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Who are the Amish and what do they know about managing money?
The Amish are conservative Christians who migrated to North America in the early 18th century to escape religious persecution in Europe and to find land to farm.
You may have seen a movie or documentary about the Amish who are often romanticised as one of our few living links to a bygone era. We associate their culture with a traditional, austere lifestyle; plain, modest clothing and very large families (as many as 7 children!).
The Amish way of life of has remained largely unchanged since they settled in America. Banned from technology and electricity and traveling by horse and buggy, the Amish live a secluded life away from other Americans. Gratitude, service and community are at the forefront of their traditional beliefs, and their lifestyle ensures these remain the priority.
Now, they’re an unusual people with some rather unusual beliefs.
But, you see, they don’t suffer from financial problems.
And, perhaps they’re laughing at the rest of us who do!
What’s their secret?
Well, it has to do with their simple, minimalist way of living.
Here are 5 strategies the Amish use to build wealth that you can benefit from:
1. Be wary of lifestyle creep
We’re influenced by slick marketing campaigns and FOMO. So whenever we come into some extra cash we’re likely to spend it on the latest gadget.
Because they aren’t bombarded with all the commercialism that the rest of the world is, the Amish don’t go in for every new fad.
The Amish value family and experiences over material possessions and prefer to purchase high quality goods that are made to last. They use things until they wear out.
The Amish keep their eyes on the big picture and the long-term and are willing to wait for something they really want.
Their money consciousness and savviness is also why Amish people are known to be excellent business people.
2. Save more
It’s a struggle for most Australians to save even 5% of their income but the Amish can put away as much as 20% with minimal effort. How do they do it?
- They understand the power of compounding interest over time – imagine getting rich on just the interest on your accrued savings!
- They’re masters at minimising waste, repurposing and recycling.
- They buy second-hand rather than new.
- They sew their own clothes and dry their clothes on the line.
- They grow most of their own food organically and buy groceries in bulk.
- They don’t eat junk food or pre-packaged meals.
- They barter their services/goods for others’ services/goods.
3. Avoid credit cards and personal debt
20.69% of Australians aged between 35 and 54 have 3 or more credit cards and the average credit card balance costing Australians interest is $2,007 per card.
The Amish will do whatever it takes to make ends meet and are a very resourceful bunch. They loathe debt and their default is not debt, it’s “make it work”. Rather than turn to credit, they’d sooner take up a side job when money gets tight.
Those that do use credit cards for convenience pay the balance off in full every month.
They may take out a loan for real estate or a business. And if they do, they view it as a moral obligation to pay it back in a timely way.
4. Teach your children the value of being thrifty
Amish children are not overindulged but taught life skills, to value and look after their money and to help to share the burden of running a home.
Another fundamental value the Amish teach their children is to determine the difference between want and need when it comes to making a purchase. They consider the item before making the purchase in terms of whether it will add value to their lives in some capacity.
5. Look for warning signs that you have a problem with managing money — and get help before there’s a crisis
The Amish are particularly good at this. The Amish have a great sense of community and they are genuinely interested and committed to helping their families and neighbours.
If someone is having issues, the community has a fund that can help and others will get involved and assist in creating a workable budget.
By embracing these principles for managing money, and tailoring them to suit you, it’s possible to reconnect with a simpler way of life and shift your focus to what’s really important.
If you want to have control over your money and be more intentional about the way you spend and save, a spending plan is the answer and I’d love to help you create yours. You can find out more about spending plans vs budgets in this blog post.
It’s never too late to learn how to succeed with money and eliminate the pain of money stress. I can show you exactly how to do it. Book in for your obligation-free chat here.
