7 Financial Tips From the Great Depression
Share This
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
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
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?
Source: BW/Color
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
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?
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
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
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.
Related Articles
Organize your financial life.
Use Mint.com to see where your money goes, get bill reminders and alerts, track your investment performance, and find extra savings. It’s FREE!
Find Out MoreHow Mint Can Help
See Where You Spend
Mint.com auto-categorizes all of your transactions so you’ll always know where your money goes. Find out more »
Popular Articles
34 Comments so far
leave a commentThe last two are the only ones that are practical for me. Moving closer to where I work means either setting up tent near a river or in the parking lot near the mall. There is no public transportation and none of my coworkers live in my neighbourhood. How do you grow an outdoor garden in the winter? I live in NJ, a car IS a neccessity. “owning a car is more of a luxury than a necessity” if you live in a crowded urban area.
This is a great site. It has helped me save a lot of money. Also visit http://www.chillmybills.com for more great ideas.
It’s a timeless truth that when people have the fewest resources, they use what they do have most cleverly. There’s a lot to be learned from the tough times that should be applied even when times are good.
@Skellie – Great point, in this day in age, the sky is the limit in respect to the resources we have at our fingertips. The Internet is an amazing thing. We have all the answers, sometimes we just do not ask the questions.
Great tips. If you are going to do a garden, make sure it’s big enough to get a return on your investment. Buying gardening tools, soil, etc to only get a few plates of veggies is not a sound investment.
Renting a room, instead of an apartment, is a great idea. If you rent a room in someone’s home, oftentimes you pay rent that is all-inclusive (i.e. it includes your rent, laundry, cable, utilities, etc) so that you aren’t bothered with multiple bill payments or “surprises”.
Another advantage is that you will typically not have to sign a lease, so if a job opportunity comes up, you can take it on short notice.
I am living in a private home with two other renters: Each with his/her own room. We don’t really have much in the way of shared space, so conflict is kept at a minimum, and with the homeowners on premises we are assured of a safe, well-maintained housing situation. Plus, I get to live in a beautiful home in a great neighborhood at a fraction of the cost of local rents!
I really need to take a look at my own life and how I live,I am going to try to implement a couple of those things! Thanks for sharing,keep up good work!
@Khurt
You grow during the spring/summer into fall depending on the vegetables, and you grow enough to stock through the Winter.
Its also not made to completely cut costs, just alleviate the price, you can buy to supplement through the cold months.
Excellent article, especially the uplifting benefits of such times are not neglected while useful hints are given. Life continues to be tragicomic.
Dropping down to basic cable or dumping cable is another option for savings. Coupons are king and can save quite a bit and for the holidays there are a ton of on online shopping sites with free shipping. But most of all, the realization that we don’t need half the crap we purchase makes like much simpler.
I agree, cable is a big luxury. Honestly, you can drop cable and get almost everything on TV through netflix or free on the internet. Sports would be the one thing you would miss most (and for the most part, watching them with friends is more fun anyway).
Food has a lot of flexibility. First, Iron and protein does not need to come from meat. Kidney and liver is a lot cheaper than meat. Some people like the flavour, some people acquire a taste, some people can suffer it quietly… those who can’t eat foods like this will have real problems putting food on the table.
Old recipes are good as well, and are sometimes really healthy, and are even great for diabetics. Old Bacon/Ham and vegetable soup is dirt cheap to make, and lasts a family of four a few days with bread. Traditional soup mix (barley, lentils etc.) with the meat stripped off a couple of bacon hocks, a Kg of onion, and a full celery is delicious… you will have envious neighbors while it is cooking. Oh, for a decade now, in my region, bacon hocks have been expensive… substituting with 1Kg of reasonable bacon finely diced is a pretty good substitute and can be cheaper depending on your prices. Add salt and a reasonable amount of pepper to taste.
Raid your grandmothers old cook book if you can. Family recipes that have endured are often tuned to the palette of your family.
I like the idea of downsizing the house.
Also the concept of entrepreneurship gaining independence.
