7 Financial Tips From the Great Depression

Written byy Jason Lankow

Having lived through the depression, our grandparents and great-grandparents formed a lack of trust in banks and turned to burying cash in the backyard or hiding it under the mattress. Our current economic downturn doesn’t yet call for such drastic measures but there are things we can learn from those who went through this challenging era and prospered.

Food: Grow a Garden

Source: BW/Color

Growing at least some of your own food can save a lot of money and provide the satisfaction that comes from eating local, really local. Consider starting a community garden such as the Depression-era community relief gardens, or the World War II Victory Gardens. For step-by-step instructions on growing your own relief garden at home, check here, and apply those same basic ideas to any project that you can implement on someone’s vacant lot (with permission) and organize some friends, family and neighbors. If you are more interested in developing a community garden, here is an in-depth overview.

Entertainment: Enjoying the Simple Things

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Not everything about the Depression was actually depressing. In hard times, we can sometimes find a lot of pleasure in remembering to enjoy the simple things in life. During the 1930s, games like Monopoly became popular because they gave people hope and allowed them to dream of a better life. Remember some of the board games from your childhood, and plan a low-tech outing with friends and family. It will also help you remember that you don’t absolutely NEED every single gadget that hits the store shelves, and on top of that it will be a bit cheaper than spending the day at Disneyland.

Transportation: How Many SUVs Does Your Family Need?

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Hitchhiking was prevalent in the Great Depression, and this is one area that can at least offer some creativity, although Mint absolutely does not recommend that you sell your car and get to work each day by holding up a thumb next to the freeway, nor should you become a hobohemian and hop trains to get around. However, since owning a car is more of a luxury than a necessity, we can learn from the community aspect and form carpools, walk to the store if it’s only a mile away, and if you are lucky enough to have a half-decent public transportation system, Google Maps now shows your time and cost to drive relative to taking a bus or walking. Consider moving closer to where you work and walk or ride a bike instead. Like Dave Ramsey, author of Total Money Makeover, says: “If you are willing to live like no one else now, you can live like no one else later.” Essentially, by defying convention, even for a relatively short amount of time, you can save a hefty sum of money.

Housing: Downsize or Rent a Room

Source: BW/Color

We all have different situations, and this is one of the most pressing issues facing our nation and the world right now. You might be just out of college and trying to make it on your own, or you might be paying for your child’s college now, but there are definitely lessons to be learned from the Depression. In some cases, it may be beneficial to sacrifice a bit of privacy in the short-term in order to get back on track financially. Rent an extra bedroom to a friend, have your child move back home if you are struggling to send him or her rent money every month, or downsize your home. You don’t have to necessarily make a gut-wrenching decision overnight, but do yourself a favor and at least check out some listings on Craigslist for rentals, or have a real estate agent email you listings in a cheaper price range. If a great deal pops up that piques your interest, you can at least bat around the idea with your family. If you are single, just go for it!

Jobs/Entrepreneurship: Nothing Left to Lose?

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Due to the extensive public works projects in the 1930s, there was at least a bit of relief for the unemployed masses. People simply took any work they could, and often worked 12 hour days. If you are looking for employment, you might consider looking for a position that is slightly below your ideal salary, but that seems to have the most potential for advancement. If you are entrepreneurial, and perhaps have already fallen behind on bills, one positive thing about the current economic climate is that you are starting over at a time when many other people are also faced with starting from scratch financially, and perhaps you may even be in a position where you literally have nothing left to lose, which can be a great time for personal innovation and taking the risk to start in a new industry or implement an idea that’s always been in the back of your mind. It’s time for boot-strapping!

Credit: Redefining What You Can Afford and Need

Source: BW/Color

If you have credit available, you might be tempted to use it before the bank cuts the credit line. Don’t do it. Going into debt will only hurt you in the long run. Instead, remember the words of your grandmother and heed this simple, age-old advice – “if you can’t afford to pay cash, you can’t afford it.”

Money Management/Budgeting: Simplify Your System

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When you simply have no money, it is easy to keep spending under control because it is impossible to spend. In many cases, one spouse saved money in the cupboard and even hid it from the other spouse. There is a good trick to be found here that requires a lot of discipline. If, for example, you are getting hit with overdraft fees, you need to establish a barrier that you absolutely will not dip below (even if it means paying a bill late). Take the cue from the 1930s and use cash rather than debit for your petty purchases, especially when you are close to zero in your account. This will help avoid paying $36 for that pack of gum if an unexpected payment goes through your account and causes an overdraft fee.

