Mom Knew How to Work Within a Budget

Most pre-boomers remember how mothers put money away to take care of normal expenses as well as save for vacations, Christmas and "rainy days." This taught us how to use our paychecks when we entered the workforce and throughout our lives.

My mother had a red metal box, which was locked and kept in the back of a closet. She brought this out each week and sat down at the kitchen table after depositing my father's check at the bank. There were a dozen little copper boxes inside the master container with a slot in the top so money could easily be slid in or the master key could be used to open the individual boxes. Each of these was labeled: mortgage, groceries, insurance, car, utilities, washer, clothes, etc. There were no credit cards back then, although the major department stores had revolving credit accounts and some local merchants allowed customers to charge their purchases. So, cash was the medium of exchange.

The mortgage was paid monthly at the local Building & Loan. The car was paid for when we bought it, but mom put money away and deposited it in the bank once a month so the money was there when it came time to buy another car. The same was true with the washing machine and clothes. Utilities and health insurance was paid by mail with a money order purchased at the corner drug store. Life insurance was collected by a man who came to the house once a week, at which time he made a notation that we paid in the big ledger he carried from house to house. We didn't have everything, but I never heard my folks complain about owing more than they could afford.

In the early '50s the first credit cards became available through Diner's, at first for use at select restaurants. By the end of the decade the concept of nationwide credit was expanding. American Express made a strong entry into the market and held its position through the '60s. This card was promoted as a convenience for businessmen who did not want to carry a lot of cash with them. The balance had to be paid off each month, much like mom used to do with her budget box. In the early '70s, MasterCard and Visa came on the scene and offered monthly interest bearing payment terms. This started the consumer credit explosion, certainly something our moms never envisioned.

Today, credit card debt is strangling many American families who can't payoff their balances because the interest on the unpaid balance is so high. What was once a convenience has turned out to be a curse.

Maybe it's time to go back to the idea of not buying something if we don't have the money already earmarked for the purchase and pay it and all other bills off each month. We need to revisit this basic budget principle and teach our grown and grandkids the importance managing their money - just like mom used to do.

Don Potter, a Philadelphia native, was born in 1936 and is a 50 year veteran of the advertising agency business. Now living in Los Angeles, he has written two novels in retirement, frequently writes on marketing issues, and has a blog dedicated to pre-boomers (those born between 1930 and 1945).

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