  I never buy asparagus and almost never buy fresh blueberries or blackberries (there has to be an exceptional sale)

I've not heard of doing it by the year, but You Need a Budget (YNAB) as Kimberly F., mentions, has you live on last month's income.  I find it hard to get a month in the bank ahead so that I can live on that instead of the current month, much less a year!  

Debby B: I have to drive to work and it's a long commute, so I know I will be saving gas money there.  My work provides shirts with logos and I buy my slacks and shoes second hand, so I won't be saving much there.  I have a capsule work wardrobe and I'm not interested in ordering more, even though my work will pay for them, since I have less than a year to still work. I'm already down to one car and the house is paid for, but my SS will be less than my salary for sure - I never made a lot of money and took time out from working when I had babies and when I went back to college.  I think I will be okay, but there are a lot of unknowns and possible new expenses.  At least a lower income should help me continue to get 100% patient assistance for my medication:  the one I take every 8 weeks (6 times a year) is, last I saw, $30,000 a dose.  Not per year, per dose.  If it wasn't for the patient assistance, I just couldn't afford it.  

I am paying close attention to GDonna's and everyone's tips!

I like the idea of using last year's income for the current budget. If your income happens to increase you have a cushion for savings or emergencies automatically. 

Unfortunately,  I know too many people who claim to plan or budget. But what they do is assume next year's income will increase.  They also assume they'll sell their big house and live off the income in retirement. 

In regard to living on last year's income, I think if you base next year's budget on the prior year's income you would basically be doing that.  

Since I'm on Social Security, my income does not increase much after the Medicare premium increase, so I use that small increase as a buffer for utilities and health expenses.  Last year my utilities did not increase significantly so I continued the same buffer for this year which was not sufficient to cover increases.   

Medical has worked because I've been blessed with several years of good health.  My largest medical expenses are health insurance premiums, deductibles, dental and eyeglasses.   I budget $350 per month for medical and last year I averaged $232.63 monthly so well under budget.  However, any medical issue can quickly wipe out the buffer in that area.  

I've simplified my budget categories to auto, clothing, food, housing, medical, miscellaneous, savings, tithe and utilities.  Auto includes car repairs, gas, oil changes, insurance and car license.  Food is obvious but I do include some household things there but it's mostly food.  Medical includes insurance and everything else medical including some items that are not tax deductible but medically necessary.  Housing includes property taxes, insurance, household repairs/maintenance, mowing, snow removal.  Savings is anything not used in other categories during the month which would be similar to the "freedom account" Kimberly F mentioned.   I have three utility bills electric/gas, water/sewer/trash and telephone/internet.  

I used to have more categories but simplified down to the ones mentioned and miscellaneous catches everything else.  I budget $230 for miscellaneous and last year's average was $185.31.  So far this year I've averaged $203.09 per month.  This category includes household supplies, gardening supplies/seeds/etc., eating out (seldom), gifts, stamps, books plus much more.  I put my Pepsi in miscellaneous as it's not "food" it's a luxury.  

I also removed insurance as a category as I thought putting car, household and medical insurance into those categories makes more sense.  My life insurance is paid by dividends, so no category is needed for that.

I do all my record keeping on paper.  I find when I have to write down each item, I'm paying more attention to expenses.  I did so much computer bookkeeping at work and when I used the computer at home, I wasn't registering or personalizing or whatever as I do when handwriting everything.  

I like the columns for keeping spending records.  It might use more paper, but I can read it easier.  I like Tea's yearly budget, but I don't think we could ever bank a whole year's income to be able to spend it the next.

When buying ramps to put your car up for an oil change consisted how low your car is to the ground.  We bought ramps for a car we had and still could not get the car up because the front was too low to the ground.  The car doesn't start to go up until the tires get to the ramps.

It was hard to get a month ahead in our expenses!  Once we managed it the difficulty became keeping the mindset that the money in the bank has nothing to do with the budget number — my husband had to learn to look at the budget and categories.  YNAB works like an electronic envelope system in that each category has an amount assigned to it and if you overspend you have to take money from another category to cover it, just like you would with envelopes.  Being a month ahead makes it look like you have a lot of money, but really it’s there for the next month — you have to be disciplined.  This also works as a small emergency cushion.  With YNAB, the recommend you budget with previously earned money only, even if that means making out your budget once a week after you get paid.  These methods work for us but everyone is different and I know people who work best with absolute cash in their hands and nothing else, because credit cards are too easy to get in trouble with.