Finally, and most important knowing how to budget, and
manage money.
thanks from tony
I always find it funny when someone thinks that owning a car is a luxury. Driving a Hyundai will never be a luxury. Not even the new Genesis.
Bunny Says: November 21st, 2008 at 2:20 pm
Food has a lot of flexibility. First, Iron and protein does not need to come from meat. Kidney and liver is a lot cheaper than meat.
——————————-
liver = meat???
@ed (and others) it takes roughly 2 acres of land to grow food for one person for a year. This may seem like a lot but this year, we had a 30 x 30 foot garden devastated by woodchucks. Additionally, stocking food for a year takes a fair amount of space.
Growing your own greens, tomatoes hydroponically near a sunny window and some overhead lights is a much better deal. Expect your cost to work out to roughly $1.20 a head for lettuce if you value your labor at the same rate as that of a migrant farm laborer.
this blog entry was extremely disappointing to me. It’s the stuff I’ve known for years and try to live by. It assumes you are young and healthy with no assets under water. Try instead figuring out how to live cheaply if you are in your 50s, one partner is disabled, your own health isn’t so wonderful because accidents and illnesses not your own fault.
some of the advice is also suspect. If you rent a room, you are legally bound to observe all of the landlord/tenant laws in your state. for example, you just can’t evict someone. That’s a surefire way to get you into court, habitat living your house, potentially doing damage to it or threatening your family while not having to pay any rent. No thanks.
it’s not as easy as the blogger asserts.
All of these points are well taken. I would add a few more–take a look at the expenses you have each month (electric, heat, water, cable, phone), and call each provider. There’s probably $100+ each month to be saved there.
Sometimes bad economic cycles can be an advantage to whomever can hang onto their jobs. Things get a lot cheaper…
Some great simple tips here. Depressions are a great way for people to re-evaluate what they need and want.
I live in Florida, and I spearfish for dinner. Been doing it for years! Its a fun outdoor activity, keeps me in shape, and I just love it fresh grilled. Them sharks never bother me either .. that’s all hollywood stuff. They show up sometimes, but they just take a quick look-see and then scoot.
@JonKepler: I always find it funny when someone thinks that owning a car is a luxury. Driving a Hyundai will never be a luxury. Not even the new Genesis.
OK, the US has more cars per capita than anyone in the world. Here’s the map version, notice how most of the terrestrial land mass is green? The US has about 4 times as many cars per person as all of those countries. India and China make up 1/3 of the world population and they are both at the bottom of the list.
It’s easy to think that cars are commonplace, but they’re not. Cars are the single most luxurious form of transportation (short of private jets). In 2003 there were 231,000,000 cars for 300,000,000 Americans. China now boasts 22,000,000 vehicles for 1,300,000,000 people.
It’s easy to think that they’re not “a luxury” when it seems that “everyone has them”. But it only feels that way, most of the world simply don’t have cars.
@Khurt: The last two are the only ones that are practical for me. Moving closer to where I work means either setting up tent near a river or in the parking lot near the mall. There is no public transportation and none of my coworkers live in my neighbourhood.
Given those facts, you should be receiving a significant amount more money than those whose workplaces are accessible by public transportation. If you didn’t ask for (or receive) more money to offset the inevitable car expenses, then you got screwed.
I live in NJ, a car IS a neccessity. “owning a car is more of a luxury than a necessity” if you live in a crowded urban area.
Yes and you chose to live in a land where a car is a requirement. Again, your long-term pay should offset this increased requirement.
My wife and I live in Kansas City on $75k / year (no kids). I’m 28 and have never owned a car, instead we rent one every month or two to cover the necessities. We walk 15 miles or so every week to run errands (and to spend time together). We don’t own a home, we rent a two bedroom apartment close to work. My apartment is specifically close to many other apartments which are all walking distance to major amenities: Grocery, Mail, Bank, Pharmacy, Hospital, Park etc.
I have lived without a car in 3 different large North American cities in the last 6 years. Including a very cold Canadian city where -40 is the norm for 4 weeks / year. I have turned down job options where the pay increase didn’t justify the requirement that I own a car.
