My mother, the family budget expert

For decades, my mother, Julie, was a Certified Financial Planner.™ She loves being retired, but every now and then she’ll accept an invitation for a day or two to do some consulting work. As I write this column, I’m sitting in the back of a classroom in northwest Illinois while she leads a seminar on managing household expenses for a group of employees a public administration building.

We all know that a key component of personal financial success is to live within your means — in other words, spend less money than you take in. That’s simple enough, right? Ha! Tell that to a family of five on a moderate income with one kid needing braces, one kid outgrowing shoes purchased a month ago, and one kid who’s asking for an iPad for their birthday.

Mom gets that, having raised a family herself. She was both a good career financial planner and a good budgeter for our family of four on a moderate income. I’m biased, of course, but for budgeting advice, one can’t do better than my mom. (It’s Mother’s Day. Of course I’m going to write something nice about her.)

I’m not a participant in this seminar, just a spectator. My decision to accompany her is little more than her having said “Wanna go?” and my thinking that it would be a little more stimulating than wilting inside my condo. But I’ve got letters to the editor to review and the next great American newspaper column to write, so I log in on my computer and don’t look up until I hear her tell the group about how I’d bragged in the car on the way about how I’d gotten our lunch at McDonald’s for 30% off the regular price.

“33 percent!” I corrected her from the back of the room. I had indeed bragged about that not 90 minutes earlier. I had used the smartphone app that always seems to have some sort of deal on it and ended up getting lunch for the both of us for just over 10 dollars. It’s a habit of mine, to always be on the lookout for a deal for things I know I’m going to buy.

My habit makes a rather suitable anecdote for her seminar as she talks about how habits of thrift can add up to make a big difference to one’s bank account. After all, she’s the one who taught me to find and use a deal whenever possible.

The anecdotes keep rolling as she talks about the typical household budget, exploring the fixed components such as rent or mortgage payments, utilities, groceries — all those expenses that will always be there but shouldn’t exceed a certain percentage of our overall budget.

“I always run my dishwasher after 8 p.m.,” she tells the group. “If I don’t have to use an appliance during the day, I’ll wait until the evening because the electricity costs so much less after hours. Check with your utility companies about a billing plan with reduced after-hours rates, and that’s one way you can really reduce your energy bills.”

I look up from my computer and see several participants in the group writing in their notebooks. As they jot notes to themselves to look up off-peak energy discounts my thoughts wander off to the time my mother told me she was making a summertime family rule that we could not turn on the air conditioner before 8 p.m. unless it was 85 degrees or warmer. There were a number of evenings in the summer when the four Coles would eat supper together at an old table in our basement where the ambient temperature was cooler. Summertime meals were some type of meat on the grill, paired with a handful of potato chips and cutup apple slices or carrot sticks with chive dip.

My thoughts are interrupted by the next anecdote that triggers my memory. “Whenever my kids would ask me what we were gonna have for dinner,” she tells the seminar group, “I would always tell them, ‘Whatever’s on sale.’”

She’s not kidding. Rarely did I ever see my mother buy meat that she first hadn’t seen in the store ad for a sale price. By the time I was in junior high, I would snatch the Fareway ad out of the Penny Saver before Mom even arrived home from work to see what we might get to eat that weekend.

For most of my childhood, I thought we were poor. I chuckle at that now. I remember so vividly the first time I ordered a steak at a restaurant at the age of 14. It wasn’t the first time I’d ever eaten steak — it was just the first time I was bold enough to expect that my parents pay an astounding $13.99 for eight ounces of it (cooked medium-rare, like God intended.)

But poor families don’t actually eat pork chops and barbecue ribs and pot roasts and shrimp scampi as often as we did. Poor kids don’t pick steak as their chosen meal for the extended family get-together celebrating their tenth birthday. I only thought we poor. I never actually felt that way. I had to be told the scandalous truth — that my parents had a few bucks to their name — when I was about 13 and made some comment about the “rich kids” at my school whose parents could afford to buy them expensive stuff.

“If we weren’t saving our money to last for the rest of our lives, we could buy all of the same things those other kids’ families are buying,” Mom told me.

“Are the rich kids’ families saving any money?” I replied.

“Judging by the big houses they’re building, probably not,” she said. “When your father and I bought our house, the bank told us that we were qualified to borrow a lot more and buy a bigger house. I had to make it clear to them that I would not take out the maximum loan amount because I wanted to save and invest what would have otherwise gone toward a bigger mortgage payment.” It was my first real-world glimpse into what it meant to truly live within one’s means.

Mom maintains that philosophy with the participants at her seminar: Unless your credit score prohibits it, buy a house, don’t rent. Build equity. Don’t max out your loan amount just because you qualify for it. Fitting a higher monthly payment into your budget is not necessarily the same as being able to afford what you’ve purchased, be it your house or your vehicle.

After going over the “fixed” expenses that take up a budget, Mom moves on to the “controllable” part of a household budget: things like vacations, leisure activities, and technological gadgets — all things that can railroad a budget and reduce one’s savings without them even realizing it.

“When my son was about 10, he complained to me one day that he was the only kid in his whole class who didn’t have a Game Boy,” she tells the group. Buying my brother the coveted 1998 handheld video game would not have broken the bank. Nevertheless, she set the condition that he would have to earn the money and purchase a Game Boy himself.

My 10-year-old brother saved up enough money that year to purchase a blue Game Boy Pocket and a kit of rechargeable AAA batteries. It was one of his most prized possessions. It was also the only video game system he ever owned.

The participants start chiming in with their own ideas for managing controllable expenses. “My husband and I did the math and found out that one night at the movies for our family with popcorn and drinks costs more than a whole year of Netflix, one woman says. “So now the basement is our movie theater.”

Another participant mentions an online banking service that tracks monthly subscription charges and periodically reminds the accountholder what they’re paying. “I thought I was saving money by cutting cable, but all the streaming services were costing me a fortune!”

For the seminar participants, the last hour has been a helpful how-to and exchange of ideas. For me, it’s a debriefing of sorts — a summary of every small decision my mother made day in and day out with an end goal of lifelong financial freedom for our family.

Her decisions yielded some pretty good results. My parents have a nice life as retirees. They go on long vacations to a warm climate every winter and have season tickets to Cyclone football games.

My brother Rob has a good job in the accounting field and owns a nice house near a country club here in town. He’s not much into video game systems. Today, he splurges on things like a Blackstone outdoor griddle — if he can find one for a good deal.

As for me, well, journalism is no way to get rich, but I own a happy little condo in Cedar Rapids that my parents helped me remodel. Like my mother, I’ll know what I’m going to eat this week after I see the Fareway ad. I developed my own habits that keep my utility bills insanely low. And I’ve been able to build a decent rainy day fund in the event I need to weather a storm. I learned all these habits from my mother. I may never be flush with cash, but because of her, I know nothing but abundant wealth.

Comments: 319-398-8266; althea.cole@thegazette.com