I used paper to budget when we were newly married, and of course there was always more month than money, as they say.  We could cover the basics of living like rent, car payment, groceries, gas, and utilities, but anything else was pretty much an emergency, hence needing to learn to budget monthly for the annual expenses.  We learned that even if it looked like we had $20 to eat a meal or two out that month, in reality we needed that $20 to go toward the biannual car insurance and annual car registration.  Smog inspections were our downfall in the early years.  I understand their need, but they are a burden on the poor, pushing the responsibility for air pollution reduction on those who can’t afford it rather than the big polluting companies.  Poorer people drive older cars which are more likely to fail the smog inspections.  This happened to use and of course we didn’t have the cash to make the repairs.  We ended up with a Sears credit card to pay the automotive bill, at high interest, of course.  More affluent people drive newer cars which pass smog easily.  Overall it isn’t as big a deal now as it was back in the late 1980s — my youngest drives a 17 year old Prius and it passed smog in April just fine, whereas my 7 year old car in 1989 couldn’t pass smog.

I forgot to say we we are working on living on half our income because we want my husband to retire and our income will be at most half of what we have now, and out of that we will have to cover healthcare until we are each old enough for Medicare.  My main medication is a bargain compared to the medication Joan S. requires, at just $11,500 per dose (every 8 weeks also) although my doctor has twice now mentioned changing to a newer medication to get into full remission, which is $24,000 per dose and will start every 4 weeks.  I also get patient assistance, but that is based on having private insurance and I imagine it would be harder if we are using the ACA for health coverage.  It is very difficult, I would like my husband to be able to retire but he thinks he may have to hang on just to keep me insured, especially if there are changes to the ACA.  I never realized before how expensive healthcare is for retired persons, even with Medicare.  It is a major expense of retirement

Am I understanding Tea's example correctly? I understood it to mean budget for the current year as if you were receiving last year's income. In other words, don't do the current year's budget based on any income increase (raise, new job, etc) in the current year even if you do get that increase.

I reread it and I do think it means spending in the current year what you made in the previous year!  I can hardly imagine many people being able to manage such a feat.  If I weren’t trying to save money and was only thinking about monthly expenses, I could make it work because we do have more than 12 months living expenses saved now that we’ve been living on half the income for more than a year.  We are doing this because we will have to cover living expenses between when my husband retires and when he can access his retirement funds if we retires before 59 1/2 — it was a natural extension of having 3-6 months living expenses saved and learning to live on a smaller income.  But I can’t imagine having been able to do this before we got to this place in our lives, closer to retirement with every debt paid including the mortgage and vehicles

Margaret P. and Kimberly F.,

I do mean the literal money earned the previous year.  As in, having a separate bank account for all "incoming" money, that's not to be touched until January 1st of the following year, at which point I see how much I have in that account, and divide it up into various funds for spending over the coming year and for long-term savings.

I've been using this method my entire life, so when I got my first real job at 17 (and wasn't supporting myself yet) I didn't touch any of the money earned in the first year, and have kept a year ahead ever since.  So I never had to come up with an extra year's worth of money while simultaneously covering the normal expenses of adulthood.  I don't think switching to this method as an adult (especially if money is already tight) would be an easy feat.

Too bad my grandparents are no longer around to ask, because this conversation has me wondering how and when they first started. I'm thinking if anything it would have come from my grandpa's side, but it was my grandma who handled their budget and seemed to really preach this to the rest of the family.  Even when I was little, I remember getting birthday money from Grandma and she would always admonish me not to spend it until after New Year's (my birthday is in July, oh the wait!)

