Apply Lessons Learned from the Great Depression

Recent economic times may mirror what American grandparents or great-grandparents went through in the Great Depression. While this time may be a challenge, it may be an opportunity to look back and learn how previous generations coped with tough economic times. Hopefully, we'll never need to relive their lessons learned, but at the very least we can appreciate their resourcefulness and gain perspective on our own situations.

Steps

  1. Use credit cautiously. A credit line is not the same as having the cash on hand; misusing credit can ruin your life.
    • Do not use credit cards for impulse purchases. If you do not have the cash to make a purchase, then do not buy it until you save up for it.
    • Credit cards are best used if you carry little or no balance. If you have credit cards, make sure to pay the balance off every month. If you cannot, then cut up the credit card(s) and work on paying down what you owe. One of the first lessons learned by people who survived the Great Depression was to never borrow money unless you have a clear plan for paying it back.[1].
    • Do not be overly optimistic about funding. Make sure you have the money before buying the item--especially if it is not something you actually need. For instance, in the classic 1980's movie "Christmas Vacation" the father found himself unable to pay for an expensive Christmas present when the Christmas bonus turned out to be practically non-existent.
    • Use Affirmations Effectively - Repeat this affirmation to yourself until it sinks in: Freedom from debt is real freedom.
    • Prioritize Your Debts - Prioritizing your debts can help you pay them off as quickly as possible, and it can provide the security you need to get back on your feet even in lean times.
    • Invest wisely. The Stock Market Crash helped start the Depression, and part of the issue was bad financial policies and investors unschooled in the risks of investing--many of which are now rectified. Investing is important, and often crucial to planning retirement and other life events. Just do so sensibly and do your research.
    • Have savings. Your house could be wiped out in a flood, you could be laid off, your car totaled in an accident, you get sick--it really takes very little to suddenly go from safe and secure to destitute. The world is an uncertain place, and having reserve funds are one of the most important things in making sure you have a cushion in case of disaster. Even with good insurance, as even with a good plan you may not be covered for everything.
  2. Nurture positive relationships with family and friends. These will be the people who will truly see you through difficult times. The government may not always be able to help you in the way that people who care about you can.
    • Be honest with your family and friends if you are facing difficult times financially. They cannot help if they do not know. And do not be ashamed—people have money troubles, and it does not make you any less of a person.
    • Check if friends and family members can help first. Sometimes, with a little searching, you may find that those around you can offer items, services, and so on more effectively than paid professionals.
    • Talk to Your Children About a Financial Crisis if one is happening at present. Being in financial difficulties can be really troubling for a family. And it can be scary for children, who may or may not understand what it means. But one lesson families from the Depression came away with was that if children were well-fed, living in decent shelter, well-educated, and loved they did not really need so much "stuff". Be honest if there are problems, but keep the emphasis on that the adults will continue to protect and nurture, and the family will work together to work through any problems.
    • Get Adult Kids to Pay Their Share. A healthy adult should not expect his or her parents to support his or her life. (It is one thing to help an adult child on a short-term basis (such as a recent divorce, a mental health crisis, or a financial crisis). But supporting an able adult prevents him or her from becoming an independent grown-up. There is never a great time for kicking a child out of the nest, but at some point it has to be done. If this has been the case, stop this enabling behavior.
    • Have a Depression Dinner. Research what people ate during the Depression. It was not all pinto beans and corn bread--although that can be done well. In general, foods then were mostly the same foods eaten today. People during the Depression typically made simple, seasonal meals without a lot of processed foods...which is still the best way in general to prepare foods.
  3. Enjoy the simple pleasures. During the Depression, people still had fun, just not lavishly expensive fun. Children had soapbox derbies, teenagers had dance contests, and everyone played Monopoly, did puzzles, read, and listened to the radio. Get together to discuss philosophy or pray; play poker or make crazy quilt pillows; play instruments and dance. In those days, it took some imagination and ingenuity, but they had a lot of fun without hanging out at the mall, and you can too. Many of the friendships and alliances formed during the Great Depression on the basis of such activities stood the test of time.
    • Go hiking, fishing, and camping at state and national parks. During the Depression, America funded a lot of projects in state and national parks. As a result, more and more people started enjoying the great outdoors. It also continues to be an activity that can be done relatively inexpensively.
    • Participate in sports. During the Depression, sports were very popular: baseball, football, ice hockey, boxing, golf, cycling, archery, croquet, target shooting, horseshoes, shuffleboard, golf, competitive sailing, and more!
  4. Do It Yourself. When money is short, you don't really have a choice. Either you do it yourself, or it doesn't get done. Learn how to fix and maintain everything in your home, including your clothes and accessories.
  5. See Be Frugal as a virtue. There's a difference between being frugal and being cheap or stingy. A frugal person makes the most of what they have; a cheap person is just focused on not spending money. During the Great Depression, frugality was seen as a positive trait. During hard times, it'll help you get by, but when things get better, maintaining those habits will help you build wealth. Plus, frugality requires planning, creativity, and critical thinking, all of which are important life skills, regardless of the state of the economy.
  6. Treat food with respect. When times get tough—really tough—you appreciate having food on the table. You might never know what it's like to have to eat wet bread for dinner, but you don't have to get to that point to make the resolution never to waste food. "Take all you want, but eat all you take." Cook food from scratch and, if you can, go straight to the source (such as dealing directly with farmers) or become your own source: grow your own food, keep livestock, gather wild edibles, and/or hunt wild game if possible and legal. Whatever it is that you procure for food, never let it make it to the garbage can without a very good reason.
    • Save Money by Shopping Once a Month
    • Get Started in the Slow Food Movement
    • Keep Chickens in a City
    • Learn to cook. There is probably no skill that will get you through hard times with equanimity than being able to rustle up a good meal for yourself out of whatever is around.
    • Buy preserved (canned, dried, etc.) foods in bulk whenever the cost is lower, rather than buying a smaller size. Do not, however, buy more than you can use before it spoils.
    • Avoid "convenience" foods, as they are usually more expensive and less healthy. Learn to cook. You can save a lot of money by cooking from scratch rather than ordering takeout. A good thrifty cook can make a tasty, nutritious meal from inexpensive ingredients and "stretch a meal". Also, leftovers are much cheaper to bring to work or school than buying lunch.
  7. Don't treat your soil like dirt. The importance of soil conservation came to the forefront during the Dust Bowl. Due in large part to destructive farming practices, vast areas of the United States were turned into sterile, lifeless landscapes and many families left destitute.
    • If you are involved in agriculture, practice good soil management for your locale.
    • As a citizen, advocate for and support good soil management: protective farming styles, community gardens, sensible logging practice, and avoidance of destroying sensitive ecological systems whenever possible.
    • In your own back yard, check and prevent erosion through good landscaping, compost if possible, use gardening, lawn, and landscaping processes that build soil. Remember to conserve water too, if you live in a dry area.
  8. Reuse, reuse, reuse. The amount of stuff you have should already be reduced by your limited spending, and you'll always want to think twice before throwing anything away, whether it's into the trash or the recycling bin. Get everyone involved, especially children. Hold up an item that you would normally throw away and ask, "How can we reuse this?" Here are some ideas to get you started:
  9. Practice good domestic skills. In the Great Depression era, there was often an emphasis on good housekeeping that is sometimes under-appreciated today. Being a housewife was a full-time, respectable position. Keep your home clean, tidy, organized, and hygienic.
    • You will save money on waste and replacement.
    • It does not take a lot of money to clean--although it does take time and work. Often a clean home is better than one that is well-decorated but filthy.
    • You can feel more in control of your corner of the world. Whatever your worst expectations of being broke are, living in a dirty, disorganized place is likely to make it seem like they are coming true.
  10. Be thankful. Be thankful when you're economically strapped? Of course. Make a list of the top five things you couldn't live without, and chances are, all of those things are not possessions. Most of all, be optimistic. As one Great Depression survivor said, "I never thought a cloud was so dark that I couldn't find a silver lining" (Betty Davison).
  11. Realize that the deck may be stacked against taxpayers, but there's no tax on cheap goods being dumped in the USA! Take actions to get rid of high IRS Tax on American products. Is it HIGHEST corporate tax in the "1st World"? You can actually pay up to 50% tax on USA made products, all tolled. That's up to 28% Fed Corporate Tax + 14% State Corp Income taxes all passed on to you (TX, FL and a few others have no state income tax) + 8% Sales Tax, if you're not buying wholesale.
  12. Work for candidates and donate to ones that offer low taxes on manufacturing. Plans to bring back industry, etc. to American by low taxes may be offered by candidates. But, some have none of that and NO ideas that could turn lost Middle Class jobs around, like to cut taxes to bring jobs back home.

