Frugal Parents: Using Credit Cards as Debit Cards

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This is a series I put together to share my parents’ frugal habits. My family grew up poor, but it never felt like it to my sisters and I. It was only when I grew older that I realized how much my parents had to scrimp and save, in order to give my sisters and I the life we have now. Some of these stories are funny, some sad and I hope that some may also warm your heart.

I got my first credit card in first or second year university.  My parents had warned me against signing up for a credit card with some random company and insisted I didn’t need a credit card.  I refused to take “no” for an answer, and they brought me to our TD Canada Trust branch to talk to an advisor to open a credit card.

Of course, I got the “Student Green Visa” with a $500 limit. I was ecstatic! 🙂

I didn’t know a thing about what a credit card was.  I just really wanted to “build up my credit”. When I didn’t even know what it really meant.

My parents knew that I could get into big trouble with a credit card, but they also knew that I would get one sooner or later.  So, instead of having me figure out things the hard way, they just me that I could use a credit card but I had to pay it off IN FULL every month.

When I asked my dad about the “minimum payment” amount, he told me to ignore it and pay it in full.  That was the ONLY way to use a credit card.

And so, that’s what I did.  For all of my university career.  I paid off my credit card each and every month.  To me, it was like getting a month of free loan that I had to pay back the next month.

It wasn’t until my first in year into working full-time that I realized that a credit card was a loan that I could take as long as I want to payback (at ~19% interest!).  That’s when I realized how easily I could have slipped up and got myself into a lot of debt, if I wasn’t careful.

My parents use their credit cards as debit cards, paying them off every month in full.  And that’s what they taught me, too.  Even though, I didn’t know the full capabilities at the time I started using my credit card, I think it was for the best.

When did you get your first credit card?  Did you fully understand what a credit card was?  And did you pay them off in full every month?

Cheers,

Frugal Parents: Dial Up Internet

(Photo source)

This is a series I put together to share my parents’ frugal habits. My family grew up poor, but it never felt like it to my sisters and I. It was only when I grew older that I realized how much my parents had to scrimp and save, in order to give my sisters and I the life we have now. Some of these stories are funny, some sad and I hope that some may also warm your heart.

In my parents’ household, my father had dial up internet up until June 2010, when my sister moved back in with my parents and decided that she would pay for high speed internet before she went bonkers. (Remember those whirring sounds? Yep.)

$2.95 + tax

Years ago (circa 2000), my father found a dial up internet service via the Toronto Star for $2.95 per month for unlimited use. The service was reliable and it had no ads! My father was sold and was a loyal customer for the next 10 years.

See, my father used internet mostly to read his e-mail and for minor reading of news websites. Remember back in the late 1990’s when everyone was forwarding chain letter e-mails? That’s the stage my father is in now. 🙂

The Routine

My father also had a routine he perfected with his dial up internet.

He long ago figured out the maximum download speed during “off” hours. On average a 2mb file attachment would take approximately 15 minutes to download, and a 5mb file attachment, approximately 30 minutes.

While his download was going, he would finish some chores in the kitchen – sweeping, dishes or general clean up. All the while, keeping an ear out for the sound to indicate the download was finished.

My mom loved all the chores that got done!

High Speed Internet Discovery

My father discovered high speed internet at my uncle’s house. The funny thing is, my uncle never used his internet – he got it for his kids. So, my father would teach him how to use software to write in Chinese, where to find news articles and basically navigate the web. My dad started going to my uncle’s house to teach him, instead of having my uncle come over.

You know how they say, once you have high speed internet, there is no going back? Well, that is true for almost everyone – but not my dad. Instead of getting high speed internet, my father bought several USB sticks and would simply download his e-mail attachments at my uncle’s house and read them over the course of the week at his own house!

I just asked my dad last week whether he could go back to dial up internet, and his answer was YES. If my sister wasn’t paying for it, my dad would go back to dial up in a heartbeat. He said he couldn’t justify paying 20 times the price for “just a bit of speed.”

When was the last time you used dial up internet? Are there any readers out there still using dial up internet?

Cheers,

Frugal Parents: Growing up in Fab Frugirl’s Family

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I mentioned before that I grew up poor.  My parents immigrated from Southeast Asia to escape war torn countries  and to give their future children a better life.  Life was not easy for my parents, and I think all too often I take for granted things that my parents have sacrificed and worked very hard to achieve.