I've been thinking about Tea S's idea. It's like a trousseau. Before marriage, people would collect the things they need. This is like a money trousseau. Ideally you would start out with money in the bank. Because we are a modern world where we are told that all we have to do is trust in an income, we ignore that something could happen to that income. That's been my mistake. I believed that all we needed to do is rely on an income. That's why we put most of our savings in investments. This is wrong, wrong, wrong! We need liquid savings to live on. We should have had liquid savings before trying to pay off the mortgage. Because of our mistakes, our savings are tied up and our house is only part-way paid, and with all that money used, we are still not in a position to handle no income! And even Social Security benefits are scheduled to get cut in a few years, so who knows how long those benefits will last? 

We should have prepared a money trousseau first. Now I'm going to go think about how to create a money trousseau. 

Karen S, I am glad your son is better. 

Debbie B, thank you for the movie recommendation. I'll watch it this Saturday and give you a report.

CindyD W, thank you for the tips on the car ramps. 

Tea, thank you for the clarification.  

It would be hard but not neccesarily impossible to save that much and then do as you describe. I think you would have to save for a number of years and once you had a sum equal to your income you could start this method.

My husband lost his job many years ago. We had 2 years income saved in the bank. We used it all as it took 2 years to find another job. So we had to start again. But we did it. 

Prepper Princess on YouTube talks about how she lives below the poverty line but I get the impression she has a large sum saved. Not everything she does is practical especially for families but I like that she questions conventional wisdom on what one must buy or have.

I chuckled when watching a YouTube video and the influencer suggested having one day a week as "no-buy"! I usually only have 1 "buy" day (when I grocery shop & get gas). I think though the no-buy refers to wants not needs.

I've finished thinking about Tea S's idea. What's being done is saving one year's income to begin life with, and then increasing that amount as income increases. I really like the mindset that sees the importance of having the money first before any spending is done. Tea S had smart grandparents. :) Since I didn't start adult life this way and my husband isn't making first year wages anymore, I think a good place to start is with one year's expenses instead of wages. For us, that's $30,000. We could add to that number until we got to his income. I don't think it would be necessary to use that money instead of his weekly paychecks. It just needs to be in the bank. I think it's an excellent number to use for saving liquid assets. 

Grandma Donna wrote,

Oh what interesting conversations going on here with the budget and very good information.  

Tea S, if all of our parents or grandparents would have taught us this budget of spending money earned the previous year and saving this  years money for next year, we would be in a much better financial position.  Having a whole year or half year to think about what we want to spend that birthday money on would most likely lead to a sound purchase. :)  I have never heard of this type of budget, I sure wish I had.  Donna

Growing up in the 1960s/70s we were told to save,save,save to grow the economy then in the 1980s + we've been told to spend ,spend,spend to grow the economy!! All year " sales" now which aren't sales. Even supermarkets here have 3 day "sales" before holiday weekends. One person told me how wonderful. I told them it's a ploy yo get you to spend on things you probably don't regularly buy. People are being brainwashed.

People have gone from saving and waiting to purchase things to credit cards and instant gratification.

Now cashless economies are being encouraged but when a disaster happens businesses can't use technology so they then want cash.

No wonder people are confused and in debt. When we became debt free I felt like throwing a party hahaha... But that would have cost money :-)

Karen NZ

I found the horizontal way of budgeting interesting, I had not seen that before. But for me, I will keep to vertical columns. My brain retains it better that way. But I think that is the beauty of all these different systems, everyone can choose what works best for them. 

It is fun and interesting to see what was spent years ago and how they lived. It always inspires me to do better, when I read a post like this. It's the "nudge" I need. Thanks!

Stephanie G, I agree that it’s mostly semantics for people with steady income.  If we have a year’s income in savings, it doesn’t really matter if we are spending that and saving this year’s paychecks, or the other way around, unless a person has variable income.  In that case, I think Tea’s grandparents had the right idea!  Right now we are between one year’s expenses and one year’s income saved, but by the end of the year it should be a full year’s income.  Of course, once we retire we will be living on all the saved income for the rest of our lives!  Good thing we started that 401k in our 20s and have frugal skills as well.

Like you, however, we spent most of our adult lives putting money into retirement and not anything liquid.  We changed our financial plan in 2018 to make up for that, first working to pay off vehicle debt, then the house, and now to build the liquid savings (all while paying for 2 kids to go to college).  I’ve read it’s even more important in retirement to have 1-2 years of living expenses saved up, so you don’t have to pull from a down market just for your living expenses.  Also I read that if the market is good, when you take your distributions for the year, you should go to the top of your current tax bracket as a tax strategy for the future.  That money you don’t need for living can go into the liquid savings or CDs.

