Live simply, stupid: Amish finance lessons we could all use

Long before frugal living and keeping your finances tight became part of the daily life of making due during the recession, the Amish had it covered.

They watch what they spend, learn to save at an early age, are entrepreneurs, and have a network of friends and family to help in emergencies.

When is the last time you saw a homeless Amish person? Never. Why? Because they have a social network in their church that helps provide for members who are having a tough time.
While they're not exempt from the effects of the recession -- some Amish in northern Indiana were laid off at factory jobs and have returned to farming -- their lifestyle helps lessen the impact.

In an excellent article for the Houston Chronicle, Amanda L. Grossman recently wrote about Amish finances and what "Englishmen," as the Amish call non-members, can learn from them.

Last year, WalletPop's own Geoff Williams wrote about frugal living by the Amish after talking with his brother, who is an expert on the Amish. I don't know if Geoff ever followed through on his idea to live like the Amish for a year as a way to save money, but here are some more financial tips that Grossman writes about that you might want to try:
  1. Saving early. Amish children typically attend schools until they're 15, then they become apprentices to the the many trades and businesses in their communities. Teens give their paycheck to their parents, who give the child 10% for spending money and put the rest in a bank account that the worker gets when they turn 21.
  2. Live at home for free. If not married by age 21, the Amish continue living at home and don't pay rent and such bills. They continue working and contributing to the family.
  3. Cheap labor. With large families of eight or more children, an Amish family can run a small business or farm without all of the costs it would have if it hired workers.
  4. Low taxes. It's a common misconception that the Amish don't pay taxes. They pay the same taxes that other Americans do, but not Social Security or Medicare. The Amish don't collect Social Security when they turn 65, and aren't eligible for Medicare. To claim the exemption through the IRS they must be a card-carrying member of their church.
  5. Community health insurance. They use their savings and donations from fellow church members to pay any medical bills. Each church has a board of directors that collects premiums each month from the congregation according to the age and number of family members. Money is pulled from that fund as needed.
  6. Entrepreneurs. Every Amish person has some sort of skill or trade and is anxious to sell it. Driving down the heart of Amish country in Pennsylvania, Grossman writes, are numerous signs pointing where to buy Amish goods. An honesty box where you pay for anything you buy, allows them to be at their normal day job while selling their crafts on the side.
  7. Live humbly. This is the basis of their lives, and it shows in how grateful they are for what God has given them, not wasting anything, being charitable and driving horse-powered buggies.
Aaron Crowe is an unemployed journalist in the San Francisco Bay Area. Read about his job search at www.AaronCrowe.net

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