Background

My father has worked in various manual intensive jobs most of his life.  My mother stayed at home with my sisters and I, ran a home-daycare, and returned to the work force (also doing manual intensive jobs), when I was in grade 7.

Now that I am on my own, I can’t imagine how much my parents worked to stretch their dollars and pennies, but my sisters and I were always taken care of.  We always had healthy home-cooked meals, warm clothes and shoes, glasses, and we even got to go on school day trips.

Low Income, High-ish Networth

According to the data in Money Sense’s Guide to Retiring Wealthy (Ch. 8, p.125), my parents’ household income has always ranged between the poorest 20% and lower-middle 20% (annual gross income of $30,000 to $56,000).  But their current net worth is in the upper-middle 20% compared to other Canadians ($358,000 to $687,000).

I was completely blown away with a huge sense of pride and deeply humbled by my parents’ accomplishments.  I always knew that my parents were frugal and saved for the future, but I never had a measuring stick, so to speak.  I showed my dad, beaming, but I think he already knew.

The Secret

There is no secret to my parents’ success?

Like most immigrants, they have worked very hard their entire lives. They lived a simple life and they saved for a rainy day.  Their recipe may not be for everyone, but I try to apply my parents’ wisdom and frugality to my daily life.

I will share some of their frugal tips (and stories) in my “Frugal Parents” posts.  Some of them are simple and applicable, others are hilarious and crazy.  I hope you enjoy them as much I enjoy thinking back 🙂

Living Simply

My dad has a poster in our family room that had two Chinese characters, “to know” and “enough” (sorry, couldn’t find the Chinese characters).  Pretty self explanatory and simply, but also very powerful.

It’s easy to say, but it takes dedication to achieve.  It’s dedication that my parents have shown through how they live.  My parents drive a simple car (to the ground), rarely eat out, don’t go away on vacation (or at all), no brand name clothes, no movies, no buying coffee.  You get it.

My dad would always remind my sisters and I, that a greedy person can never be satisfied, no matter how much money or nice things they have; but a poor person can be satisfied because he does not long or lust after superficial things.  Although, my dad’s wise words didn’t really help when I couldn’t have the nice sneakers in high school, it’s something that I often think back and reflect on, now.

Saving for a Rainy Day

My dad worked as a book keeper in Hong Kong, and home, he is in charge of tracking my family’s expenses.  My dad didn’t use anything fancy, just a notebook to log purchases.  But he was really diligent about tracking every penny.  In fact, my dad showed me his spending for May 1999, and could tell me how much he spent that month on diapers!

Growing up, my dad’s pay cheque usually went to paying bills, including mortgage, utilities, groceries, insurance, car payments (if any), and any other day to day spending.  My mom’s pay cheque from her home daycare went towards saving.  From my parents’ combined savings, they were able to cover emergencies, such as, unexpected health care, a few semesters of tuition, and upgrade to a bigger house.

Frugal Parents “Series”

I thought it would be a neat idea to share random tips and stories about my parents’ frugality.  I met up with the lovely and talented FB of Fabulously Broke in the City and we had such a great time swapping stories, I thought my readers might also find them interesting (and sometimes, amusing).

I’ve also had a reader request to share some frugal tips that my parents have employed a while back.  I put together a mini-list of things I can think off the top of my head to start off, and I may elaborate on them later on in the series.

Growing up in my parents’ home:

• There was no high-speed internet (up until June 2010)
• We ate out only once a month (roughly)
• We only had basic cable
• We shared a family cell phone whenever someone went out
• My dad has never bought a cup of coffee
• My dad took us to the library every other week
• My dad cut my sisters and my hair in the standard Asian bowl cut
• My dad once used rope to keep our car together (long story)
• My mom cooks almost everything from scratch (yummy!)
• My mom has a food index “Rolodex” in her mind
• My sisters and I wore hand-me-downs from parents’ friends’ sons (unfortunately, none had daughters)
• My sisters and I got part-time jobs to help save for college and worked throughout college

I am really looking forward to sharing my parents’ frugal tips with my readers.  And, just because my parents are frugal, it doesn’t mean all their money saving tips work out. 😛

What are some of the frugal or different things your parents did growing up?

Cheers,