Suddenly, frugality is in. And there are few people more thrifty than the Amish. Thanks to their time-tested approach to personal finances, the Amish emerged largely unscathed from the economic crisis. They simply did what they’ve always done, including following these wise habits:
They live below their means. “Their whole world view is based on living below their means, never ever above their means,” says Lorilee Craker, author of the book Money Secrets of the Amish: Finding True Abundance in Simplicity, Sharing and Saving. “They like to know they have a big cushion for a rainy day.”
Lesson: Spend less than you earn — and save the rest. The key is to live a comfortable life – not a wasteful one designed to impress others.
They teach their children to be savers. Even in their teens, young Amish turn their paychecks over to their parents, who give them 10 percent for spending money and put the rest in savings (available to them when they turn 21!). It’s a lesson that apparently pays off. One man profiled in the book managed to save $400,000 on a farmer’s wage while raising 14 children!
Lesson: Certainly teach your children the value of money early on, but also do what you can to help ensure that they understand the value of thrift (e.g., they learn to share, use things to their fullest and don’t have a long list of wants).
They pay with cash or a check. That’s not to say the Amish never borrow. They do, to buy farmland and equipment, as well as to fund business opportunities – all things that will generate more income. What they don’t do is buy expensive items with those “no down payment and no interest until…” plans that are so popular at furniture and electronics stores.
Lesson: The next time you borrow for something (e.g., a new car), keep making the same monthly payment into a savings account after the loan is paid off. Do that long enough, and you’ll have the cash to make your next purchase!
They buy only what they need, not what they want. A young Amish boy may want a brand new buggy, complete with leather seats. But if what he really needs is safe, dependable transportation, he’ll probably purchase a used buggy with comfortable cloth seats at a great savings.
Lesson: Avoid falling prey to the trap of buying what you want instead of what you really need – and save money in the process.
They realize the best things in life are free. For the Amish, a night out has nothing to do with trips to a high-priced restaurant or the movie theater. A night of dominos with the family in front of the fire and a big bowl of buttered popcorn does just fine.
Lesson: Rethink recreation and opt for a hike with the family or a day at the park. Check out your community’s Parks and Recreation Department, museum or library district for family-friendly entertainment opportunities.
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