In 1974, my great-grandmother made a deal with my 18-year-old father that taught her a lifelong lesson in saving

In 1974, my great-grandmother made a deal with my 18-year-old father that taught her a lifelong lesson in saving

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  • In 1974, my dad spent the summer working at a motel and made $2,000.
  • My great-grandmother added $3,000 to his earnings on the condition that he leave them on a one-year CD.
  • That year, my dad earned $900 more in interest and learned the value of saving money.

In the summer of 1974, my father was 18 years old. He worked as a lifeguard at a motel and ran the concession stand at the pool. While the days were busy, he appreciated being able to work outside and chat with passing guests.

At the end of the summer, my dad found out he had made $2,000 in salary and tips. In his own words, he was an unruly young man who spent all his money as he earned it, but he had no time to spend despite working all summer. He planned to spend all his earnings on new clothes and shoes.

My great-grandmother helped my father see the value of saving

My great-grandmother immigrated to New York from Italy when she was a child. She worked as a seamstress and took pride in saving her own money. She was also a shop steward who represented other workers in wage negotiations.

My great-grandmother knew the value of hard work and putting money aside to save, so she approached my dad and said she would give him $3,000 to deposit in a certificate of deposit. , along with his $2,000 in winnings. However, he couldn’t touch the money for a year. If he could wait a year, he could do whatever he wanted with the money.

My father gladly accepted. While waiting a year to access his money wasn’t ideal, he planned to spend the $5,000 by the end of the year. Her new clothes and shoes could wait until then.

My great-grandmother chose the Manhattan Savings Bank in Manhattan to place my father’s money. Her family had used this same bank since the 1900s and she developed a relationship with the bankers there over the years. As an incentive, the bank gave customers a gift; my great-grandmother received a toaster. Every time he saw that toaster, my dad thought about his $5,000.

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At the end of the year, my father was surprised at how much he was earning while waiting

While my dad waited for his money, he refrained from buying new clothes and shoes because he couldn’t afford them without his summer money. He found that the items he already owned were in good condition and he could continue to wear them.

At the end of the year, my father went to the bank in anticipation of withdrawing his $5,000. He discovered that during the year, his certificate of deposit had earned 18% interest and had matured at $5,900. My father was amazed that his money had increased by leaving him alone.

He continued to save his money rather than spend it. Over the year, he realized that he didn’t miss buying new clothes and shoes as much as he thought. He contented himself with the objects he already had.

These lessons stay with my father today as he continues to save

Although CD rates fluctuate over time, the lesson of valuing saving versus spending stayed with my dad. When he learned he was making $900 in a year by not spending money on items he didn’t need, he looked for other ways to save money.

My great-grandmother taught me that just because you have money to buy something doesn’t mean you have to buy it. The satisfaction of knowing you have the money to buy something gives a greater sense of contentment than the quick excitement of buying a new item and immediately looking for the next item to save up for. Living with less generates its own satisfaction.

Even today, my dad says fashion trends come and go, and not adhering to them saves money. He buys only the items he needs, wears them frequently, and only buys something new when the old one is worn out or has fallen apart. He recently had to replace a pink polo shirt he bought 35 years ago, much to his dismay.

My dad also learned a valuable lesson about delayed gratification. It’s hard to be patient while waiting for investments to grow or accounts to mature. However, consistent saving can yield greater long-term benefits. If my dad had spent his $2,000 in 1974, he would have missed out on the extra $3,900 he earned while waiting. He would also have missed the important lessons he learned from that year of waiting, which shaped his philosophy and vision of savings for years to come.

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