The word “trousseau” took me back in time!  When I was growing up, however, my mother only used it to mean the lingerie I would need when I got married.  All the household things would come from a bridal shower (as did the lingerie).  I recently reread These Happy Golden Years by Laura Ingalls Wilder, and of course she didn’t have a bridal shower.  She sewed the linens she would need as part of her trousseau, using their new sewing machine to seam the fabric down the middle for the sheets, rather than sewing them by hand.  Her mother gifted her down pillows and a red checked table cloth, and sent her with the quilt she had pieced as a child.  Pa gave her a milk cow!  I was especially taken with her good friend Ida gifting her a triangular white silk lace fichu, and Ma remarking how it would serve Laura well her entire life!

Karen, Once upon a time even using lay away was frowned upon as a means of acquiring things one might need.  It was seen as a form of credit though there was no interest penalty involved.  And you are quite right, we were told to save, save, save and then economists said the issue was that we were saving and not spending and urged everyone to buy buy buy. 

The sorriest excuse I've heard yet was in the past decade when a government official said, "We have to borrow the money to pay our bills!"   No.  Backwards thinking!!

Kimberly F, that's a good tip about keeping two years of income in savings when you retire. I hadn't heard that before. I had already decided that two year's income would be best to save for. In the summer the quarterly financial reports will be out for my husband's industry, and I'll be very interested to see if things are worse or better. If he loses his job, it will take some time for the industry to turn around, and two years income would make me feel safer. Now I just have to find it! As far as long-term planning, Social Security will be cut by 23% in 2033, and if we have a national debt crisis before that, it could be cut more. I don't know what people who rely on it are going to do. I am trying to work more charity into my budget. It's hard to know how much will be there for retirement. I hope we go to 1933 in January, because that was one of the worst years of the Great Depression, and it will give me time to practice new habits for more saving. :)

I remember growing up how scarce it was got people to have a major credit card, although they did have store cards.  Grocery stores didn’t take credit cards, and neither did utility companies, so at least people couldn’t go into debt for the basics of living.  Cash advances didn’t exist

My own parents got into credit card trouble (store cards) and ended up with charge offs, which impacted their credit ratings even without a bankruptcy.  After that the counseled us to stay far away from credit cards.  We didn’t listen — my husband’s mother advocated for their use and even helped him get a store card at 18.  Eventually my parents got in credit card trouble again when I was an adult.  It’s so easy for them to get out of hand.

I had 3 sets of grandparents.  One was all about buying things on credit.  The other two didn’t — my mother’s parents never had any debt at all, even choosing to never own a house or car.  My other grandparents were the ones to set a frugal example I could learn from eventually.  They did use layaway in the 1970s and 1980s.

It's interesting to me how people go into debt using credit cards.  I can understand somewhat having that happen in an extreme emergency like needing to travel to an ailing or dying parent. My brother accrued $20,000 in debt on his card that he eventually paid off. I'm not really sure what he spent it on! My mother years ago had a co- worker who owed $8000 on her cards and yet charged a big trip to London because she thought her daughter deserved it for graduation.  

I've always paid off my cards every month. I've never understood the temptation to charge something I didn't already have the money for. For me it's a convenience not to have to go to the bank and get cash. Plus I get points. 

Now I'm curious...Who here was raised by POST depression era parents, in the heyday of the post WWII era.  And what was your parent's attitudes compared to your grandparents.  My grandparents all grew up on farms on in rural areas and while some had family land they were hardly rich or wealthy.  My grandmother grew up very poor indeed in a single parent home.  But I grew up with all of the grandparents living frugally and taking care to pay off any debt before they acquired more debt.  

My parents, on the other hand, traded cars every three years, bought rooms of new furniture at a time, went on vacations twice a year and yes used credit cards.  They also had unpaid bills, creditors calling and filed for bankruptcy.  That did not change their ways.  