For our grandparents and great-grandparents who lived through the 1930s, many months surely consisted of living in survival mode, and there were much fewer recurring expenses and bills to be paid, so it was possible in a lot of cases to keep track of spending without even necessarily writing it down. Today, we have several types of accounts, in many cases at different institutions, with new types of debt and monthly payments to keep track of, so take a look at Mint’s free software today and start tracking your spending automatically to find areas where you can save money.

6 thoughts on “7 Financial Tips From the Great Depression

  1. taxes

    I found your blog on google and read a few of your other posts. I just added you to my delicious. Keep up the good work. Look forward to reading more from you in the future.

  2. Ralph

    My parents, who lived through the depression, borrowed money. They won’t have survived if they didn’t. Of course, all of the scraping and working from the total family was for naught, because the medical/government/legal system took everything from them as soon as they retired (at age 70 and 72).
    Same thing for me, I’ve worked for year after year (40 total), holding onto those pennies. I built my own home. I paid my bills. I raised a kid with no help from anyone, including the government. I worked two or three jobs, denying myself of most things that others take for granted. I paid to get myself higher education. I took care of my health. Again, for naught.
    Five years ago, I was assaulted in the hospital by the hospital staff. Because of the heinous FDA preemption, I was denied any redress. I was illegally fired and illegally designated “disabled”. The EEOC refused to help. The legal system refused any help. This enabled the insurance company to take away my retirement forever. I worked with the VR and the SBA for over two years. I completed their “steps” which entailed great expense and time. Finally, I was told that I was denied any help, because I didn’t have “enough income to qualify for any help, whatsoever”. This depleted my life savings. I’ve spent the last three years sending resumes out. I haven’t received a single response. The firms that I’ve been find out the numbers for, tell me that the IRS is preventing them of hiring the disabled. I’m BARRED from working for the state, and the federal government (they hire the “handicapped” sometimes, never the “disabled”). The internet seems to be a total waste of advertisement, since I haven’t found a single job that is not a scam (I would REALLY like to be wrong, please, do that). Of course, I MIGHT be able to get a SSDI, if I give the medical industry my home for more harm.
    So, my advice is to ignore these insipid articles. Use your brain to fight the fascism that has ruined this country. “Partnership” with private agencies is rife with fraud and greed. Capitalism is a diseased whore (ya, I know, they started as virgins). Corporatation is NOT YOUR FRIEND. Vote for Ron Paul. USE YOUR LITTLE BRAINS for some other than for virulent stupidity and computer generated ignorance! Get some intelligence into this system!

    1. dogsRbetter

      Ralph has it on the money, or rather, the lack thereof. My friend’s parents worked hard all their lives, saved, stayed out of debt, paid off the family home, when retired paid $475,000 CASH for dream retirement place with plans to sell older home for funds to live…she became ill…family went thru $800 grand trying to save mom, she died, now dad has Alzheimers, dream home is now a nightmre worth only $75,000 and with section 8 moving into the adult community with loudmouthed, dangerous kids. Thanks to real estate speculators looking to make a quick buck, dishonest bankers ditto and the out of control medical system refusing to tell them that PEOPLE DIE SOMETIMES, AND AS THEY AGE THIS IS BOUND TO HAPPEN!!! the estate is gone, dad is near destitute and do nothings are now able to take his home from him. What did all this following of the rules get him? Nothing more than the lazy slobs living for generations on the dole, and maybe not even as much. The land of the free? home of the brave? BAH. More like hand outs for free, all for the knave. The sense of entittlement in this country today sickens me. I think it is long past time for a new American Revolution. I DO NOT want to support your kids, DO NOT worry about anyone’s ability to provide for their kids, and furthermore I DO NOT give a rat’s behind if the kid goes without meals on weekends! If you WANT me to care and to continue to pay then I demand the right to decide just who is qualified, mentally, emotionally, physically, intellectually and financially to breed and raise kids. And that is just the biginning of my demands! If I gotta pay I want the say. Something has got to change-and change huge and fast-or Joe Q. Public may just start a rebellion never seen in history before. Quit draining the workers-we just might quit. dogsRbetter

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