Tips

  • Try to save on electricity bills and telephone bills. If you're purchasing an electronic device, look for the ones that save power.
  • Before purchasing anything, give it some thought. Do you really need it? Where will you put it? How often will you use it? How durable is it?
  • "Use it up, wear it out, make it do or do without." If possible, use the things you have until they are completely used up. Or, even better, do without things that don't hold up to use.
  • Many of these lessons - especially being respectful of the food and things you have, and not spending beyond your means (using credit) - should be applied to the good times as well as the tough.
  • Ask your older relatives and friends how they lived through the Depression. Most will be happy to share how they "made do". If you don't know anyone from that generation, consider volunteering at a local senior center or nursing home. You'll gain tremendous insight, and they will gain good company.

Warnings

  • Be careful that you price out doing something "from scratch" versus buying an item. For instance, you are unlikely to sew a T-shirt for less than you can buy a typical T-shirt at your local discount retailer.
  • Be careful not to sink into hoarding behavior. While one shouldn't be wasteful, there is a point at which saving items isn't useful. For instance, while you could reuse a baby food jar, do you really need 76 of them? Sometimes it's much wiser to donate, recycle or even throw out things when there isn't a demand for its reuse.
  • Also remember not everyone in the Depression was destitute; some were financially quite fine. Not all neighbors worked together, not all families did without, and not everyone was grateful.
  • Some debt is actually important to have. Having a good credit history, requires utilizing debt. Also, student loans in America are typically a necessity to earn higher education which is a requirement for many high-paying professions. Staying completely out of debt, oddly enough, can actually lower your credit score!
  • Remember that the Great Depression was in many ways a very different time than today. For instance, in the U.S., a typical checking account is FDIC insured, so you don't have to keep your savings in gold bullion or under your mattress.

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Sources and Citations

  1. ↑ http://www.cnn.com/2008/LIVING/10/13/depression.irpt/
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