We live more like my grandparents.  We try our best to avoid debt.  We double down and pay it off if we ever do find it necessary to go into debt.  

So long question shortened, who finds themselves living more like grandparents than their parents in this frugal lifestyle? 

Terri C. You are correct that is a pretty sorry excuse to borrow money to pay bills. People don't think if where that money will come from. So.much Govt spending is unnecessary and out of control no matter which country you live in.

I got a new exercise book I had and ruled it into only 3 categories. Food, Non Food ( for supermarket shopping) and Other for as anything else brought such as clothing or a replacement kitchen appliance . Whatever isn't brought at a good store. Simple and easy. At the end of each month I will add each column up to see how I did. I've also put an asterisk with the words Not Essential besides it and that is used when I review my shop and realize what I brought that I could have made at home eg a packet of cookies ( biscuits here) THAT will be interesting and a great way to halt any spending leakage.

Stephanie G...is the Social Security being cut to save the Country money?? How will the elderly manage? If it happens in the USA eventually it will happen here too. Thank you for that information.

My mother used layby and also had store cards that I also had the same as her 40 years ago. Such a silly thing and I never replaced them.once i paid them off. My husband and I had Credit Cards for years but never fell behind in payments and they also were disposed of. Oh the freedom we felt.

Great question Terri C.. mother never talked about childhood going through Great Depression or as a teenager going through WW2 but she wouldn't make do and had to have the latest and best of everything to the point of getting her husband into debt!! When I married I had no idea and spent the first months wage at a grocery store that delivered rurally as I could not drive. I brought exactly the same as my mother had. That was a huge eye opener and needless to say I chose to become very frugal very quickly.

Cannot really speak of grandparents as I was young when 3 of them passed.BUT the 4th my Nana did leave an impression on me when she took me to a vegetable farm to get her supplies and introduced me to red onions that she always used. She also had shelves of preserved food. And she lived where there was no store. In  my minds eye I can still see the kitchen where I spent many happy hours with her. I was adopted and she was the only one on the paternal side who was accepting of me. Her name was Ruby Ellen. 

  Me!!   I don't think I'm a good test case though.  I lived with my grands for several years.  My parents were fools with money.  My grands lived simply, but paid cash for everything.   So much of my grands rubbed off on me that I always assumed I was more like them.  Quiet house, hate TV, etc.  I was always prepared and organized like my grandma, my mom was always frantic and a mess haha.  I was only 8 when I had to tell my mom that she couldn't pack my suitcase for camp anymore!!  She did it in such a hurry that she forgot my shorts, my bathing suit, and my jammies!  I was making detailed lists by the time I was 9.

Oh, the difference between the two lol.

Karen S, no, it's because its present means of funding will run out then. Not completely out, but enough that everyone will have to take a cut in benefits. Many people get Social Security who don't need it. It's the people who live on it that I'm worried about, and middle people like my husband and I who could use it during retirement. I don't know if we could save enough by ourselves for our whole retirement. We could use the extra money from Social Security then. Hopefully it will be there. 

With all this talk about budgeting, I wondered if anyone else's parents said they couldn't do whatever financially because they didn't want to end up in the "poor house." We didn't know much about the poor house, but we knew it was a much dreaded place where you could end up if you weren't financially responsible. The threat was always there that if you acted irresponsibly, you could end up in the poorhouse. By the time I was 5 or 6 years old, I started my first business. I bought one of those red metal looms and I made potholders. Then I went door to door selling them all by myself. Even though I was so young when I got the money for the potholders, I didn't spend it on frivolous things. I always figured out how much money I had to put back into the business before I bought a treat for myself. I didn't want my business to fail, and then maybe I'd end up in the poor house.  The information my mother gave about the poorhouse was very vague, so I didn't know if kids could end up there or if it was something that only happened to adults. I suppose my mother told us about the poor house because she probably heard it often as a child, since she was raised during the Great Depression. She might have even known people who ended up in the poorhouse. Actually though, by the time I was being raised in the 1960s, the poor houses were probably a thing of the past for the most part. I attached a picture of a poor house that is still standing in Houston, MO, near where I live.

