Money in the pocket soon burns a hole.
The necessity for family administration, or domestic economy, has been shown in Chap ter III. The lower the income, the greater the need of this, for the fundamental de mands to sustain and protect life and health are incumbent on all people alike. The worst enemy to the fortunes of a family is waste. So long as it goes on unrecognized and un restrained, no attainment of independence is possible.
It has often been said that the poorest peo ple in the world are those of moderate in comes, and the reason alleged for this state ment is this : With an income that is more than sufficient for the purchase of actual necessities, the temptation enters to add the cost of luxu ries to the cost of necessities. The ra pidity with which money disappears on this basis is amazing. Thus, the purchase of an automobile, made possible only by mortgag ing the household furniture, is a case in point, and a very common one. The temptation to own a car is readily yielded to if one has any visible means whatever of earning its cost, or even of making a first payment. It is said that the frequency with which automo bile dealers are compelled to foreclose chattel mortgages is appalling. In making a pur chase of this kind, a man not only mortgages the property he has, but he gives in pledge his future income and his peace of mind.
Undoubtedly, all forms of installment pur chases are unwise. The proper handling of this question, however, belongs to wise house hold administration. Unless husband and wife are equally foolish and improvident, the house property will never be mortgaged for anything one is not justified in buying.
Individual administration is but a detail of household economy. Many a man earning a fair salary takes a greater portion of it for his own use than he is justified in doing. But the man who is intent on working for the future independence of himself and his fam ily, never does this. The salaried man, or wage earner, is on the road to fortune the moment he begins to govern his personal ex penses rigidly. He denies himself to-day,
only to be the possessor of greater freedom in the future.
Hence, every man who earns money which pays for the care of a family, should compel himself to live within an allowance. He can readily determine what amount of allowance is sufficient. Let us take Jepson's case. He earns considerable money, which provides all necessary expenses for his wife, three chil dren and himself. Until quite recently, it was Jepson's habit to draw a check for cash for his own personal needs, or for what he thought were his needs. When household ex penses increased, Jepson could not quite fig ure out how he came to carry so small a bal .
ance. He looked through his check books for the previous twelve months, and was amazed to find that he had drawn checks in his own favor, for pocket money, to the extent of nearly sixteen hundred dollars. If someone had asked him for a detailed report of what he had done with this money, he could not have supplied it.
Then Jepson girded himself up, and de termined to stop wasting cash. He made as accurate an estimate as he could of his daily and other personal expenses over a year. The list included these items : car fares, daily papers, lunches, clothing of all kinds, postage, tailoring, laundry, cigars, and monthly maga zines. He figured industriously on this, in the desire to eliminate wastefulness. Finally, he determined that on an allowance of fif teen dollars per week (or seven hundred and eighty dollars per year) he could meet all his personal expenditures. So he began on this basis. At the end of the first week he had a small balance. This he put in a drawer in his desk, and in each succeeding week he added to it the unexpended portion of his allowance. When it accumulated to five dollars he put it in a savings bank, open ing the account in the joint names of his wife and himself.