Living without a car in a place you’re renting is not fiction. It is the reality for most of the world outside of North America. Thank you Mint for reminding us.
I am inspired to ditch my auto lease and start hitchhiking. My mother will be thrilled!
Gates VP, I understand what you’re saying, but it seems you and I see things from very different perspectives.
To me, luxury doesn’t mean low production numbers vs. number of people, it means extremely small production numbers period. As an example, Ferrari’s production is around 5000 units per year. What’s that as a percentage of the world’s population? That’s what I’d call a luxury. I don’t feel that something 90% of people can’t afford is a luxury; it’s going to have to be a lot more exclusive than that.
Mercedes’ AMG division pumps out a little more than 20,000 cars a year, and I even question their exclusivity sometimes.
Yes what a grand time, sell my car and wear used clothes. And I will move to a commune where we will battle over who gets the work for picking peaches at ten cents each. What a grand time!!!!
John Harker, while a lot of people will be forced into positions similar to what you described, society is still spending money. If you position yourself carefully, you’ll do well. Some businesses out there are actually thriving in this environment more than ever before.
This is a great article! It is great to be reminded of how much we really do have, even if we are short on cash. Also, for those who have a hard time spending cash instead of credit, at least make sure that your credit card interest rate is low so that you don’t spend a cent more than you have to. Here’s an article to help you lower your interest rates: http://www.brighthub.com/money/personal-finance/articles/17952.aspx
Basically, the lower payments you can achieve on your credit card, the more practical it is to use them.
This has a lot of good well-intentioned information, as well as great comments. One thing that is missing in current society (but present in other places in the world) is an emphasis on reuse.
Having lived through the Depression made everyone conscious of what resources could be used in the future to defer costs.
I believe that a general focus on reuse across the board could lead to some creative ways to save money. It’s a shame that we can’t typically impart the same level of discipline. I guess it is human nature that that degree of discipline must be imposed from outside forces or events, etc.
Very good points, but for many of us, a car is a necessity. I live in an area where our mass transit is laughable and doesn’t go where you need it to, when you need it to.
They key to vehicle ownership is not to buy more then you can afford or need. A car is a poor financial investment, period. Deal with it the best you can.
As for GatesVP, the comparison to China and India isn’t apples to apples. Sure, they have more people and more land compared to us, but they also are not fully developed countries. Let’s see those figures in 10 years.
Coupons were left out of this blog and someone else mentioned, they are a great way to save money (without resorting to Wal-mart) If we use a lot of coupons and the store doubles some of them, we’ve saved $20 on our grocery bill before, sometimes more.
Very good post, thanks!
Illusions
A dangerous illusion, American life can continue in its archaic 18th Century style, using solar and wind power, is dead wrong! Houses will be smaller, family of two-sized, super-insulated, LED lighted, passive solar heating oriented, use ground heat storage, use totally solar refrigeration in smaller, better, specifically designed units, stoves will incorporate microwave means of cooking and operate on low solar power, diets will change, less meat, more aquacultured fish, more “GMO’ed to grow fast and bug free veggies” from backyards, water efficiency built in, greenhouses built in, gardens attached, composting even humanure mandatory, We may see whole neighborhoods of homes like these, sharing communal breweries, wineries, mechanical shops,small local wind farm installations, water supplies from deep wells, power from solar collector arrays, and schools run by local governments. Interconnecting, not by highways, but by steel wheeled trains for economy sake! and battery scooters commonplace! We are going off of oil, but a lot of other changes will occur as a result of a severe government imposed carbon tax! We are entering a new green age, ruled by scientists, not market greed! The large American pot-belly and big fat ass will disappear as we move to a more sustainable, pig and cow grease- free diet. The (GRD) great republican depression and its stringent money supply will be the enforcer of a new way of life for all North Americans! As the GRD blackens our skies and spreads slowly through our society, unemployment, food shortages, housing shortages, and lack of transportation by automobile will earmark the changes to come! The American Dream will be so altered as to no longer be a dream but a psychological and sociological paradigm shift that even a direct nuclear hit could cause! We are so far out of touch with reality that even a shoe in our President’s face doesn’t arouse us! The GRD will grab us by our very existence, change the food we put in our mouths, take our oil and oil driven chariots from us and put us foreclosed out into the streets to meet anarchy and a new reality. Humbled, we will accept any changes necessary to live a sustainable life thereafter, or perish at the oil pumps, with empty-tanked Corvettes, pregnant girlfriends, GED-free and no food in our stomachs. Last Call America! Last Call.