One time, my parents bought a bunch of stuff on credit. I don't know why they did that, as my Dad wasn't generally that type of person. I think my Dad lost his job after they bought all that stuff because I remember creditors coming to the house. My mother always sent me to the door to talk to them. I was supposed to tell them she wasn't home, so I would say, "My mother says I should tell you she isn't home." Anyhow, back then, they would take the stuff back if you didn't pay for it. I clearly remember the day they came and took the stuff back. It was a Saturday morning, and we were watching cartoons on a little black and white TV in the kitchen. The man walked in and didn't say a word to us kids. He just walked over to the TV and unplugged it, and took it away along with the furniture and everything else they bought on credit. However, my Dad refused to unlock their bedroom door, so my parents didn't lose their bed. After that, my Dad was much more leery of buying anything on credit.

There is one important thing to remember when putting aside one- or two-years income to carry you through unemployment and that's health insurance.  If you lose a job, you will either have to start paying COBRA premiums which are generally quite high or find your own insurance policy which is also quite expensive and difficult if you have pre-existing issues.  If you retire and qualify for Medicare, you will have that premium plus supplemental policy and prescription policy premiums.  Also, Medicare does not pay for eyeglasses or dental.  If you plan your year's income based on typical expenses, you'll fall short due to medical.

Your savings can evaporate quickly when you run into medical expenses so be sure to add an additional amount to your planned savings.

When my late dh first became disabled, we lost 2/3's of our income and had to start paying $750 monthly for COBRA (much higher now I'm sure).  It was not a choice because dh needed major surgery.  After 18 months COBRA ended, and we each had to get a policy because his pre-existing premiums were much higher, and it was less expensive for me to have a separate policy.  

One cannot possibly foresee all of the potential financial landmines in our future, but we should try to plan for all those that we are aware of as best as we can.

Becky Sue K.

Interesting you should mention the "Poor House" When researching my family history last year.. I was 64... I discovered that my great great great grandmother had 3 illegitimate children ( one being my great great grandfather) and her and the children ended up in a Work house in England where her and 2 of her children subsequently died. My great great grandfather was rescued from the Workhouse and raised by a benefactor and then emigrated to New Zealand and made a really good life for himself and his family. He received great recognition in the town where he began the first Fire Service and had a carriers business. Him and my ggg grandmother had 15 children.

I felt deeply saddened for his mother. Her family were paupers so couldn't help her.

Karen NZ

Ann W That's a good reminder about health insurance costs, but I'm not sure buying insurance would be worth it for a temporary period. The premiums would be much higher than the medical services we would need. It's the dental insurance we would hate to lose but would, and we wouldn't buy a dental policy outside of employment either. But thank you for the reminder, and I'll make sure that one annual medical visit and two teeth cleanings, and annual vaccines for each person are included in my expenses number. I think they are, but I'll check and add them if they aren't.

Isn't this type of budgeting like the emergency fund Dave Ramsey advocates? However, he says have at least 3 months of living expenses available in case you need it. I have always had an emergency fund. That is life. Unexpected expenses always occur. IMHO living "paycheck to paycheck" is foolish. People are surprised or dismayed when the fridge goes out or a car needs to be replaced. You plan for this.

When it comes specifically to using an emergency fund to cover living expenses if you lose your job, I guess it would be functionally the same. There's admittedly no practical purpose for depositing a paycheck in one account, then turning around and pulling the same amount out of a different account to cover bills for the month. 

For me, though, I think doing it this way makes a psychological difference, and helps me be more disciplined with money in general.  Having everything I earned in the past year in one place gives me a feeling of accomplishment, and makes deciding how to divide it up fun. 

I do also want to stress that this method is in addition to, and not in place of, an emergency fund and other types of savings.  I don't even think of my "incoming" account as savings, because it's money that won't be allocated anywhere (spending/saving/investing) until the start of next year.  I act like I don't even have it until then.  So an unexpected expense like needing a new (used) car sooner than planned, major appliance breakdown, or veterinary emergency, comes out of a dedicated emergency fund.  It doesn't get borrowed from money meant for next year.  And when doing the budget each year, I try to add a certain amount to the emergency fund whether I have used any over the previous year or not.  Sometimes that's growing it, other times that's just slowly topping it back up after a big expense.