Uncle B, that was a very crazy post. Worse than that, you haven’t linked to a website or blog of your own where I can read about your credentials to determine whether or not I should take you seriously. You sound like an activist; most activists have websites.
We are not going off oil. There is no alternative to oil. Airplanes and ships literally CANNOT run off of anything other than oil (the rare exception being a nuclear powered ship).
Oil is not going away. Greed is not going away. Automobiles and highways are not going anywhere either.
A very good article and for the most part, posts. Though I don’t see the country looking like the pictures, but the advice to help out is very good. Too bad this advice is not taught in schools so the past generations don’t get hooked on credit and use cash for most transactions. My parents did well without Credit Cards and pinched their pennies.
Jon Kepler made a good point about oil. There is no way this country can go completely off oil, too many things depend on it: generation of electricity, steel plants, long hauling trucks, planes and ships. We can probably create our own using solar cells, the wind and such but not for lighting up a city like New York, Chicago, LA or Detroit. The Government should do only what it is authorized to do in the Constitution and no more. The Constitution is not a living document and is not open to interpretation, it say what it means and means what it says. If you are unsure what the Federal Government can do, read Article 1, Section 8 and you will then know. Sorry, but the Federal Government got us into this mess, and it is up to us to get us out. What ever the Federal Government does, it does for its own purposes and not for our benefit.
Remember to live with in your means and if you find something you want, ask yourself ‘do I want it now or can I wait and pay cash for it?’
RE: the old adage “If you can’t afford to pay cash, you can’t afford it.”
While this is great advice for determining IF and WHEN you can afford something, there are many people who take that to mean do not USE a credit account to buy something IF you have cash. This is a foolish application of that wisdom.
The wiser choice is to use credit accounts to your advantage, while minimizing the risk of getting into trouble. Do not buy something unless you can afford to pay it, but use the credit accounts to give you extended warranties, easier return policies and negotiating strength, expense tracking and trends, cash back bonuses, etc.
The generations of yesteryear had much better values to nearly everything, hard work was the only way for most of them to acheive anything
It is amazing how much you can save if you just take a little time to study where your money is going. When I was laid off late last year I had an adequate savings to survive several years without employment if I needed to but I was still focused on cutting useless expenses. I called up all my utility/service providers and negotiated lower rates or just completely cancelled extra things. I was able to cut my cable/internet/home phone bill in half by switching providers and retaining the same exact service just because they were willing to compete for my business. I cut my cell phone bill substantially just by calling and threating to leave unless they could offer me a better deal. Same with my gym membership. Use coupons! I know it is hard for us guys to use them especially when you have a decent amount of money and you feel weird using coupons for such small things but it adds up and it really is just money you are otherwise throwing away. Use them only on things you would buy anyway of course or things that are a great deal with the coupon and that you’d like to use. Take advantage of double or triple coupon days and sale items in the grocery store and I fill up my trunk with groceries for about what I pay to fill up my car with gas. The biggest thing is cutting your housing expense. I am not married nor have any kids yet so it is easier for me than it is for people with families but if you can even move to a place that is a few hundred less per month you save thousands each year. I live in a fine place but it is not in the hippest part of the city but it is very safe and nice with a lot of things nearby and my rental payment is actually a fairly small expense for me each month. For most people this isn’t the case, their housing expense is a major expense each month. I try not to have any expense that is major except for my own expense which is saving my money. I have since found another job since being laid off and I am saving even more than I did before which is over half my salary each month.